Family Matters - Nov 2019
Welcome to the ‘Family Matters’ newsletter. Every month you'll discover deep insights, thought-provoking discussion points, and commentary on family, business, and what really matters to us.
Upcoming travel: Singapore (early Jan), New York (late Feb), Dubai (early Mar), Singapore (May).
Regards,
David
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The rising generation stands to inherit significant wealth, and families are spending much effort and expense to ensure that they are well prepared to become effective custodians of that wealth. However, it's important for families to also consider the services required to help manage that wealth: advisors.
In any family, at some point in time, the wealth will shift from one generation to another. When someone inherits wealth, it becomes 'theirs'. This contrasts with advisor relationships which 'belonged' to their parents, and can be much harder to fully transition. Many advisors are older and cannot connect to younger heirs. On the other side of that equation, some wealth inheritors are uncomfortable dealing with someone who was their parents' advisor for many years, and want a fresh start to help them individuate and put their stamp on things.
The advisor community is well aware of this impending wealth transition, and are developing their own strategies to deal with it. Some have developed their own succession plans, or are selling out to larger firms. Like their clients, they too need education in shifting generational trends and how to build deeper and multigenerational connections to their client families to reduce the risk of losing the family's business when the wealth transitions.
Consider This: Have you reviewed the relationships between your family and its trusted advisors (lawyers, accountants, wealth managers, family advisors)? Have you had 3-way discussions (two gens of family + advisors) to consider the impact of wealth transition in the advisor relationship context?
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Women are at least 50% of the population, yet historically have been poorly represented in the wealth industry - as custodians and managers of family wealth, in family business, and as advisors. But that is changing on all fronts.
The percentage of wealth in the world held by women is steadily growing - as a result of inheritance (females generally outlive their husbands), divorce and entrepreneurship. In the Middle East, 20-40% of wealth is held by or for women. In Asia, there has been a surge of wealth creation by female entrepreneurs. A new female-led multi family office in San Francisco is taking a different approach to wealth management by incorporating socially-minded investment and personal branding.
Males and females have different investment strategies: for women wealth is a means to an end, while many men see the accumulation of wealth as a goal unto itself. We raise girls to be savers and boys to be risk-takers. Finally, there is significant talent within the female members of wealth families which is waiting to be unlocked, and potentially wasted if not given the right opportunities.
Consider This: What roles do female members have in your family (business, wealth management, philanthropy)? What if anything is holding them back? Are there cultural barriers in your family to their advancement? Are they sufficiently educated to be effective wealth custodians?
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