One-Generation Wealth: What Will Your Family Lose In The Asset Transfer?

Asset transfer losses can soar to 91% in certain asset categories, as analyzed by Owner.One.

Many wealthy individuals are willing to lose a quarter, or even half of their wealth  if it means the rest will be securely transferred to their family.

The primary obstacle to a loss-free capital transfer is informational asymmetry. Only a scant 4.5% of capital founders recognize that their inaction transfers the responsibility of asset and capital transfer to their family and children, who are then left ill-equipped to address the challenge.

Walking Away with Nothing

An even smaller group considers the importance of a succession strategy and asset transfer plan – guidelines designed to guarantee the smooth passage of capital to the intended recipients. For such a plan to succeed, family members need to be aware of the asset locations and crucially, possess comprehensive details about them.

Consequently, fortunes between $1M to $99M often last just one generation, with the family’s lifestyle declining post-transfer in almost 70% of instances, often irreversibly.

The Unforeseen Problem with Digital and Crypto Assets

Cryptocurrency owners encounter significant challenges, with fewer than 13% aware that losing keys or wallets means rights to assets cannot be recovered. Meanwhile, 87% treat the storage of information on crypto assets and their access rights carelessly.

Consequently, 23.7% of all cryptocurrency assets in the market are without identified owners. Only 9.3% of survey respondents are aware of this issue. Furthermore, crypto payment services reveal that a mere 7% of clients show concern over the risk of disrupted ownership continuity before completing a transaction.

Outdated and Unreliable Data Storage Practices among Founders

Nearly 97.3% of asset founders rely on insecure methods to store and update their assets and capital data, highlighting a significant gap in digital security practices. Furthermore, 68% report extreme stress at the mere thought of how to securely store and transfer asset and capital information to family members.

Annually, founders lose up to one-sixth of their asset history data, which is often difficult or impossible to retrieve, a direct consequence of their outdated management approaches. In 81% of instances, owners themselves oversee record-keeping and storage, opting for methods that reflect their personal preferences for handling important documents:

• 24.8% use a box of documents stored in a cabinet.
• 24.3% rely on a spreadsheet or list on paper.
• 19.8% utilize cloud storage solutions.
• 18% store their records haphazardly, without a systematic approach.
• 5.3% delegate part of the task to hired professionals while keeping some records at home.
• 4.9% depend on their spouse for filing, often without knowing the specifics.
• 2.6% employ other various methods.

This data underscores the precarious position many founders find themselves in during the asset transfer process, largely due to their reliance on archaic data storage and management techniques.

The New Solution

High-net-worth individuals are actively seeking solutions to the complexities associated with asset transfer, with digitalization poised as the key answer. By leveraging advanced algorithms, this digital approach aims to eliminate the need for intermediaries and reduce the risks associated with human error.

This perspective aligns with the insights from Capgemini’s 2023 report, which forecasts a future where digital services, encapsulated in a Wealth-as-a-Service model, predominate.

This vision aligns with the features developed by Owner.One, which aims to create a comprehensive suite for wealthy families to address the aforementioned problems related to wealth transfer.