Family Wealth Management

Multi-generational businesses turn to family wealth management firms for assistance in both the preservation and continued growth of financial assets. America always has been, and still is, a land of opportunity where someone with a good idea who isn't afraid of hard work, who will get back up every time she falls, and who perseveres around every obstacle put in her path can achieve success. Our nations history abounds with such stories of successes built on top of failures through sheer grit and determination. Others gain wealth through such diverse paths as the pursuit of education, writing a best-selling novel, or starting an online company that beats the odds. Whether wealth comes from entering a profession such as medicine or the law, from innovation or sweat, or via an inheritance, family wealth management firms provide invaluable services to ensure the fortune stays intact for future generations.

Most people daydream, at one time or another, of having enough money to fulfill their every wish, but the reality of a great fortune is that it carries great responsibility. Scripture has both positive and negative things to say about riches. The Proverbs writer says that: "The rich man's wealth is his strong city: the destruction of the poor is their poverty" (Proverbs 10:15). In this context, money can be a protection against disaster. But the Proverbs writer also writes: "My son, attend unto my wisdom, and bow thine ear to my understanding . . . Lest strangers be filled with thy wealth; and thy labours be in the house of a stranger" (Proverbs 5:1, 10). This passage shows the fleeting nature of riches that aren't properly managed. Lottery winners often find this out the hard way as statistics indicate that, as a whole, this group is notorious for the mishandling of sudden riches. The percentage of lottery winners that declare bankruptcy is astounding and the divorce rate is high compared to the population at large. This is where the services of a quality family wealth management firm are worth every penny of their fee. The professionals can teach individuals who find themselves with a sudden fortune to handle the money appropriately instead of going on spending sprees and binges.

Studies have indicated that one concern of older business owners is that the grandchildren do not appreciate the blessings that money can bring, but take financial security for granted. Often a grandfather spent the majority of his working life establishing a business from scratch. He worked long hours and made many personal sacrifices to found a company that, all these years later, is prosperous and profitable. His own children grew up working in the company and may, as adults, hold responsible positions in the day-to-day management of the business. But the third generation has known only the comforts of a financially secure lifestyle. Through family wealth management, the older generations can ensure that younger generations don't mishandle the fortune that is passed onto them. This can be accomplished by setting up trusts, life estates, and delayed inheritances.

Some families realize that the number of family members is growing faster than the family's fortune. With the help and advice of family wealth management professionals, steps can be taken to insure financial security through various investment strategies. Professionals can also work with families to determine their primary goals and deepest values. Educational workshops and training sessions can be designed for younger relatives to teach them competent money-handling skills and any other important economic lessons they need to learn. A deeper understanding of the family's financial portfolio may encourage the younger generation to have a renewed appreciation for the sacrifices made by their grandparents and parents so that the children (who may now be adults) could enjoy financial blessings. Through family retreats, the family wealth management professionals can assist the younger members celebrate the company's heritage and understand their role in expanding a positive legacy.

Younger members may not have a desire to work for the company, but they should be encouraged to get a college education and pursue their interests and passions even if they never need to work for a living. One aspect of family wealth management is to help those families who want to organize personal giving to set up foundations or explore specific philanthropic endeavors. After the older generations have sacrificed and worked so hard to establish a profitable venture, the younger generations can experience the joy of providing a blessing to others through specially chosen charities. The needs are many and every family can find several organizations or missions that reflect its particular goals and values. A foundation with younger members serving as the board of directors is a great way for adult children to play an important role in the company without necessarily being involved in the daily management. Giving to others just plain feels good and can be a satisfying and engaging experience for those with the wealth to really make a difference.

Whether individuals are faced with unexpected, overnight riches, have worked hard to become a financial success, or are the beneficiaries of a multi-generational fortune, the services of a competent and reputable family wealth management firm will prove invaluable. Primarily, the duties of such a firm should be to protect and increase a family's financial assets through prudent investment strategies. Additionally the wealth management professionals should provide additional services such as educational workshops, specialized training, and assistance in establishing goals and values, particularly through philanthropic endeavors.

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