Once a family has wealth, it is difficult to keep it. All sorts of factors — including growth in the number of family members, inflation, taxes, poor investments, predatory advisors and family breakdown — work together to deplete family wealth over time.
The Rothschild and Vanderbilt families had very different outcomes. Discover what factors are the best predictors of long term family wealth retention.
The financial industry and media tell you to beat the market or find the best fund. How can a family focus on the horizons, not the headlines and ensure their objectives are met?
Before rushing in and taking action, successful families come up with answers to critical questions like “What is the money for?, “Who is it for?” and “When will we need it?”.
Just like a corporation has a balance sheet with assets on one side and liabilities and equity on the other, families have a balance sheet too. The key is understanding what the liabilities are and how assets should be used to meet those liabilities.
Successful families have calculated the estimated cost of all of their objectives and determined how they will use their income and assets to fund those goals. An investment portfolio’s job is not simply to “go up” – it is to fund the family’s goals
There are countless measures of risk, from standard deviation to VAR to Sharpe ratios. But there is only one risk that really matters, and mountain climbers understand it better than most investors.
Managing private wealth is a complex task with many moving pieces. Most families (like the Spencers in this video clip) have multiple advisors, hold a wide range of investments and receive thousands of pieces of paper each year. Many families have engaged a family office or another integrated advisor to help them successfully manage their financial affairs.
Most wealthy families will have money left over at the end of their lives and many will plan to transition that to the next generation and possibly future ones. Successful families make plans to ensure that the money is prepared for the heirs and the heirs are prepared for the money!
Our book sets out to correct three lopsided perspectives that are widely followed by investors. We put the focus back on the investor (vs. the investments), the liabilities or goals (vs. the assets), and the management of risk (vs. a simplistic search for returns).
The age-old truism of “shirtsleeves to shirtsleeves in three generations” stills affects most wealthy families. We wrote this book to help families preserve both their wealth and their family goals and values, and to provide some practical tools to improve their chances of success.
The keys themes of the book are all about putting the family and their goals back at the centre of the family wealth management process, and avoiding the traditional traps and pitfall most families face.
This book has insights and practical tools for leaders and members of wealthy families and for the advisors that serve them.
Families and advisors can benefit from both the perspective and wisdom this book brings, along with the many practical tips and sample documents it provides. It will help families develop a customized plan for their own wealth and increase their probability of long term success.
The seven imperatives are a step-by-step guide to the development of an effective family wealth plan. Each comes with a detailed description, practical examples, and useful implementation tips and suggestions.
Risk is much more than volatility and families need to fully grasp the risks they face and how they impact both family and finance.