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The largest generational wealth transfer in Australia’s history has already begun as $3.5 trillion of wealth transitions to the rising generation of family members over the next 20 years.
However, it's estimated that 70 per cent of families will lose inherited wealth by the second generation, and 90 per cent by the third, with only 1 in 20 families passing on more wealth than was inherited.
As the population ages, the stakes have never been higher to ensure future rising generations of Australian family businesses have the financial acumen and knowledge of asset protection, diversification of the family investments, and a thorough understanding of their family communications and family business group structure.
This National Family Business Day on 19 September it’s important to consider the many challenges the rising generation will face to maintain and hopefully build upon the wealth the current generation have worked so hard to grow.
Grant Thornton’s Family Business Consulting group understands the importance of educating the rising generation to give them the confidence in financial acumen training; facilitation of family conversations to guide them through even the most uncomfortable topics; and assistance with succession planning as well as estate planning and the asset protection process.
Kirsten Taylor-Martin, Partner and National Head of Family Business Consulting at Grant Thornton said: “Currently only 12 per cent of family businesses in Australia make it to the third generation with $3.5 trillion of wealth at risk; as a nation we need to change these statistics. National Family Business Day is a good time to start educating our rising generation and facilitating constructive family communication to ensure Australian family businesses and wealth continues to prosper and grow.
“With an ageing population, we are more frequently seeing the impacts of divorce, death, second marriages, step-children and blended families on family businesses, which makes the task of protecting and building family wealth more complicated. The key is communication and nurturing the rising generation from the early stages by inviting them to family council meetings and being open with the challenges and opportunities facing the family business. We’ve also found when the incumbent generation mentors the next, it can be incredibly beneficial across all aspects of the family business. Ultimately, it’s about giving the rising generation the confidence to make informed decisions to not only continue operations but grow revenue for generations to come.”
Grant Thornton’s accredited family business advisors are there to guide and facilitate meaningful conversations with family members, as well as advise on the right structures to ensure businesses can prosper for generations to come. It’s critical to invest in establishing strong succession structures so when it’s time to hand over the business to the rising generation, they are confident in continuing the prosperity, values and goals of the family business. The team will act as both confidants and key advisors around strategic direction, assuring succession for future generations to come.
Kirsten Taylor-Martin continued: “We want to ensure the rising generation has the skillset to grow the family’s wealth and continue to lead the family business for generations to come. The outcomes from our knowledge and guidance will build confidence in the rising generation so they can continue to build their family business, creating a family legacy that considers the long-term vision, ethical purpose, family values including its governance and structure.”
Press Release
Preparing the next generation for Australia’s largest wealth transition
19 Sep 2024
The largest generational wealth transfer in Australia’s history has already begun as $3.5 trillion of wealth transitions to the rising generation of family members over the next 20 years.
However, it's estimated that 70 per cent of families will lose inherited wealth by the second generation, and 90 per cent by the third, with only 1 in 20 families passing on more wealth than was inherited.
As the population ages, the stakes have never been higher to ensure future rising generations of Australian family businesses have the financial acumen and knowledge of asset protection, diversification of the family investments, and a thorough understanding of their family communications and family business group structure.
This National Family Business Day on 19 September it’s important to consider the many challenges the rising generation will face to maintain and hopefully build upon the wealth the current generation have worked so hard to grow.
Grant Thornton’s Family Business Consulting group understands the importance of educating the rising generation to give them the confidence in financial acumen training; facilitation of family conversations to guide them through even the most uncomfortable topics; and assistance with succession planning as well as estate planning and the asset protection process.
Kirsten Taylor-Martin, Partner and National Head of Family Business Consulting at Grant Thornton said: “Currently only 12 per cent of family businesses in Australia make it to the third generation with $3.5 trillion of wealth at risk; as a nation we need to change these statistics. National Family Business Day is a good time to start educating our rising generation and facilitating constructive family communication to ensure Australian family businesses and wealth continues to prosper and grow.
“With an ageing population, we are more frequently seeing the impacts of divorce, death, second marriages, step-children and blended families on family businesses, which makes the task of protecting and building family wealth more complicated. The key is communication and nurturing the rising generation from the early stages by inviting them to family council meetings and being open with the challenges and opportunities facing the family business. We’ve also found when the incumbent generation mentors the next, it can be incredibly beneficial across all aspects of the family business. Ultimately, it’s about giving the rising generation the confidence to make informed decisions to not only continue operations but grow revenue for generations to come.”
Grant Thornton’s accredited family business advisors are there to guide and facilitate meaningful conversations with family members, as well as advise on the right structures to ensure businesses can prosper for generations to come. It’s critical to invest in establishing strong succession structures so when it’s time to hand over the business to the rising generation, they are confident in continuing the prosperity, values and goals of the family business. The team will act as both confidants and key advisors around strategic direction, assuring succession for future generations to come.
Kirsten Taylor-Martin continued: “We want to ensure the rising generation has the skillset to grow the family’s wealth and continue to lead the family business for generations to come. The outcomes from our knowledge and guidance will build confidence in the rising generation so they can continue to build their family business, creating a family legacy that considers the long-term vision, ethical purpose, family values including its governance and structure.”
Experts / Authors
Mikala Spark
Senior Communications Manager at Grant Thornton Australia
