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Mastering the challenge of family wealth

Following on from Tor’s ‘Shirtsleeves to Shirtsleeves’ post a few weeks ago I wanted to expand on the theme of mastering the challenge of family wealth.  It is a truism that family wealth gets dwindled away across three generations but it is interesting to dig further and to look at the families that have managed to avoid this.

Learning from successfully wealthy families
Through harnessing the insights, approaches and experiences of the world’s most successful and respected ultra-high-net-worth-families, it is possible to provide leaders of other wealthy families with the tools they need to design and implement the best possible strategies to keep their wealth intact and growing across future generations.

The importance of a strategic framework
Even though there are a plethora of articles and resources available to aid families and considering the enormous amount of money at stake, there has been little practical advice as to how families should respond to the phenomenon of growing wealth.  The reason is that every situation is unique and as such the information is hard to pull together in a coherent and usable model.

Whilst the time costs and efforts required can be higher than initially expected, particularly for the newly rich, the returns for a strategic framework and family strategy can be enormous, especially considering the costs of failure could be catastrophic.

The seven principles of Strategy for the ultra-high-net-worth family
Principle 1 – Create and set a family strategy with an objective of multi-generational preservation and growth of family wealth.
Principle 2 – Organise and structure the family and manage the surrounding eco-system.
Principle 3 – Structure asset holdings and adopt practices for long-term asset preservation.
Principle 4 – Diversify assets and access the most appropriate investments through a formal process of asset allocation and wealth management.
Principle 5 – Clarify and integrate family business strategy with long-term family wealth plans.
Principle 6 – Share wealth in a manner that unites the family and gives it meaning.
Principle 7 – Remember the unique nature of individual family members.

Family wealth is different from any other type of strategy.  Every family is unique and it requires a thought process that lasts across at least three generations.  In the pursuit of the goal of a happier and more fulfilled life one cannot lose sight of the fact that that a family is both an entity in itself and a collection of individual members.

At MASECO we have been working since our inception with some of the wealthiest international families who have decided to make London their home.  A relationship with families that starts with fiduciary management and then goes beyond to creating frameworks around true financial stewardship is at the heart of how we work with our clients.

Risk Warnings and Important Information
The value of investments can fall as well as rise.  You may not get back what you invest.
The above article does not take into account the specific goals or requirements of individual users. You should carefully consider the suitability of any strategies along with your financial situation prior to making any decisions on an appropriate strategy.

MASECO LLP trading as MASECO Private Wealth is authorised and regulated by the Financial Conduct Authority, the Financial Conduct Authority does not regulate tax advice.  MASECO Private Wealth is not a tax specialist. We strongly recommend that every client seeks their own tax advice prior to acting on any of the strategies described in this document.


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