Australia’s AUD 5.4 trillion wealth transfer exposes succession gaps.
Australia is entering a significant period of intergenerational wealth transfer, with an estimated AUD 5.4 trillion expected to pass between households over the coming decades. The scale of this transfer carries implications not only for beneficiaries but also for the family offices and professional advisers supporting them.
For families, deciding who will receive wealth is only one part of succession planning. Effective succession also depends on having clear arrangements for how it will be managed once it changes hands. That raises two questions in particular: how decisions will be made once responsibility shifts, and whether advisory relationships built around one family member will hold across a generation.
Succession planning gaps
Many families discuss succession informally without establishing a clear framework for putting those intentions into practice. A succession plan may determine how ownership or assets are transferred, but it does not necessarily address how family members will make decisions, resolve disagreements or manage different expectations once the transfer has taken place.
Family constitutions and other governance frameworks can help address this gap. They can set out roles, responsibilities and decision-making processes, while providing a common reference point for family members across generations. This can be particularly useful where younger members are taking on responsibility for assets or businesses that they have not previously managed.
Advisory relationships tied to one family member
Succession can also affect the relationships between families and their professional advisers. Wealth typically passes to a surviving spouse before it eventually reaches the next generation, and the person who becomes responsible for the family’s wealth may not previously have been the primary client of the family’s advisers.
This creates a risk that long-standing professional relationships do not continue past a succession event. As family offices coordinate an increasingly broad range of professional services, advisers’ relationships with the wider family become increasingly important. Building relationships across generations can provide greater continuity as responsibility changes.
What this means for families and advisers
The scale of Australia’s wealth transfer means succession is no longer just a question of who receives the wealth, but how it is managed once responsibility changes hands.
Establishing governance and succession arrangements ahead of a transition can help families clarify responsibilities and decision-making processes before circumstances change. For advisers, this means maintaining relationships across generations rather than relying on a single point of contact within the family. As wealth moves between generations, the structures in place to manage it will matter as much as the transfer itself.
Families weighing how to structure a transition, and advisers looking to maintain continuity across generations, can benefit from planning early. Talk to an expert to work through the governance and succession arrangements that suit your circumstances.
