BNP Paribas Wealth Management “2021 Global Entrepreneur & Family Report”
A comprehensive assessment of the way the private and professional needs of Entrepreneurs and multi-generation Families and have changed in the pandemic era.
Based on the voices of nearly 1,000 Entrepreneurs and multi-generational families holding on average investable assets of more than $17 million and residing in 19 countries across Europe, Asia, the United States and the Middle East, this exclusive report gives a comprehensive view of the changing requirements of Entrepreneurs and multi-generation Families.
A STRONGER FOCUS ON IMPACT IN FAMILY OFFICES’ PURPOSE AND GOVERNANCE
- For 1/3 of Entrepreneurs, “investing to have a positive impact and financial returns” is the main purpose of their family office.
- Almost 40% of first-generation Entrepreneurs even identify positive impact as their first purpose.
- Multi-generation Families do not ignore the role of positive impact in their governance arrangements (28% of them cite positive impact as their primary focus), but they give the preservation of family wealth a much stronger emphasis (37%), especially in China (59%).
- This is the first time that “Having a positive impact and financial returns” equals “Managing family wealth” as Entrepreneurs’ main purpose since 2015 when BNP Paribas Wealth Management first started publishing this report.
SHIFTING PROFESSIONAL NEEDS TOWARDS CREDIT AND M&A ADVICE…
In this pandemic context, Entrepreneurs and Families have had to be more agile to stabilize their businesses. The impact of the crisis on their ventures has been profound and in many cases, it has highlighted an evolution in the advice and solutions they require.
- In a context of near-zero interest rates, Entrepreneurs see Credit as an important solution for both their business and portfolio performance.
- More than half (51%) say they would consider working with new providers to meet their credit needs. 55% of Millennipreneurs (35 years old and under) are open to working with new providers (vs 36% for Boomerpreneurs – over 55 years old).
- Across Europe, credit will be used to bolster business performance by 54% of entrepreneurs in France, 58% in Spain and 68% in Italy. In Germany, 61% are more willing to increase their exposure to credit than a year ago.
- M&A and co-investment
- Asked to identify services that are not available today but could benefit them in the future, more than 20% of Entrepreneurs and Families identify M&A advice and co-investment opportunities above all else.
… AND EVOLVING PERSONAL PLANS REGARDING WEALTH TRANSFER
- In the face of the pandemic, more than half of Entrepreneurs have changed their plans regarding wealth transmission:
- The size of wealth transfer: 32% intend to pass on more wealth to the next generation than planned before the pandemic – rising to 39% in the US.
- The timeframe of wealth transfer: Entrepreneurs in the Netherlands and the UK (46%) and in Switzerland (44%) are most interested in passing on wealth sooner; while those in Belgium (50%) and the US (40%) are more likely to delay it.
A STRONGER INFLUENCE OF THE NEXT GENERATION ON BUSINESS DECISION-MAKING AND MANAGING WEALTH
- Out of 100 Entrepreneurs, 34 have already involved their youngest family members in determining their company's strategic direction, and 42 wish to do so.
- The influence of children and grandchildren of founding partners is also meaningful within the personal sphere, with 37% stating that younger generations are now leading decisions on managing family wealth.
- Consequently, more than 40% of Entrepreneurs feel that the priority area where wealth managers could support them is developing the business management skills of younger family members.
Vincent Lecomte, CEO of BNP Paribas Wealth Management, commented: “In light of converging business pressures and prolonged economic uncertainty, Entrepreneurs and leading families want to drive a sustainable economic recovery, both through their personal investments and through their businesses. They are making decisions that are optimistic and forward-looking, with a stronger focus on positive impact and a common thread of combining their experience with the fresh capabilities and perspectives of the next generation in their families. To do so, they are expecting from their wealth manager personalized solutions to manage their wealth and prepare the next generation to carry on their work.”
Pierre Ramadier, Global Head of Entrepreneurs and Families, BNP Paribas Wealth Management, added: “We clearly see a growing influence on the next generation on wealth planning and strategic business decision-making. The role of the younger members of the leading families is no longer limited to behind-the-scenes planning and collaboration. They also take part in leading aspects of business transformation and are fast becoming key players in modernizing company operations, product lines and brand. 35% of them are also integrating sustainable practice into their businesses.”
BNP Paribas Wealth Management is a leading global private bank and the largest private bank in the Eurozone with €411 billion worth of assets under management as at September 2021. Present in three hubs in Europe, Asia and the United States, it employs over 6,800 professionals who support High-Net-Worth and Ultra-High-Net-Worth individuals in protecting, growing and passing on their assets. The bank aims at building a sustainable future by combining its deep expertise and reach with its clients’ influence and desire for impact. The bank was recently named Best Private Bank in Europe, in North Asia, in US West and in the Middle East.