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How to preserve wealth? The answer is in the family system.

Succeeding as a legacy family over multiple generations is a challenge few families manage well. As families grow and evolve, they are faced with myriad complex governance, strategic, structural and emotional challenges that cannot be resolved quickly or easily.

To create long-term success, a wealth owner and their family must pay attention to the health of their “family system” and develop a comprehensive plan to make the transformations necessary and build a healthy system that creates an environment for individuals, the family and their wealth to thrive.

One of the key components of family wealth preservation is the establishment of a wealth preservation infrastructure, or system of managing wealth. This plan includes a range of systems and processes that are designed to manage and protect the family's wealth.

Some of the key elements of succeeding with wealth across generations include:

  1. History – Define the family, history, culture, and values that should inform the family's future.

  2. Vision – A shared vision of the family’s future including financial and non-financial objectives.

  3. Strategy – Plan how the family will collaborate and utilize resources to meet the goals and objectives for the future.

  4. Structure – Implement the appropriate infrastructure to support the family’s ownership, governance, succession, tax, and investment planning.

  5. Investment – Detailed policies of how family capital is to be invested to create goals based predictable outcomes.

  6. Advisors – Assemble a cohesive team of competent advisors interested in the family’s success.

  7. Reporting – Create a systematic approach to monitoring and reporting the family’s progress, with appropriate benchmarks and metrics.

  8. Engagement – Encourage high levels of communication between family members, and nurture responsible ownership and stewardship.

A series of discussions and interviews with family members, as well as a thorough analysis of the health of the current family situation and future needs can help the family's advisors create a bespoke plan that addresses each of the family's unique needs and goals.

In conclusion, creating and maintaining a family wealth management system is essential for families who want to preserve their wealth across generations. By working with a team of experienced advisors, families can develop a bespoke plan that meets their unique needs and goals and helps them achieve long-term financial success.

By: John McDonald Chartered MCSI.

To find out how we can help you craft your family system, contact;

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