Bulletins News | September 3, 2020

Shifting Sands – STEP Journal

In January 2020, 300 advisors from around the globe gathered for the third annual STEP Cayman International Wealth Structuring Forum (the Conference). We were honoured to hold the opening panel session entitled ‘The Shifting Sands of Planning’, in which we highlighted a significant shift in the nature of wealth planning.

As advisors, we have always given our clients expert technical advice on how to transfer their wealth through tax-efficient and reporting-compliant structures. However, our clients are now asking us to help them preserve their legacy. They are asking us to think creatively about their structures and to provide them with nontechnical, practical steps they can take to meet their aims and expectations for future generations.

At the time, we never could have predicted how critical this advice would become, as our clients would soon be stress-testing their structures and their resilience as a global pandemic spread across the world. COVID-19 has proven to be a catalyst for unexpected and revolutionary change.

Before exploring the full impact of the pandemic, it is worth reminding ourselves of the context within which we, as advisors, find ourselves. We are presently witnessing the largest wealth transfer in history, with an estimated USD68 trillion expected to change hands over the next 25 years. Millennials are poised to become the wealthiest generation in history. As advisors, we are working with our clients to create structures that will assist them in the transfer of both the wealth and the legacy. This, however, is easier said than done. Many of us are familiar with the old adage ‘shirtsleeves to shirtsleeves in three generations’, which implies that the first generation earns the wealth, the second spends it, and the third is left to earn their wealth again. This is often not due to flawed structuring or an investment portfolio missing its benchmark: these failures are often caused by a lack of trust, transparency and preparedness on the part of the receiving generations.

At the Conference, we challenged delegates to help clients embrace generational perspectives, be accepting of various technologically advanced communication modes and be considerate of varying work styles in an effort to build trust and understanding among our multigenerational client base. Just a few months later, COVID-19 has caused us to re-examine our premises, with startling results. Our finding is that this global pandemic has unexpectedly and abruptly narrowed the gap between generational tendencies, allowing for more empathy, smoother communications and more tolerant approaches to planning. The shifting sands have given way to a sandstorm of change.

Mind the Generational Gap

Differences in generational perspectives are not new, but we seem to have reached an overwhelming and global divide today. This divide was succinctly summed up in two words from Chlöe Swarbrick, a member of the New Zealand Parliament, in late. Responding to heckling from her older colleague, Todd Muller, she replied: ‘Okay, boomer’. This phrase quickly spread across the globe, becoming representative of the fragmented relationship between the generations. This dismissive phrase mocks the stereotypical attitude of the baby boomer generation. In her own words, her comment was ‘symbolic of the collective exhaustion of multiple generations’. This generational divide can cause a breakdown in communication between generations and create a major hurdle for any successful wealth transfer. In the west, we see millennials as the ‘next gen’, but in other cultures, particularly in the Middle East or Asia, where the patriarch/matriarch retains power well into their 80s, the next gen can mean children in their 50s and 60s. Expectations arising from custom and practice in these regions is giving way to westernised ideas and aspirations that are often at odds. This creates a challenge in safeguarding the future of family wealth, which is often concentrated in local family businesses. While COVID-19 has distanced many of us physically, there has been a swell of humanity and innovation across the world that has proved to be a uniting force. Philanthropy and the desire to exhibit a social conscience are at an all-time high. Some families have physically relocated to brave the pandemic together, reuniting within the same household for the first time in many years. Whether families have been physically united or not, as advisors we play a key role in bridging the generational gap. We can leverage this newfound empathy, focus on similarities and help our clients see past generational stereotypes to assist with bridging this gap.

This is an opportunity to embrace the key attributes that each generation can bring to the equation; fresh ideas and perspectives spark the very innovation so needed in today’s climate. Indeed, millennials, through the instigation of boomers, we hasten to add, are often highly educated, tech -savvy and internationally mobile individuals who inhabit a global community that knows no bounds. These attributes may be just the skills required to help resolve our global crisis.

Changing the way we communicate

The way we communicate has changed drastically in recent years, with the advent of smartphones and multiple communication platforms, which can complicate any relationship. COVID-19 has accelerated this phenomenon, with shelter- in-place orders around the world closing borders literally overnight. Stranded family members are reliant on technology for communication with their loved ones. Patriarchs/matriarchs who may have had a preference for in-person discussions a few months ago may be finding ways to leverage technology to keep connected with family. This wider range of options can be instrumental in allowing for meaningful family dialogue, across multiple channels and with family members in multiple locations, that would have been previously reserved for in-person meetings. However, as advisors, it is still important to carefully consider the appropriate communication channel. To be relatable, we need to consider both the way in which the message is communicated and the means with which we deliver it. For example, there is huge value in instant messaging, as situations can be addressed quickly and efficiently. Formal advice, however, should still be given via email or a good old-fashioned letter. Communication, both the form and substance, is critical to avoid confusion or the risk of misinterpretation that can lead to unnecessary division. A silver lining of COVID-19 may be that a wider range of generations are adapting to technologically advanced communication modes, narrowing this divide and opening up a wider range of acceptable channels. This has undoubtedly encouraged cross-generation dialogue and strengthened communication patterns.

Changing the way we work

COVID-19 has disrupted our social and work construct. In January 2020, we discussed the generational divide over the negative connotations of flexible work schedules. At the time of writing, a massive percentage of our global workforce is working from home. A few months ago, the next gen might have been criticised for not subscribing to the ‘nine-to-five’ working day. Today, this flexibility has kept the global economy afloat. The next-gen partner group in the legal sector has led the way by servicing clients with great agility. This agility is now critical to providing uninterrupted advice to our clients during the pandemic. The fact that we have been able to efficiently and effectively advise our clients from our home offices is a shift that is likely to leave a lasting imprint on our global workforce long after this pandemic is resolved.


Generational differences, communication and work styles can complicate how a family works together. In addition to offering our technical expertise, helping families find common ground is incredibly important in achieving a successful multigenerational wealth transfer. It is becoming increasingly important for advisors to go beyond technical structuring to help families navigate the generational divide, overcome communication issues and embrace various work styles to create transparency, build trust and prepare the next generation.

While the tragic toll on humanity continues to mount, the global pandemic has unwittingly created more empathy between generations, narrowed the technological gap and embedded a flexible workstyle into our society overnight. By embracing the sandstorm of changes induced by COVID-19, we can add more value to our technical advice, helping families build resilient structures that will pass down both their wealth and their legacy.

Amy Szostak, Matt Braithwaite and James Long, ‘Shifting sands’, STEP Journal (Vol28 Iss4), pp.57-59