Africa’s wealthy are growing fast but the question remains, will the next generation be able to hang onto the family fortune? The next transfer of wealth from the current generation to the next is expected to be biggest transfer of wealth in history.
The Pershing Report stated that Generation Y investors will inherit more than US $41trillion in assets by 2052.
Already, the number of wealthy, those with a net worth of more than R 12 million (USD1million) has increased from 76 385 since 2004 to 168 815 people in 2015.
The number of ultra-wealthy Africans is predicted to grow to more than 88 000 by 2025.
Many believe that the new generation is more likely to spend money on consumer goods than be concerned with investment strategies. The answer to preserving and growing wealth will rest on educating the next generation of African’s with the skills to help them develop and manage wealth in the future.
To ensure this happens for their clients, Standard Bank Wealth and Investment launched their ‘Future Leaders Academy’ in 2014 for young people between the ages of 18 and 24. Since then, this initiative has been expanded to cover preteens (Junior Leaders Academy), teenagers, aged between 13 and 17 (Young Leaders Academy) and women, (Women’s Wealth Academy).
The importance of building a foundation for preserving and growing family wealth becomes obvious when statistics show that 70 per cent of these families will lose their wealth by the following generation and 90 per cent will lose it all by the third generation. Frightening figures highlight the need to pass down financial planning and wealth management skills.