Swiss bank UBS released its latest Investor Watch report this week – a survey of 4,500 investors in 14 markets with at least $1 million in investable assets.

A report by UBS reveals that Western European and UAE investors find it more dificult to transfer their assets fairly compared with their Swiss counterparts. 

According to the report, around three-quarters of investors in Western Europe and 80 per cent of investors in the UK and France find it challenging to divide assets fairly, compared with the global average of 66 per cent.

In contrast, only 53 per cent of Swiss investors surveyed struggle to divide assets fairly, the report shows. 

The report comes at a time when trillions of dollars and the equivalent are due to change hands in the next few years as the Baby Boom generation passes on. How liquid and illiquid assets - including businesses - are transferred is regularly cited by wealth advisors as one of the most important challenges today. Managers know they must deliver a compelling value proposition to the rising generation of wealth holders, or run the risk of losing business. 

Swiss investors face fewer barriers to communication. Seventy-two per cent say they speak openly about financial matters in the family with only 15 per cent stating they’re not sure how to broach the topic, the report adds. 

Only 15 per cent of heirs in Switzerland faced conflicts with other heirs and 22 per cent said they had unresolved issues. Twenty five per cent wish they had discussed inheritance plans with their benefactors before they passed, the report says.

Investors in the United Arab Emirates, meanwhile, have open conversations with their heirs about important financial information and heirs are aware of how much wealth they have (57 per cent) and how their wealth will be divided (61 per cent), the report states. 

However, a greater proportion of investors in the United Arab Emirates (91 per cent) struggle to divide assets fairly and consider many factors when deciding how to divide their wealth among heirs, the report adds.

Global investors
It also found that around 40 per cent of investors globally have not formalised an inheritance plan, due to the complexity of dividing their inheritance fairly. Fifty per cent of investors surveyed have not shared where assets are held, how they intend to divide them, or how much they are worth.

Navigating a wealth transfer can be a complicated and emotional issue. Two-thirds of investors struggle with how to share their wealth in a way they consider fair, particularly if it means dividing assets unequally among heirs, the report says.

Investors who choose to favour some of their heirs over others are clear about why, with 80 per cent giving more to heirs they have closer relationships with, the report adds. Others cite what their heirs’ financial needs are and how much responsibility they have for taking care of their benefactor as they age.

“While investors overwhelmingly want the inheritance process to go smoothly, inadequate inheritance planning can be costly and could lead to unresolved family conflict,” said Iqbal Khan, president of global wealth management and president of Europe, Middle East, and Africa at UBS. 

“Every family has different values and should be supported by a team of professionals who can help them develop a personalised strategy to preserve what is most important to them,” he continued.

Different family dynamics also can complicate inheritance plans, the report states. Families that include stepchildren face even greater struggles dividing assets. Eighty-seven per cent of blended families struggle with dividing assets fairly, compared with 62 per cent of non-blended families. Investors without children are more likely to leave a higher proportion of their wealth to charitable causes, compared with investors with children, the report adds.

Business owners face additional complications when addressing wealth transfer – particularly since the business is often the most valuable asset and difficult to pass on, the report says. Six in 10 business owners struggle to divide assets fairly. Around half hope to leave their business to family, but many have no estate plan and have not discussed their intentions with heirs or set expectations about business transition plans, the report states.

UBS surveyed 4,500 investors with at least $1 million in investable assets, split across 14 markets: Argentina, Brazil, mainland China, France, Germany, Hong Kong, Italy, Japan, Mexico, Singapore, Switzerland, the UAE, the UK, and the US. The research was conducted in April 2022.