FOREWORD | OUR RESEARCH | 2020 AND COVID-19 | 1. TRANSPARENCY | 2. RELOCATION | 3. FAMILY & GENERATIONAL WEALTH | 4. THE ADVISER OF THE FUTURE | ABOUT BDO
NEWVALUES LEGACY & RISK | QUESTIONS LINGER OVER ESG & IMPACT | PHILANTHROPY TRANSDFORMED? | THE IMPACT ON LEGACY | THE SUCCESSION PLANNING STRUGGLE | CONCLUSION
NEWVALUES, LEGACY AND RISK FAMILY & GENERATIONAL WEALTH
Generational shifts in society make planning even harder and disputes can be more common “because next gen doesn’t obey without question anymore,” notes one Singaporean legal adviser. Ultimately, both parties must come together and engage. “If the patriarch or matriarch plans in a black box and then goes under the Number 9 bus – or the private jet equivalent – that leaves the next generation outside the loop,” says a UK lawyer. Successful families have a lot going on and complexity only increases over time. Family governance provides an organisational structure to collaborate and make decisions effectively. “Nobody puts the roof on without building the foundations first,” says a family office adviser and former banker who has worked in the US, Europe and the Middle East. The best advisers will be confident and trusted enough to mediate such discussions and ensure that next generation – the future decision- makers – are involved in foundation-building, even where their intentions and desires may depart from that of the current wealth owner.
This shows that the prospect of having tough conversations is exacerbated by uncertainty as to how those conversations should be executed, so the challenge lies both in principle and practicality. The best advisers will act as mediating – and sometimes therapeutic – forces in facilitating discussions and then implementing plans. Families need to understand what concerns really relate to, and then how these can be addressed. Setting an age to inherit can be arbitrary and prescriptive. What suits your family? If concerns are addressed as early as possible, there are a wide
range of steps a family could take to address them, such as implementing an educational programme or other outside sources to advise. While ‘disputes around succession
“The prospect of having tough conversations is exacerbated by uncertainty as to how those conversations should be executed, so the challenge lies both in principle and practicality.”
“If the patriarch or matriarch plans in a black box and then goes under the Number 9 bus – or the private jet equivalent – that leaves the next generation outside the loop.”
strategy’ is listed by 20.4%, the transfer of wealth is still predominantly a personalities
problem, not a process problem – as one lawyer says of disputes: “they tend to be driven by family dynamics and emotion, not by structures”.
WORLD OF PRIVATE CLIENTS | NOVEMBER 2020 22
Made with FlippingBook HTML5