Skip to main content
Tag

succession risk assessment

How not to sell a Family Business

By Articles, Familosophy, LinkedIn, original No Comments

0% of all businesses do not sell, and only about 30% of family businesses get handed down to the next generation. If it doesn’t sell and isn’t passed down, what happens? Typically, they die a “slow death”, or are liquidated. Understanding why businesses don’t sell is the key to maximising the value of your own family business. Many family businesses are “lifestyle” businesses – they deliver cash to the family, but are starved of the…

Read More

Sudden Wealth

By Articles, Familosophy, LinkedIn, original No Comments

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…

Read More

Talking about it

By Articles, Familosophy, LinkedIn, original No Comments

One of the biggest challenges in wealthy families is when/how to talk about the family wealth to children. There are a number of factors to consider: 1. Being aware of other ways children will learn about it themselves, e.g. from the media, direct research, and from friends (it’s a bit like sex education). Would you rather your children find out about the family wealth from reports and rumours that are laden with assumptions? It’s better…

Read More

Giving it away

By Articles, Familosophy, LinkedIn, original No Comments

The challenges of bringing up children with wealth are predicated on the idea that said wealth will transition to said children. But what if it won’t? Some families are thinking more about giving away the bulk or almost all of the family wealth to charity. In the US, families are talking about giving a maximum of $15M to each child (and the rest to charity). There are different reasons driving this (don’t want to leave…

Read More

The e-word

By Articles, Familosophy, LinkedIn, original No Comments

The e-word – “entitlement” – comes up in almost every presentation or lecture I give, and in many family discussions. It has become almost a dirty word when it comes to family wealth – something to be avoided at all cost. “How can I prevent my children from becoming entitled?” is what most every parent wants to know. When it comes to family business, limiting the negative impact of entitlement can be achieved by instilling…

Read More

Talking about Money

By Articles, Familosophy, LinkedIn, original No Comments

Money is one of the few remaining taboo topics for discussion, but in wealthy families, it’s something that eventually does need to be discussed. The challenge is to develop a greater comfort in discussing it. The first step towards this is to understand the reason for discomfort, and it is usually because discussions about money bring on fear: fear that there isn’t or won’t be enough, that the next generation might be spoilt by excess,…

Read More

Politics and Family

By Articles, Familosophy, LinkedIn, original No Comments

With the recent US midterm elections in the news, there is talk of generational shifts in the electorate (which will take some time still to have a significant impact), and with the further polarisation within the US, the way political affiliations have come between friends and family members. This fascinating NPR podcast discusses how political preferences are driven by hidden moral frameworks. The nation is often described using the family as a metaphor, with terms…

Read More

Advisor Transition

By Articles, Familosophy, LinkedIn, original No Comments

With all the talk about intergenerational wealth transition, another very important topic doesn’t get the attention it deserves: transition of trusted adviser relationships. The baby boomer generation of advisers manage a third of all client assets, and they too have retirement plans. Firms need to manage the succession planning of these advisers, and this means both advisers and families need to manage the transition of the relationships. In my family, we’ve had relationships with banks,…

Read More

The kids aren’t interested …

By Articles, Familosophy, LinkedIn, original No Comments

Medium to large sized family business (turnover $50M+) have a problem: the next generation aren’t interested in joining. There are so many options out there in the job market (jobs that didn’t exist in the previous generation) that the family business often doesn’t hold an interest. Grant Thornton’s July 2017 report ‘Diversity of Thought in Family Businesses’ discusses the risk-averse nature of mature family businesses that can often be an impediment to the next generation…

Read More

Purpose in Retirement

By Articles, Familosophy, LinkedIn, original No Comments

People are living longer, which means time spent in ‘retirement’ is increasing – the latest US Census figures report the average retirement is 18 years. The huge numbers of Baby Boomers moving into this stage of life is becoming a phenomenon of its own, and could potentially ‘reinvent’ what retirement actually looks like. Just because they are ‘old’, doesn’t mean the huge Baby Boomer cohort won’t continue to change society rather than ride off quietly…

Read More