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…
When family wealth is controlled or owned by a single person (usually the wealth creator), things are simple. But at some point, the wealth will likely pass to more than one person – the wealth creator’s children. In respect of the family wealth, the members of the family are bound together through three circles of involvement: family, business and ownership. That adds a huge degree of complexity, as no decision gets made in isolation. Strong…
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…
Most wealth is created through entrepreneurship: taking a risk to start a business, and growing that business. Some families with generationally “old” money (i.e. more than 3-4 generations removed from the wealth creator) may have their family wealth in passive assets, and the entrepreneurial spirit that created it is long gone from memory, sometimes irretrievably lost. For families that hold (or acquire) operating assets, it’s important to maintain that entrepreneurial spirit in subsequent generations, but…
When it comes to advisors, I have two simple rules: Family advisors need additional skills because they must work with the various members or governance structures of a family, and key people & structures may change with time. They need to know about communication, in order to help the family members themselves communicate well. They need to understand family dynamics, and get to know the ins and outs of the families they deal with. They…
There is more to maintaining family wealth through generations than getting the best financial advisors and managers for operating assets. Families of wealth must learn how to work together in the sharing of assets. A key part of that is to integrate their wealth management with their values. That means the values need to be articulated within the family. Then, the family needs clear and open dialogue discussing values as well as financial assets, and…
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