About 1.2 million people, each worth over $5 million, are set to pass on nearly $31 trillion in the next decade to their families. However, 7 out of 10 intra-family wealth transfers fail. What steps can wealth owners take to prevent this? How can Owner.One support them along the way?
What is Owner.One?
Owner.One is tailored for wealth owners with net worth between $3 million and $100 million. It’s a digital platform for their family wealth information.
Firstly, Owner.One provides capital founders with a client-owned hub for wealth data. Contrary to most financial and non-financial services, customers fully own it.
Secondly, it equips clients with just-in-time algorithms. They automatically transfer assets and capital information to families and other individuals.
What Are Owner.One’s Core Features?
More than 70% of capital founders are open to using third-party wealth digital services that operate autonomously without human intervention. This capability is as yet not offered by institutions positioning themselves as family wealth solution providers.
Owner.One
- MyHub.Owner.One, have access to MyHub.
- Assets and attributes. Owner.One
Each asset type comes with a specially designed template. Once filled out, these templates ensure that all necessary information is ready to pass on to the family members.
3. Transfer Algorithms. Capital founders can specify what information each family member or other person receives. For this, they can set up transfer algorithms.
Designated family members will receive the information automatically - not too early, not too late, but just-in-time. No intermediaries will be involved in the process.
4. Security. Owner.One operates on a private blockchain. It ensures no third party can access customer data.
Owner.One’s delivers full transactional security. It does not store clients' passwords or other sensitive data. It also doesn’t have access to customers’ data. Blockchain setup guarantees that the data will be inaccessible to authorities, hosting providers, or any other third parties.
Why is it important to be the sole owner of the wealth Information?
An in-depth analysis of the 240 apps and programs used by family offices, lawyers, and consultants within the wealth industry, revealed the shortfall of digital services to support family wealth transfers.
Half of them are marketing apps that are aimed at directing customers to offline upsells. The remaining are software applications that support family offices' client operations.
Owner.One is focused on empowering the wealth transfer process for families. Its architecture is based on the idea of enabling capital owners to fully control every aspect of the wealth data transfer independently from third parties.
- Clients can cancel subscriptions at any time. To do this, one should simply disconnect MyHub from Owner.One. The client's access to MyHub and uploaded data will remain unchanged.
- MyHub is a client's property. Unlike other apps or cloud storage solutions, every wealth owner takes full ownership rights over MyHub and stored data from the start.
- Capital founders can invite family members to join Owner.One. There are no limits to the number of accounts that can be created for them.
- Wealth owners can Delegate data entry to assistants or trusted professionals. They will perform the task in a secure and restricted environment, with no ability to view any sensitive information.
Why Wealth Transfer Is a Critical Issue for Wealthy Families?
Estimates suggest that 1.2 million individuals with investable assets exceeding $5 million are poised to transfer a collective $31 trillion to their beneficiaries over the next decade.
This category is the most vulnerable to intra-family wealth transfers. They account for up to 75% of all losses that occur during the transfer of assets from the capital founder to the family.
How Much Do Families Lose Money In Wealth Transfers?
On average, $340,000 per $1,000,000 is lost in the process. In 69% of cases, families experience a lifestyle decline after the transfer.
How Does Information Asymmetry Affect It?
Imagine your family wealth as an iceberg. Family members see only what’s above the surface. 90% of its true structure is hidden. This mirrors the issue of information asymmetry when family members don’t know the real structure of a family’s wealth.
Typically they will have a 3-6 month window to claim assets in most countries. Without full attributes, family and loved ones could reach only the 'low-hanging fruits', if anything at all.
Understanding What Are 'Data Gaps in Wealth Information'
The absence of any such attribute can stall or completely halt the transfer process. On average, each asset requires up to 22 attributes to complete the task. In total, 31% of family wealth is lost during transfer due to gaps in data.
The Risks of Poor Record-Keeping
Annually, the capital founder loses up to 1/6 of their wealth information. Most of it is difficult or impossible to restore. Chances for the family are even slimmer.
Why Trusted Professionals Won't Do the Job for You and Your Family
Once the family wealth transfer begins, 31.7% of attorneys fail to execute the capital founder's initial instructions.
Moreover, the high costs associated with third-party services, which can reach up to $180,000 annually, further complicate matters.
Why Time Factor Is a Key to Success?
If a family receives it too early, they may be unprepared to handle it responsibly. Conversely, delays lead to assets becoming inaccessible or lost.
Setting the right time can prevent internal conflicts, loss of motivation, and difficulties in asserting rights to assets and capital.
Conclusion
For wealth owners, it’s a challenging task to ensure that a family's fortunes are distributed in a way that is considered relatively equitable and effective by all those involved while sustaining the family’s values. The data on wealth transfer outcomes heightens uncertainty for capital founders.
To succeed in the process, they ought to remedy chronic problems faced by the majority of families with $3M-$100M in assets:
- Data gaps in wealth data
- Information asymmetry between a wealth owner and family members
- The challenge to pass on wealth information at the right time
The Owner.One platform offers services to wealth owners aimed at maintaining data integrity, achieving information symmetry in family knowledge, and determining the optimal timing for information handover. For more details, please visit our product and pricing pages.
