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hnwi Archives - David Werdiger

Family Office Priorities

Family Office Priorities

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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…

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Wealth Guilt & Shame

Wealth Guilt & Shame

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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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Transition - Hold or Fold

Transition; hold or fold?

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Kenny Rogers sang of the importance of knowing “when to hold ’em, and when to fold ’em”. Any succession plan worth its salt isn’t just a plan of who will succeed whom in running the business. It also needs a “Plan B” for the scenarios where the chosen successor is unwilling or unable, where there is no successor, or where a generational transition of the business might lead to serious conflict. Some business founders/owners enjoy…

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windfall liquidity wealth risk

Windfall liquidity carries risk

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Coming into wealth suddenly – such as through inheritance or a windfall liquidity event of a family business – can carry serious risks. The rapid change in financial circumstance can lead to poor decision-making, a loss of perspective, and social isolation. It can lead to a dysfunctional relationship with money/wealth. In the case of inheritance, there can be mixed or conflicting emotions of loss and gain. It can be like winning the lottery, and research…

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The Problem with Wealth - Publicity goes both ways

The Problem with Wealth

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This is a difficult topic to broach, and needs to be done only in appropriate settings – indeed, that might be the most important message of this topic. After the story of BMW heiress Susanne Klatten went public, she was slammed on social media. Her personal challenges – the responsibility, self-doubt, and being targeted by scammers – are real. But it’s very hard for anyone brought up without wealth to have any sympathy (and often it’s the reverse), so seeking it from ‘outsiders’ is almost a waste of time.

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Purpose in Family Business

Purpose in Family Business

By Articles, Familosophy, Featured Posts, In The News, LinkedIn, original No Comments

Family business has positives and negatives – our aim should be leverage the positives and seek to mitigate the negatives. One important distinguishing feature of family businesses is that they can embody a sense of purpose. The original purpose of the business founder may have been wealth creation. However, as the business evolves and additional family members join, it’s an opportunity for the family as a group to discuss and articulate their collective values and…

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3 generation trope

The 3 Generation Trope

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It’s a most quoted statistic – “just 13% of family businesses survive the third generation” – and it has finally been challenged. It comes from a single study of US manufacturing companies in the 1980s, and for some reason it has stuck and become almost axiomatic. But it is deeply flawed. Most importantly, it never compared family businesses to non-family businesses (family businesses on average do last longer), and it also never considered the reasons why those…

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The future of finance is women

The future is … female

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Research has shown that in HNW families, daughters were rarely encouraged nor received support to pursue entrepreneurship education. Entrepreneurial families often prepare their daughters and sons differently for their careers. Cultural factors and their associated gender biases may result in the problem being far more pronounced. Things are changing. Some 82 per cent of women from wealthy families expect to inherit substantial wealth over the next 20 years, but 41 per cent of women are…

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Communications 2nd Generation

Communication isn’t important …

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Research has shown that 60 per cent of failed intergenerational family wealth transition are due to problems with trust or communication. Communication isn’t important in families. It is everything. If a family cannot communicate, it cannot function as a group. It’s that simple. What does poor communication look like? An absence or lack of communication (e.g. “it’s none of their business”, “they don’t need to know”, “we know what is best for them”) is patronising, infantilising,…

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Intergenerational Resilience

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#Intergenerational necessity, vulnerabilities, and resilience are typical factors addressed in determining wealth transition. However, adapting to the changing demands, expectations and opportunities in the disruption via #pandemic will epically force family businesses to rethink their strategies. The immediate need for #workfromhome, revised #familybusiness strategy, #riskassessment, and governance are paramount for pivoting to #nextgeneration and #futureofwork organizations. In the UK, the final report by the Intergenerational Commission speaks in terms of an intergenerational contract – “the principle that…

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