Q: How do we tell the kids about our family wealth? A: First and possibly most important point: they already know. By the lifestyle you lead and the people you mix with, your children have already made assumptions about the family wealth. They will also have garnished information on this topic from friends and from public sources. That means in terms of controlling the conversation, you are already well behind, so be aware of what you can and…
As we enter the third year of this pandemic, it’s worth reflecting on the theme of resilience. By retaining their long-term view, family businesses have been able to not just weather the storm but also grow and thrive. Their resilience comes from other factors as well: the entrepreneurial spirit of innovating in times of crisis, and the emotional and social bonds that exist both within the family and within the wider family business group and…
For years, we’ve been writing and talking about this trillion dollar wealth transition that is “going to happen in the next ten years”, ostensibly as baby boomers retire. But has it happened? The fact that we’re still talking about it as “happening” says plenty. We need to ask: why were the predictions of so many people incorrect? and more importantly, what (if anything) should we be doing differently about it? I’ve written previously about the…
One of the great challenges of family wealth is raising children. And one of the best articles I’ve read on the topic (and I read a lot of articles) is the first link below, and I urge anyone for whom this is an issue to read it in full. It’s very important to be aware of the unintended consequences of our beliefs about wealth and the messaging we convey to our children about them. How…
When there is more than enough wealth for the family itself, families often turn to philanthropy as a way of “giving back” to society. Like anything, philanthropy can be done well, and not so well, and for the right reasons as well as the wrong reasons. These factors are not necessarily connected – someone may support a charitable project purely to feed their ego, yet it may achieve substantial social good. Certainly, doing things for…
I’m thrilled to have joined the experts panel at &Simple, who are focussed on helping FOs and their service providers professionalise and be future-ready through insights, services and data. In my first insight published on their platform, I articulate three principles of good family governance: 1. The stewardship (rather than ownership) mindset: family wealth does not belong to any individual, rather to the family – both present and future. The people who happen to be responsible for it at any time…
How we deal with conflict in family business is totally different to a regular workplace. Why? In family business, we wear multiple hats: family member, co-worker, owner, and those roles can lead to conflicts of interests. The work hierarchy is overlaid by the family hierarchy, and that can lead to … conflicts of interests. And unlike a regular workplace, it’s not quite so easy to just quit for another job. By their nature, families and…
The headlines are everywhere – a high percentage of family businesses have no formal succession plan – and then the story launches in to the usual tropes about estate planning, life insurance, choosing a successor, etc. But maybe we should be turning this upside down? After all, by necessity, a family business succession involves two generations – the incumbent and the rising – and so much of the thinking about succession focusses on (a) the perspective of…
Family offices (FOs) come in so many shapes and sizes that the term ceases to have specific meaning. It’s simply a set of services provided for a family. The origins of the FO often determine their primary focus: there are plenty of FOs that are simply vehicles for co-investment, or glorified reporting platforms. Having a FO essentially means taking a professional approach to managing the affairs of the family. It’s interesting that 92% of FO…
Wealthy people are a soft target at the best of times. The media revels in sensational stories about wealthy families, especially when things go wrong. And if that wasn’t enough, neo-socialists in the US preach redistribution and question whether the world should have billionaires. The emerging “wealth minimisation” movement encourages inheritors to redistribute “excess wealth” for the betterment of society. In some cases, this is about making up for the “harm” done by the wealth…
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