Why Next Gens Ideology Must Be Embraced, Not Suppressed

Ahead of the looming, great generational wealth transfer, much attention is being given to the “next generation:” who they are, what they think, how they behave, and whether they should be trusted with the reported US$80 trillion set to be transferred over the next 20 years.  

First, let’s be clear about who the next generation is/are – amid an overlap of definitions. Beneficiaries of the great transfer will be members of Generation X – the next step down from baby boomers; millennials - defined as being born between 1981 and 1996; and Gen-Zs (Generation Z) – born between 1997 and 2012. For the purpose of this discussion, we are grouping this broad spectrum as the “Next Gens.” 

But before we explore what Next Gens think, what do others think of them? In traditional wealth management spheres, there is not a clear consensus. While many large institutions have publicly commented that Next Gens are smart, and are implementing strategies that are working well; other traditional voices can be less complimentary. For some, Next Gens are more laissez-faire and profligate – with protection required to stop them frittering away hard-earned family wealth.  

The latter view frustrates me, and it can be classed as an irresponsible marketing ploy, merely to scare concerned family elders into diverting assets away from heirs apparent. The glass half-empty approach holds back society; Next Gens have some of the most innovative and exciting ideas capable of changing tomorrow’s world for the better. They have fresh strategies and perspectives to take a different route to the same outcome – adding value and preserving family wealth. 

No one generation does things exactly like the previous one, especially in business. In a world increasingly shaped by paradigm-shifting technologies, we should expect and embrace new thinking, rather than treat it with inherent suspicion.  

Through history, new technology – for example – has built the railroads, the passenger jet, facilitated oil production, created the refrigerator, the television, and the modern computer. Socio-economically, each has materially impacted the world – with previous technologies rapidly appearing dinosaur-like. The drivers of each were the Next Gens of their day.  

Baby boomers grew up amid television expansion, changing lifestyles, and their connection to the world. Gen X grew up as the computer revolution took hold, while millennials came of age during the internet boom. For most Next Gens, these technologies have all been in their lives throughout.

The iPhone is a generation (17 years) old. Mobile devices, Wi-Fi, and increased bandwidth are now commonplace. Social media and connectivity are now assumed across the world – revolutionizing politics and sectors such as media, and retail. The consequences and opportunities of growing up in an “always on” technological environment – for better or worse – are already upon us.  

Why should everything be done the way it was before? Household disruptive names such as Amazon, Airbnb, and Netflix – with current combined market values in the trillions – each reached unicorn status rapidly post-founding. Under three years for Amazon and Airbnb, and just over four years for Netflix. The world changes rapidly!  

So, back to Next Gens. Of course, their outlooks are different from baby boomer parents or silent generation grandparents. Being different does not mean Next Gens do not or will not care. It is cynical and inaccurate to suggest any Next Gen leader would want to see their family’s achievements and the accompanying wealth, turn to dust.  

Next Gens are very prepared to tackle the three-generation curse of “shirtsleeves to shirtsleeves.” At my enterprise, Karman Beyond, we see this every day with Next Gens’ exciting ideas, new thinking, their embrace of cutting-edge technologies, and open minds to alternative investments and sustainability (environmental and financial!). To be clear, they aren’t wanting to rip up strategies that clearly still work well, but rather adapt the strategies that don’t work in today’s world – to the present and the future. So, why is there a reluctance to put more faith in this next incarnation of young, talented leaders?  

The most important difference I have observed when working with families and their Next Gen members is the mindset change. The generation that created the wealth – and once were more risk-averse – now have a “let’s hold on to what we’ve got” mindset, perhaps at odds with their younger selves. They have worked hard, invested capital, and are afraid to lose it. That’s fine – but the rules for growth and profit haven’t changed. 

Those born into wealth – the emerging Next Gens – have a “to win” mindset, which is reflected in their investment preferences as well as risk appetite for new technologies and emerging sectors. There is nothing wrong with either view, but there should not be prejudice against the latter.  

While Next Gens tend to seek more diversity, they are equally passionate about creating their own value, rather than simply maintaining what is already there. They should be trusted to explore their creativity and to be inspired by new possibilities. In the sixties, man went to the moon for the first time. Now, we have private space rockets taking off, then returning to land upright – and planning to take humans to Mars. Next Gens want to save the planet and discover new ones. The same pioneering spirit, just different modern goals.  

This “beyond the horizon” attitude drives how Next Gens select advisors. Unsurprisingly, they seek teams who understand their preferences and speak their language. They want to work and consult with creative teams who think beyond predictable limits, and disregard boundaries in business ideas, investments, and potential returns.   

Next Gens' ideology is an advantage to embrace, not suppress. But we should be honest with ourselves too. Next Gens are not always the finished articles. Their development is a journey and supportive education is required – which includes succession planning – that is key to preserving wealth and putting families on the road to success.   

The imminent great wealth transfer is one of the most pivotal moments for the world. It is a gradual passing of the torch from the wealthiest generation in history to the next. It has the potential to transform and benefit us all, if we remember that the old and traditional was – once upon a time – also the “new.”  

Different thinking is inevitable, but positive. Let’s embrace it.

About The Author 

Özge Doğan is the founder and CEO of Karman Beyond, Turkey's first, independent multi-family office that is simplifying wealth management for families.