Gen transition: opportunity or renunciation?

The topic of generational transition has suddenly become topical, or fashionable depending on opinion. It is a fact, confirmed by numerous recent researches, that we are approaching a period in which - inevitably as much as painfully - the generation of the immediate post-World War II period will leave significant wealth to their heirs: for Italy we are talking about 2 trillion euros until 2030, in the U.S. about 84 trillion dollars in the next 20 years.

In 2023, millionaire inheritances exceeded the amount generated through entrepreneurship and general wealth creation: a total of $141 billion was accumulated by 84 self-made billionaires worldwide in 2023, while $151 billion was allocated to 53 heirs (source Ubs Billionaire Ambitions Report). In this scenario, it should not be overlooked that the next generation will have a new vision of business, investment, and philanthropy and is redirecting large private wealth to new opportunities arising from the times in which we live. To organize a smooth succession, founders and their families will therefore have to act differently, discovering common values and goals more than ever before, to find a way forward that satisfies all generations and allows the legacy to continue to be built.

And this is where the first difficulties come into play. "In our latitudes, unlike those in the north, there is reluctance to tackle the subject, partly out of superstition, partly because we don't want to stick our heads in it, and partly for a thousand other reasons, each seemingly valid and each really surmountable," comments Marzio Albonico, Head of Family Protection & Planning at Banca Generali, President Generfid SPA and Member of the Wealth Advisory Commission AIPB - Associazione Italiana Private Banking. Yet two years ago, at the Tokyo Olympics, the whole of Italy paused to admire the perfection of the men's 4 x 100 relay team that won Olympic gold by routing all opponents with perfect changes.

There, the comparison fits: that running change, that perfect passing of the baton between two athletes who lead their team to success, that seemingly trivial gesture is actually the critical success factor.

"Out of metaphor, we need to subvert the perception that the generational transition implies a renunciation, an end, an unconditional surrender. Far from it: it is an opportunity to play a decisive role in putting those who will come after us in the best possible conditions, just as Filippo Tortu was launched toward gold by Fausto Desalu who preceded him in the relay," Albonico continues.

In this context, the financial advisor enjoys an extraordinary vantage point on the dynamics of the client and his or her family, and can truly have a role as a reference advisor when he or she combines expertise on financial markets with the support that the bank's professional structures can give across the board on the client's assets, whether securities or real estate, related to the business world or investments linked to passions. "In this sense, it is important to be able to explain in simple words-without trivializing-complex concepts and to illustrate the possible choices taking into account the intertwining of all aspects: the client's wishes, the heirs' aspirations, the legal rules, the tax levy," he further illustrates.

Trying to overcome the obstacles therefore requires an organic approach on the part of the financial advisor, starting first of all with the ability to listen to the client, to tune in on an emotional level, to accompany him or her on a path that is often tiring but then gives the satisfaction of having reached the summit, from which to admire the view without thoughts.

However, all this is not enough if on the client's side there is not the will-and the courage-to rely on experienced and competent people who know how to find that common thread to make dreams and needs possible.