$18.3trn to be transferred by 2030
A new Wealth-X report outlines the predicted extent of the impending wealth transfer…
For a number of years now the superyacht industry has talked about an imminent transfer of wealth to the next generation of potential charter guests and superyacht buyers and how this might impact the superyacht industry moving forward. A new Wealth-X report, Preservation and succession: Family Wealth Transfer 2021, predicts the amount of wealth transfer from those worth $5m and above that we can expect in the lead up to 2030 and raises a number of questions about the challenges of the process itself and its potential impacts.
“We expect $18.3trn of collective wealth will be transferred by those with $5m or more in net worth by 2030,” reads the report. “This sum is greater than China’s annual GDP and more than seven times the market capitalisation of US technology giant Microsoft. This wealth transfer will be carried out by almost 680,000 individuals across the world, averaging $27m per individual. UHNW individuals with a net worth of more than $100m will account for almost half of the $18.3trn to be transferred.”
This astronomical transfer of wealth poses both a number of opportunities and a number of challenges for the superyacht market. On the one hand, it may be that the pool of potential clients, both within the charter market and the two core buyer sectors, grows exponentially. On the other hand, it may be that the wealth is transferring to a generation of individuals that are, firstly, less engaged with the superyacht market and that, secondly, have entirely different priorities to their forebears.
The easiest thing to do at this juncture would be to point out that younger generations, generally speaking, are more concerned about sustainable initiatives than their parents, grandparents or whoever else they stand to inherit significant sums of money from and, as such, if superyachts are able to become more sustainable, they will be well placed attract more of these buyers across the various sectors. This, however, would be a gross oversimplification of the challenges that will be facing the superyacht industry.
It would be equally counter-productive to produce a list of the various reasons why younger individuals would be more or less interested in engaging with the superyacht market than previous generations. Quite simply, we do not have sufficient research to understand which way the dice will fall.
Not all demographics will react in the same way to their newfound wealth. Some may be bored of yachting having used daddy’s yacht or chartered far too many times on loathsome and forced family holidays, some may decide that superyachts are unsustainable and at odds with their philanthropy, scientific interests or public images, some individuals from emerging economies may find a superyacht incredibly aspirational, some may choose to sell an inherited superyacht to avoid working for another 1000 years, and some may prefer to go to space for their kicks. Who knows?
What is for certain is that the superyacht industry will be faced with both opportunities and challenges wherever this wealth transfer is concerned. The wealth transfer is coming, the industry best be ready.
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