00:00We're talking about the great wealth transfer because it's a real thing. It's a real thing.
00:05We laugh, but it's a real thing and it's lots of money. Don Nordberg is head of integrated
00:09client solutions at Global Family Office at Citi Wealth. She joins us here in the Bloomberg
00:12Interactive Brokers Studio. It is a real thing. I mean, Cerule Associates projects
00:17$124 trillion in wealth will be transferred the next 22 years. What are you seeing right now at
00:23Citi? Well, first of all, thanks for having me. Really thrilled to be here. And it is a real
00:29thing. I think we are in the middle of a huge intergenerational transfer of wealth going to
00:35next gen, going to women. And I think particularly when we look at the transfer of wealth going to
00:39women, by 2030, we project that 55% of global wealth will be commanded by women. So that is
00:45an astonishing number. What is it today? I'm not quite sure what it is today. It's definitely below
00:5150%. I would argue it's probably much closer to 20%, maybe 30%. But we're seeing a big shift in terms
00:58of, you know, women being beneficiaries today of family office wealth, for example, to now becoming
01:04the principles of family offices. And so a part of that, it's interesting, when we look at women in
01:10wealth, we see really three groups of women at Citi Wealth. One is women who they themselves are
01:15founders, entrepreneurs. The second group is women who are C-suite executives or leaders in some form or
01:21fashion. And the third is really those who inherit their wealth. And with women who inherit their wealth,
01:26they also aren't just inheriting assets, financial assets, they're inheriting complexity. So at Citi
01:32Wealth, we make sure that we really try to put the client first and help them navigate that complexity
01:38by providing education, putting them at the center of that transition and empowering them.
01:43How many, how much of the women that you deal with, or how many of the women that you deal
01:47with
01:47are already aware of what's coming at them and kind of have a game plan already in place?
01:53I would say it differs. So at Citi Wealth, I should say that we have the pleasure of covering
01:57close to 2,000 family offices globally and more than 100 countries across the globe. So we're
02:03really at the epicenter of some really exciting conversations.
02:06What's the average family office?
02:07The average family office at Citi Wealth is about 2 billion in assets. I would say
02:12a global family office typically becomes a financial tool when somebody has about 200 million,
02:19250-ish million of assets to invest. And it's really just a unique investment tool.
02:23Well, because not everybody has experience with this part of investing. I'm just curious
02:29about the role of Citi Wealth within a family office. Because if you think about a family
02:33office, like you said, we hear 200 million and up, you can justify a family office and
02:38the costs associated with a family office. But then you outsource even some of the services
02:43to Citi. So it does create two separate layers of expenses in an entity that is supposed to
02:51be totally controlling of a family's wealth.
02:53Yeah. And it depends. There's a saying in the family office space, you meet one family
02:57office, you meet one family office. Because they're so different. So it really spans the
03:01gamut. You have very sophisticated, very large family offices that have teams of hundreds
03:05of people that are managing their investments. They're managing family governance. They're organizing
03:11family get-togethers. They're doing everything for the family. Outsource, bill pay, everything
03:15that you can imagine for a family. But some family offices are much smaller, much leaner.
03:21That's intentional. The family might be on the smaller end of the wealth spectrum. They
03:24might just be starting out. And they're doing, you know, they're outsourcing, to your point,
03:28a lot of what they do. So with Citi Wealth, we can really meet the family office where they
03:32are on that journey. For some of our families, what we provide is family office advisory, things
03:37like art advisory, philanthropy, kind of more of the softer things, things around family
03:41governance, mission statement. How do you have continuity across generations when you've
03:45got intergenerational wealth? Of course, we also provide best-in-class financial advice,
03:50financial products, right? And in particular, direct investing is an area where our families
03:55are very active. Seventy percent of our families do direct investing, with 40 percent looking
04:00to increase that allocation at that asset class. So that's somewhere where we look to also really
04:04provide value.
04:05Joan, one of the things that I'm curious about is the wealth transfer, especially either to
04:09women or to a younger generation. Is it about preservation, capital preservation, appreciation,
04:15or is it about making an impact?
04:16I think, you know what, Carol? Frankly, it's all of those things. Of course, a family office,
04:20first and foremost, is a tool to preserve and grow financial capital. But at the end of the day,
04:25a family office is also a multifaceted platform to really also grow human capital. So some of the
04:32things that we do is we spend a lot of time, which I mentioned, working with families on next-gen.
04:36What is that next-gen transition going to look like? What is the family mission statement?
04:40All that dovetails into making sure that the family has cohesion around purpose,
04:45legacy, mission. And that then dovetails into investment, philanthropy, goals-based investing,
04:51right? And of course, next-gen education.
04:54What about performance? Like, where does that fall into how a family office thinks about
05:00the entire family office? I mean, are they using benchmarks like a traditional investor would,
05:07beating an index sort of thing? Or is it much more about impact? Again, I know you meet one
05:13family office, you meet one family office. Yeah, exactly. I would say, of course, financial
05:17returns, right? The number one goal of a family office is to preserve that family's wealth. You
05:21have to also remember that a lot of the family office wealth is tied up often in an operating
05:25company that they still own or have divested. So there's a lot of effort to diversify away in
05:31terms of financial investment. Do a lot of times they want to do that liquidity event and say,
05:33sell it. Let's do stuff with the money, right? For sure. Yeah. For sure. But I also know of some
05:38family offices that somebody's a co-founder of a huge publicly traded company. They have billions
05:45of dollars. They've never sold a share of that public company. And instead, they've built all
05:51their wealth on margin. Yeah. That's a good point. That's remarkable. It's a good point. Or dividends
05:55that are coming in. It's a good point. But I think you're right. That catalyst, when there is that
05:59wealth creation event of either selling a company or a piece of the company is often
06:04an entry point to then say, how do we want to diversify? Do we want to use some of those
06:08assets for more intentional philanthropy, goals-based investing? Do we want to hedge against maybe
06:14the industry that our core business is in by getting involved in direct investing? A lot
06:19of our families also act in many ways like mini VCs. They love to invest particularly in
06:24the industry that they know, that they grew their wealth in, their family business. And
06:28they like to seed other companies, right? And use their knowledge to help those companies
06:33grow and thrive. So that's a big trend as well. And I can imagine it gets fun, complicated,
06:38difficult when there's multiple family members in that generation and passing a generation of
06:42wealth. I can only imagine. Yes. Yes. Money and families. Always entertaining. Never easy. Never easy.
06:46You can't keep it easy.
06:46Okay.
06:46And I'll give you a question like, okay, really.
06:47So, when you want it, come to get in an industry in America
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