$340 000 is Lost for Every $1 000 000 in Family Wealth Transfers. Why?
Most wealthy families lose 34% of their fortune in family wealth transfers - for no good reason. Are you and your family following the same path as others, or not? Find out now.
Why Do Families Like Yours Lose Up to 34%?
Owner.One, an Assets Data Repository and Wealth Transfer service for families worth $3M-$99M in assets, surveyed 13 500 capital founders across 18 countries.
According to the research,referred to as Penguin Analytics, this category of wealth owners accounts for up to 75% of all losses that occur during the transfer of assets from capital founder to the family. On average, $340 000 per $1 000 000 is lost in the process.
A net worth of $3M to $99M often lasts just one generation. In 69% of cases, families experience a lifestyle decline after the transfer.
Three ways to lose 34% of your assets
There are three main reasons behind these potential losses. These are:
data gaps
information asymmetry
wrong timing
This article will analyze this trio of possible pitfalls. We will show you how to ring-fence your hard-fought family wealth.
What are gaps in wealth data?
Only the capital founders know the in-depth details of a family's wealth. This will include asset classes, jurisdictions, agreements, related business contacts, and other vital attributes.
A gap in wealth data arises when relevant parties are unaware of information related to the assets. This can stall, or completely halt, the transfer process. Typically, each asset requires up to 22 attributes to complete the task seamlessly.
For example, brokers can legally refuse to respond to a family’s inquiries if critical details, such as account and contract numbers, or the specifics of the signing entity are missing. This becomes challenging as some brokers manage between 30 to 250 licensed and sub-licensed entities.
What is information asymmetry?
Imagine your family wealth as an iceberg. Family members see only what’s above the surface - 90% of its true structure is hidden.
This mirrors the issue of information asymmetry when family members don’t know the real structure of a family’s wealth. Typically, they will have a 3-6 month window to claim assets in most countries. Without full attributes, the family could claim only the 'low-hanging fruit', if anything at all.
What is wrong timing in wealth data transfer?
Timing in wealth data transfer answers the question: Who needs to know what and when do they need to know it?
If a family receives it too early, they might be unprepared to handle it responsibly. On the other hand, delays lead to assets becoming inaccessible or lost. For instance, 22.7% of bank deposit box rentals, worldwide, are overdue. This means that access to them is restricted. Furthermore, 16% of luxury homes have unidentified owners.
How to fix your wealth data with Owner.One
Owner.One is tailored exclusively for wealth owners with net worth between $3 million and $99 million. Our service equips them to make wealth information transfer-ready. It enables algorithmic hands-free transfer of assets data from a capital founder to family members.
Wealth transfer self-acting algorithms will work automatically, never too early, never too late, but just-in-time. It will be triggered by life events, outlined by the owner and will reach the addressee.
Wealth owners receive a client-owned autonomous infrastructure for inventory, control and transfer of capital and assets data. No third parties are needed.
Here is how Owner.One can remedy data gaps, information asymmetry, and inopportune timing.
Store, manage, and transfer information on all your assets in one place with MyHub. It’s your client-owned vault for wealth data. MyHub ensures confidentiality and security. Even if you stop being an Owner.One client, you'll still retain access to MyHub.
Owner.One covers over 40 types of assets. It includes bank and brokerage accounts, real and commercial estate, legal entities, stocks, jewelry, and more. Each asset type comes with a specially designed template. Once filled out, these templates ensure that all necessary information is ready to pass on to family members.
You can specify what information each person receives. Then you can set up automatic data transfer processes to convey wealth data. Designated family members will receive the information automatically - not too early, not too late, but just-in-time. No intermediaries will be involved in the process.
Final Conclusions
We analyzed 240 apps and programs used by family offices, lawyers, and consultants within the wealth industry.
Half of them are marketing apps that are aimed at directing customers to offline upsells. The remaining are software applications that support family offices' client operations.
However, wealth owners do seek technology-driven setups for their assets and money. Fully 71% are open to using third-party digital services that operate autonomously without human intervention. This capability is as yet not offered by institutions marketing themselves as family wealth solution providers.
Owner.One covers that need. Consult our product and pricing pages to learn more.