Confidence for future wealth is high, but many say they need
more financial acumen
More than nine in 10 Generation Z and Millennial children of
millionaires say the most important thing they will inherit is
their parents’ values, not their wealth, according to a recent
survey by Wells Fargo Private Bank. More than four out of five (84
percent) say they want to sustain and build on their family’s
legacy.
“This is such important data for families to have and act on,”
said Katherine Dean, head of family dynamics for Wells Fargo
Private Bank. “We hear all the time what parents are talking to
their children about, but rarely do we hear from the children.
These are the generations responsible for carrying on the family
legacy, so it makes a big difference when families collaborate and
communicate their shared values.”
More than 84 percent of the children surveyed say their family’s
charitable giving aligns with their own values, and two out of
three (63 percent) report they are giving together as a family.
However, just one-third (34 percent) say they have a strong voice
in the family’s giving, and four out of 10 (40 percent) want more
of a say. Forty-four percent say they don’t see their family
following a specific giving strategy, and 21 percent don’t know if
a strategy exists.
“Families become more philanthropic through the generations, and
we often see charitable giving as a way to get people together,
talking more and getting on the same page,” said Beth Renner, head
of philanthropic services for Wells Fargo Private Bank. “The survey
shows us that this works: Two out three families now give together
as a family. But children want to take an even more active role in
how much their family gives, and to whom. These shared interests
can really bind a family together.”
The importance of communication
Although the survey shows agreement about families’ shared
values, in other areas there remains a disconnect. For example, 44
percent of those surveyed say they have a different focus on money
than their parents do. Nearly half (46 percent) say money can buy
happiness, and 62 percent say money is a good measure of
success.
Nearly 90 percent of the respondents say they are happy, but 60
percent feel family pressure to live up to their family’s standard
of wealth and success and 28 percent say their parents have
specific career expectations for them. Nearly one in three (31
percent) say parents use money to reward and punish them, 24
percent say they see favoritism with some of their siblings over
money, and 19 percent report conflict among siblings about
money.
“Communication is the foundation of any successful family that
has retained their wealth through the generations,” said Dean. “It
is so vital to talk to your children about money, and not just once
but regularly. This is a lesson we all can take to heart. Our
children learn from us — the good and the bad — and we can learn
from them, too.”
Other differences between generations: Children are generally
less focused on education (–18 percent in generational value
differential) and hard work (–13 percent), and more focused on the
importance of family (+11 percent), enjoying life (+30 percent),
making a difference in the world (+24 percent), and charitable
giving (+18 percent).
Values most
discussed
and most important
Parents talked
a lot about this
Among most
important personally
Significant
differences
The importance
of education
87% 69% –18% The value of hard work 81%
68% –13% The importance of saving 69%
66% The importance of family 66% 77%
+11% The value of earning money and being independent
63% 68% Being honest no matter what the cost
53% 46% Enjoying life to the fullest
here and now 37% 67% +30% Making the world
a better place
34% 58% +24% The value of competition and
striving to be the best 33% 28% The
importance of charity and giving to others 33% 51%
+18%
Young people surveyed are aware of their family’s wealth, but
more than 90 percent say they do not regularly meet to discuss
family finances, and just one in three report their family ever
having a formal meeting to discuss finances. Of those not regularly
meeting, six in 10 report such meetings would be valuable. Half of
respondents who have formally met say there are ground rules in
place for the meetings — like taking turns, listening to others,
and preserving confidentiality — and of those reporting no ground
rules, 54 percent say such rules would add value.
Dean says that most everyone has good intentions when it comes
to their family, but some people don’t know how to interact on
topics related to wealth. Family meetings, mission statements and
understanding children’s desires and concerns should be priorities,
she says: “Enterprising families take the time to ask probing
questions and develop protocols, processes and structures that
other families rarely stop to think about, let alone act on.”
Financial education
Even though a majority of respondents (65 percent) say they are
confident they can manage family wealth, the children of
millionaires give themselves mediocre grades (B– average) on their
overall financial literacy. They give themselves higher grades for
basic budgeting, saving and managing debt (B average), and lower
grades for more complicated financial matters like insurance, taxes
and investing (C average). The older the child surveyed, the better
the grades.
Financialliteracygrades
Age Gender Parents’
Assets ALL 16-17 18-21
22-26 Sons Daughters
$1M- $3M- $10M+
<$3M
<$10M
Overall financialliteracy
B- C+ B- B B B- B-
B- B+
How to budgetand trackincome
andspending
B B B B+ B B B
B B+
How to saveand how muchto save
B B B+ B B B B
B B+
How to managecredit and debt
B B- B B B B B
B B+
How to saveand prepare
forretirement
C+ C C+ B- B- C+
C+ B- B
How to protectassets
withinsurance
C C- C C C+ C- C
C B
How to manageand minimizetaxes
C D+ C- C C C- C-
C B-
How to invest inthe
stockmarket
C C- C C C+ D+ C-
C C+
Half (48 percent) report that their parents work with a
financial advisor or wealth management consultant, and 17 percent
are unsure. Twenty-two percent report having met with their
parents’ advisor, and only three percent say they meet with the
advisor regularly. Among those children who do not meet with an
advisor, 88 percent say having regular meetings with advisors would
be valuable for them. Children of millionaires are most interested
in learning more about basic financial literacy, and protecting
themselves and the family assets.
Topics of Interest for further learning
Interested Financial acumen
(budgeting, planning, etc.)
81%
Privacy and security
(social media, protecting online
information, etc.)
79%
Asset protection
(insurance, prenuptial agreements,
protectinginheritances, etc.)
73%
Giving back
(philanthropy, social impact investing,
etc.)
73%
Family and financial dynamics
(how to discuss financial values, legacy,
stewardship,etc.)
71%
Wealth transfer
(estate planning, wills, trusts, etc.)
67%
Business interests
(transfer of family businesses, starting a
newbusiness, etc.)
65%
“Children want to learn and be a positive part of the family
culture and its future,” said Dean. “It is so important to have a
shared purpose, and we often achieve this through philanthropy. Gen
Z and Millennials are generations of Americans who want to be
charitable and make a difference in the world. It is vital to
establish solid and open communication, create a shared purpose and
educate our children so that they are prepared for stewardship.
When this doesn’t happen, wealth can be lost in just three
generations.”
About the survey
On behalf of Wells Fargo Private Bank, Versta Research conducted
a national survey of 1,003 Gen Z (ages 16 to 21) and younger
Millennials (ages 22 to 26) whose parents had an estimated net
worth of at least $1 million. Sampling was stratified by age and
gender and then weighted to ensure a sample that reflects the full
U.S. population of children whose parents are millionaires. The
survey was conducted between July 16 and August 3, 2018. Assuming
no sample bias, the maximum margin of sampling error is ±3%.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified,
community-based financial services company with $1.9 trillion in
assets. Wells Fargo’s vision is to satisfy our customers’ financial
needs and help them succeed financially. Founded in 1852 and
headquartered in San Francisco, Wells Fargo provides banking,
investment and mortgage products and services, as well as consumer
and commercial finance, through 7,950 locations, 13,000 ATMs, the
internet (wellsfargo.com) and mobile banking, and has offices in 37
countries and territories to support customers who conduct business
in the global economy. With approximately 262,000 team members,
Wells Fargo serves one in three households in the United States.
Wells Fargo & Company was ranked No. 26 on Fortune’s 2018
rankings of America’s largest corporations. News, insights and
perspectives from Wells Fargo are also available at Wells Fargo
Stories.
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version on businesswire.com: https://www.businesswire.com/news/home/20190109005028/en/
Vince Scanlon,
336-430-9786vince.scanlon@wellsfargo.com@VinceScanlonWF
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