The Changing Face Of Wealth

In Asia, the massive impact of urbanization can be clearly seen, as the top three sectors are materials, consumer services and real estate. These sectors could change, however, as mass consumer markets arise across Asia.

Perhaps the single-most important issue for billionaires is what they will do with their wealth. Two-thirds of the billionaires we looked at are over 60. Ninety percent of them keep 30% to 60% of their businesses, and only 10% sell them off completely—a clear sign that family business and legacies go hand in hand.

We can also see clear regional differences in how intergenerational transfer will happen. Wealthy families in Asia and Europe are much more dynastic, with close to 60% of the next generation involved in the business, compared to less than a quarter in the U.S.  

The study indicated emotional enrichment is more important than financial enrichment for many families, with U.S. billionaires the leaders in giving a majority of their wealth away. Fifteen percent of U.S. billionaires have done this, compared to less than 3% in Europe and 1% in Asia.

Billionaires face two great challenges today, one personal and one external. First, they want to ensure their legacy reflects their personal goals through the effective use and transfer of their wealth. This has profound implications for how wealth managers create value for their clients.

Second, over the last decade, billionaire wealth has become closely correlated to financial market performance. If we are living in a time of inflated assets driven by central bank liquidity, any reversal would have significant impact on billionaire wealth.

 If these trends continue, billionaires will create great wealth earlier in their careers and more of them will be self-made. A higher proportion will be from Asia and other developing markets and a higher proportion will be women.

There will also be a massive transfer of wealth over the next two decades, and we will see the emergence of a new wave of successful multigenerational family businesses arising from today’s self-made billionaires.  Billionaires are here to stay, but as a group, they are changing.


John Mathews is head of private wealth management at UBS.