To maintain a business in the family past the infamous third generation (“the first generation creates, the second grows, the third dissipates,” as the saying goes), it is crucial to have a shared vision, maintain open lines of communication among a wide range of stakeholders, and address concerns about perceived fairness in a transparent manner.

The members of the fifth generation (Gen5) were already in their twenties when a multi-billion dollar construction corporation asked for assistance in making the transition from the third generation (Gen3) to the fourth (Gen4). Historically, only males in the family had jobs at the company, but several female Gen5 family members were close to earning master’s degrees in business-related fields and were eager to join.

Two Gen3 cousins who survived a turbulent transition from Gen2 maintained ownership in equal shares; the primary source of contention concerned non-working owners who lobbied for more significant dividends and were not happy with the working family owners who also got wages (fair according to market norms). Family owners who were not in the workforce at the time want a greater return on their investment. Working-family owners favored expanding the company for ensuing family generations and devoted, intergenerational staff (some valued employees had grandparents who worked for the firm). After bitter debate and legal fighting, the family ownership tree was cut by purchasing out non-working members, but the act irreparably harmed ties. To prevent future issues, the family decided to make it a policy that only working family members may become owners, advised by technical consultants without a thorough understanding of family business dynamics.

Four boys were born to one of the two Gen3 50/50 owner-cousins and two girls to the other. The cousin with daughters had no descendants in his “family line” to take over his share of the firm since, traditionally, women did not work in the industry. One of his daughters wed a gentleman without prior expertise in their field, and both of his 50/50 cousins agreed to push him into the senior management team out of a feeling of “fairness.” The four brothers who had put in a lot of effort their whole lives to acquire their positions felt burdened and furious by this. The brothers, who usually get along well, were enraged and turned on one another. There was loud, heated arguing.

Cliff was tasked with gathering the information, so he started by speaking with spouses and family members, both those who were employed and not. Family members first questioned the need to include spouses of family members; Cliff responded that choices made about the firm’s management, strategic direction, and the transfer of ownership would significantly affect spouses and, ultimately, children.

Cliff added that it would be beneficial to involve a more significant number of stakeholders and to be clear about the specifics of each stakeholder group’s participation (e.g., what information they would have access to, when they would have a vote, and when they would be welcome to share a respected voice but without a vote). This would help handle disagreements that usually occur in these complicated family circumstances and prevent misconceptions. The Gen2-to-Gen3 transition tale was told due to Cliff’s explanation since not everyone knew all the facts and suffering. Everyone is committed to finding suitable means to include all relevant stakeholders and upholding the highest level of openness feasible given the constraints and limitations of being a publicly traded business.

After doing one-on-one and small-group interviews over Zoom, Cliff created a tailored education and feedback session to assist the family in gaining perspective on their predicament and coping with the complicated factors that led to it. Cliff prioritized challenges and actions in collaboration with the board, important non-family personnel, and the family.

Main themes and interventions:

• The family’s incorrect assumption that a technical policy (allowing only working families to hold shares) would resolve future transition issues was the key learning from the previous Gen2-to-Gen3 transition. Instead, top management brought in a new, inexperienced in-law, which led to a lot of tension. Instead of selecting senior management candidates based only on their potential to contribute to the firm, fairness had been defined as allowing each owner (family line) to choose members of their own families for such positions.
• Cliff led conversations on this subject, some of which became rather hot. The family decided that eliminating arbitrary quotas and turning the company into a meritocracy (where individuals are employed and promoted based on ability) would be in everyone’s best interests.
• He assisted the family members in articulating their desire for the company’s income to be reinvested in its expansion. He encouraged the creation of a dividend policy so that shareholders would know precisely when they might access liquid funds.
• Cliff assisted the family in comprehending the difficulty of blending family and company when they felt humiliated about the level of friction and its repercussions on the business and non-family team members. Although there are many crucial technical factors to consider, they must be combined with family dynamics interventions and forms of governance that are distinctive to families.
• A large portion of Cliff’s work with the family consisted of facilitating family gatherings with creative activities to aid in expressing a shared vision and essential guiding principles for current and future generations. The family agreed with Cliff’s suggestion that these components be reviewed in the future so that future generations would have continual involvement and the freedom to make adjustments.
• Cliff worked with them to ascertain if there was a shared desire for the family to work together or operate a business. Every generation must sit down with the older generation or generations to determine if the family will continue to own and operate as a unit or whether certain members will want to pursue their careers or businesses while still being a part of the family. A compromise must be struck over a new vision if there is no shared vision.
• He visited with them in several groups, including spouses, the next generation over the age of 16, working families, non-working families, and spouses. It became apparent that the four brothers wanted to work together again and were prepared to give off lucrative commercial assets to buy out the other half of the family, with whom they had little personal ties.
• Cliff engaged the board of directors, who were glad to have Cliff as a partner to aid with the complex family relations difficulties outside their area of competence. They were able to add value to the buyout deal, which was successfully concluded in a professional manner. Because there was no shared vision in this situation, the family decided that it was better to make difficult decisions and part ways than to continue to be at odds with one another.
• Cliff helped the four brothers quietly discuss differences and develop solutions while working to enhance their communication. They clarified roles and duties, which led to creating joint development plans that built on their strengths and addressed their weaknesses. The conflict significantly decreased with these actions, combined with the buyout.
• They had a good working relationship and liked each other until the in-laws were imposed upon them. Even though they would eventually manage a lesser firm due to what was sold off for the buyout, they were thrilled to be back together and expand their company. Under Cliff’s direction, these brothers developed a family employment strategy as part of their commitment to teaching and developing Gen5. It explained how the family entered the firm, provided the foundation for how ownership would pass to their wives and children moving ahead, and outlined the rights and obligations of ownership.

Women were not expected to work in previous generations, particularly in the family-run construction industry. Still, everyone engaged acknowledged that women were respected as family members and employees. With Gen5, Cliff worked on the family’s aim to provide chances for women with the necessary education and skills. Several female Gen5 family members gained entry into the company and held essential positions due to their education, extracurricular activities, and abilities.

In each situation, parenting presents both possibilities and problems. Parenting becomes more complicated when a family has accumulated substantial wealth. The optimum way to start preparing the next generation of stewards is for couples to do the right things before they have children, or at the very least, throughout the first few years of a child’s life. There are numerous pleasant and effective methods to start the discussion and set realistic expectations, which substantially aid in preventing difficulties, whether you do it at that age or later in childhood, in the adolescent years, or later in life. A crucial point for parents to remember is that this is a long-term process of healthy growth of children and the family as a whole – in a particular environment.

Cliff Locks has specialized knowledge in both the developing sector of family business and wealth creation, as well as child development and parenting. Each family client of His Purposeful Legacy Family Project receives a unique design.

A couple from a central Europe nation fell in love, married, and then relocated to the US to pursue further education. They put forth much effort and finished their chemical engineering graduate study. They successfully gainedemployment in their fields, had modest lives, and saved money.

They established a business after seeing a chance to provide a unique service in their industry. It considerably expanded over eight years, and they were able to sell it $40MM in the process. They eventually had a son and a daughter, who attended elementary school in the middleto upper-middle-class town’s public schools. Due to their prior success, they launched a second firm, and thanks to the long line of potential investors, they were able to raise money with little difficutly. The company was headed towards unicorn status (billion-dollar valuation).

They relocated to a much bigger house in a very upscale neighborhood. Their children started going to a renowned private school. The parents grew more worried about how to create a dialogue about the family’s shifting financial situation without jeopardizing their children’s work ethic, drive, and modest family values. The parents continued to promise to have “the chat” with their kids in high school and conducted quarterly meetings with all of their advisers (trust and estate attorney, CPA, and financial managers).

However, quarter after quarter went by without anything occurring. One of the advisers familiar with Cliff and his specialty practice saw that the parents needed assistance in developing a family development plan. In the end, the parents did not follow through because they had no prior experience having this type of conversation and tended to view it as a one-time conversation – telling the kids they were “rich” – rather than an ongoing process beginning with family history, values, and the knowledge of the past generations before talking money.

Main themes and interventions:

• After a first meeting to get to know one another and learn more about them, everyone decided to work together, and Cliff was hired for a foundational year. He scheduled two sessions with the parents to achieve the following goals:
  • Briefly introduce the dynamics of family wealth (historically and current practices).
  • Create a genogram (family tree chart) to learn about the genealogy and highlight noteworthy family tales to tell the kids. Every family has stories of triumph and tragedy, sage advice, and challenging lessons learned the hard way. To provide the children with a perspective and a stronger sense of connectedness to the larger family, you should share this treasure with them.
  • To customize the project, consider the kids’ maturity and developmental stage.
  • Learn the qualifications of the advisors to the family, their areas of specialization, and their prior initiatives to include the next generation.
  • Encourage parents to draft a Will to discuss with their kids subsequently.
  • Teach the parents how to politely describe their motivation for contacting Cliff. Cliff soothed their anxiety by educating and supporting them.
• The legacy family project was well received by the children, who astonished their parents by being considerably more conscious of and knowledgeable about the family’s substantial fortune. They were eager to meet Cliff and find out more.
• Early sessions with parents and children focused on explaining the process as an ongoing endeavor to ensure that family money supports family values and outlining potential problems for families/heirs in these circumstances.
• Sharing Will as a heartfelt family event.
• To assist the family in identifying their personal and familial values, Cliff guided them through creative activities. These would be turned into mission and vision statements for the family.
• It took time to explain the different forms of capital and their significance, such as human, social, and cultural capital, and to encourage family conversations regarding money as one sort of capital (financial capital).
• Fun family activities to start conversations about family and purpose.

Examples include:

• Needs versus wants
• Importance of wealth in life
• Why are some people pride themselves on contributing to society
• Without focusing on figures or sums, Cliff’s trademark conversations provide context for the family’s riches about all other families in the world.
• The significant humanitarian effort of the parents was described, along with the principles that guided it. Children were previously ignorant of the scope and goal. The children could research relevant issues and “pitch” their parents for financial support based on their presentations, thanks to a procedure that Cliff created modeled after the “Shark Tank” TV program. The emphasis was on the distinction between providing just financial support and the parents’ wish for all family members to participate actively in social issues that were significant to them.
• While the children were growing up in the United States, they were straying from the Christian heritage that their parents shared. The work’s main goal was to enable parents to convey to their children the value of carrying on this heritage without pressuring them or making them rebel. This was accomplished by getting the youngsters to talk about what they understood and enjoyed about their faith and then making a connection between that and what was significant to them in their lives.
• The idea of “wealth,” or the prejudice against affluent individuals merely because they are wealthy, was the focus of many instructional modules. The topics discussed included attending college, getting to know and befriend individuals from lower socioeconomic backgrounds, coping with remarks about “the 1%,” and being able to afford vacations and other “extras” while peers may struggle to pay their bills and make ends meet.
• Cliff created, distributed, and coordinated a range of situational challenges to encourage family discussion about potential future scenarios. These comprised:
  • When, if ever, do you disclose how wealthy your family is to a potential love interest?
  • What are the benefits and drawbacks of having friends that are more diversified vs. friends who are from a similar socioeconomic background?
  • Should you pay for pals who cannot afford to dine out if you have money in your allowance to do so? How is this a bad thing? Positive?
• Since the family had a successful business, time was spent addressing expectations for employment in the company, whether or not the next generation was entitled to it or had to earn it, and how the kids believed they might get access.
• For various planning purposes, a complicated system of trusts had been established. Beneficiaries had little knowledge of the plan or the trustees they would need to work closely with in the future, and trustees had not been educated about their future obligations. To start assisting them all in developing a collaborative mentality and mentoring connections for the future generation, Cliff designed a series of educational sessions to bring together these parties and the advisers in formulating the plan.

The process of assisting a family selling their company involves a wide range of different and essential specialists. Many components need technical expertise, which necessitates the teamwork of accountants, attorneys, merger and acquisition experts, financial consultants, and other professionals. Even when other specialists have expertly handled more technical aspects, the interaction of family dynamics/relationships with family business/wealth might thwart a profitable sale. This is because family dynamics/relationships and family wealth are interdependent. Intelligent professionals seek advice and assistance from family facilitation specialists. They understand that doing this is best for their family clients and, more importantly, is more likely to help them succeed.

For several years, Cliff and a well-known acquisition and merger (M&A) company had a continuing connection, and as their confidence grew, they contacted out on behalf of a client. To be ready to sell their company, two brothers who had built a very prosperous marketing corporation contacted the M&A firm more than a year prior. They had possible purchasers at this time, and the market was ready to sell. The boys were unable to continue because they were trapped. Only that it seemed to be tied to unresolved emotional difficulties between the brothers was all that the M&A specialists understood. The M&A partner reached out to Cliff because he thought Cliff could help in this situation, and he wanted to do what was best for the brothers.

The main themes and interventions were:

• Cliff and one of the M&A business partners had a short phone conversation, during which Cliff offered an hour-long video conference with the partner or two brothers. The brothers were clear in their desire for a speedy settlement, which is routinely demanded but usually not attainable when tensions within the family are high and time is of the essence.
• They understood the history of their relationship: the elder brother had a master’s degree, while the younger did not complete college. They launched the company as equal partners and invested equal money. Years ago, the elder brother requested and obtained an additional $150,000 per year due to his advanced degree.
• On this first contact, Cliff was able to ascertain that the brothers trusted one another, sincerely cared for one another, and were open to compromise — a rare combination that provided a basis for optimism for a speedy settlement. They were confident they wanted the same close, an enjoyable brotherly connection they had as children.
• Cliff proposed arranging a four-hour meeting with the brothers on Friday after spending two hours alone with each brother on a Monday and a Wednesday. The M&A partner agreed to be reachable by phone during that time if necessary.
• Based on the M&A partner’s briefing, the younger brother who arrived on Monday was able to convey his brother’s complaints in a manner that was sympathetic and seemed to be true. Additionally, he was able to admit to and take responsibility for his propensity to keep his mouth shut while discussing crucial business issues with his elder brother, which he knew annoyed him.
• He said that when it came time to stand out and express himself as an adult, he would often become frozen because of an attack he had suffered at the hands of a teacher when he was a youngster. He realized how his elder brother was being harmed by this and felt terrible remorse for it. The event was known to the family, and he let Cliff decide whether to tell the elder brother about it or not, using his best judgment. He was also incensed that his brother received more remuneration despite investing the same amount of time, money, and effort. He felt humiliated and wounded. He felt entirely abandoned when his sibling relocated to another state.
• Cliff debriefed the elder brother; he could now understand the experience appropriately and showed genuine concern and care for his younger brother. He was annoyed that his younger brother never shared this challenge and always appeared to bail out and vanish whenever crucial judgments or strategic planning and choices were to be made. This elder brother desired assistance and leadership. He was disappointed that their company would not go beyond them since he had always imagined that team members would run it once they retired. He went to a different, far-off location and worked remotely, making occasional trips to the company since it seemed like his younger brother was not interested in helping him.
• Cliff highlighted how the younger brother’s inability to speak up for himself in crucial situations linked to the teacher’s attack years earlier. The elder brother suddenly saw the link and that what he first took to be his sibling’s unwillingness to cooperate was an ancient, profound pain. Cliff assisted him in seeing that while his annoyance was fair and understandable, it was being felt out of context.
• The elder brother was sure that his younger sibling hated the additional cash he requested and received and thought it was conceited of him to do so. Cliff recommended he send his brother the apology letter he had prepared during this meeting after he discussed it with him.
• Cliff greeted the brothers and inquired about the younger brother’s receipt of the email at the Friday meeting. He acknowledged it and expressed his gratitude while answering with tears in his eyes. Cliff prompted the elder brother to express his desire to make amends and apologize. The younger brother got forward, and the brothers hugged and sobbed as he gave his brother a high six-figure sum to make up for the years of receiving an “unearned greater salary.”
• They both decided it was time to sell the company, and Cliff gave them some strategic strategies to describe how they would cooperate to accomplish the transaction.
• Being able to comprehend one another’s points of view was a highly developed skill that was essential for healing and progress. The affection they shared and their desire for a brotherly connection were also crucial factors in their success. The siblings were close as brothers and close to closing the deal when this was written.

Immigrants, and in general all parents who work very hard to accumulate wealth, often want to see their offspring benefit from that wealth and own and manage it together. However, problems often ensue when there is a priority on minimizing taxes and less focus on finding out if the next generation wants to work together and has the interest and capability to take it on. These problems can dissipate assets and engender resentment and tension in the family – putting the welfare at risk.

A Singapore immigrant couple came to New York City with nothing. The husband did menial labor, and the wife cleaned houses. They lived simply, worked hard, and saved harder. He learned to be a licensed electrician, and she developed a cleaning business with employees. His contracting business grew; he found a very inexpensive building to store supplies and later turned it into a supply shop for other electricians.

In the same area of Manhattan, they began to buy inexpensive residential properties.

Along the way, they had two sons and a daughter. Meanwhile, the real estate market boomed, and so did the value of their holdings. The children had peripheral experience managing the properties, and all went to college.

When the children were in their late twenties and early thirties, the parents hired an expert in transitioning wealth from a strategic tax perspective – legally avoiding taxes was paramount. With almost no communication directly with the kids, the parents were about to complete some sophisticated and time-consuming planning. Before signing, they sat the kids down to tell them that the first phase would be $30MM in buildings gifted to them directly.

One of the children thanked the parents profusely for their generosity and politely suggested that they might have discussed this more. They expressed concern that the siblings had varying levels of experience and interest in the daily operations. They were not all close, and some significant tensions existed that would make close coordination of shared assets challenging. This child had an MBA specializing in real estate and had taken courses specifically addressing family business dynamics and governance. She suggested they find an expert to help sort things out.

The family contacted and interviewed Cliff and decided to engage him.

Main themes and interventions:

• Cliff interviewed the parents and the three siblings, and the spouse of the one married sibling. It became clear that the father was ill and wanted to be done with daily work responsibilities. The mother was the leader of the family and a very strong business person. Both parents had a dream of the kids owning and working together. They were also aware of the conflict between one of the children and the other two and had hoped they could deal with this through an intricate estate plan.
• Cliff brought the family together for an education and feedback meeting. The educational part focused on getting the family to understand the basic needs and typical dynamics of family businesses. The family dynamics feedback was gentle yet direct and primarily focused on the parents’ generosity and desire to help kids get along. While their hearts were in the right place, they skipped tough family conversations and the long-term development of the next generation. Instead of working with children with a strong interest, they tried to take a shortcut by “papering up” with a technical professional, hoping these documents would ensure the children work and own together effectively and peacefully. Together the family came to see both the loving intentions of the parents – and the missed opportunities to set things up better.
• Through skilled facilitation and with difficult though fruitful conversations, the siblings came to terms with the fact that the two were very close and wanted to work and own together, and the third was more of a loner. He had friends outside the family and a desire to travel and not be burdened with daily real estate management responsibilities.
• A meeting with the family, Cliff, and the estate/tax expert were convened. This expert was clear that his task was to transfer the assets to the children, as requested by his clients (the parents) while minimizing tax liabilities as the priority.
• This professional noted before and during this meeting that many family elements needed to be addressed. He had foreseen the problems for the family and tried to slow the parents down and get them to seek expertise, and they refused. In this meeting, options were presented for various alternate scenarios depending on how the siblings wanted to sort out owning and working together – or not. The parents were willing to sell the buildings outright and split the proceeds into thirds if this was what the siblings wanted based on their new understanding of all the dynamics.
• Over a few months, Cliff worked with the siblings to dig deep into various scenarios. All three siblings agreed that since the buildings had no debt and were quickly increasing in value, they wanted to keep them. The two close siblings wanted to learn how they could leverage the equity in the buildings and do entrepreneurial ventures together while doing it in a way that would be fair to their siblings. Cliff coordinated a variety of professionals to form a team with the expertise to advise on these options.
• As the siblings firmed up their vision and operational details, Cliff helped them clarify and formalize roles and responsibilities so that expectations would be aligned. He also helped them develop a compensation plan for owners and a different compensation plan for operators based on time put in and the market value of the role.
• Cliff and the siblings developed operating principles – guidelines for how they would work together and treat each other. Also, they articulated a process for how decisions would be made. Cliff checked in periodically to ensure siblings were on track and to mentor and facilitate as needed.

When the next generation joins the business, they must focus on assessing their desire to own and lead in the future, along with specific milestones that, when reached, trigger transparent or agreed-upon progressive steps toward formal transition. Transitioning to a family business requires more than just occasionally saying in passing, “someday, this will all be yours.” The younger generation also needs chances to work their way into positions with increased responsibility and strategic decision-making. It is crucial to actively cultivate, communicate often, and engage in activities that foster trust. The elderly generation must often pursue hobbies outside the industry that has consumed most or all of their time for many years.

The father, mother, son, and daughter make up the family. A profitable accounting profession with a big business was left behind by the father forty years before to take a chance on an innovative concept that he unintentionally discovered. As he saw his customers relocating to more extensive and modern workspaces, he concluded that there was a need for more contemporary, high-quality, but moderately priced office furniture. After quitting his company with his wife’s support and slogging through a few tough years, he made connections with manufacturers that could satisfy his standards for style, quality, and pricing. He immediately saw sales rise over his wildest expectations.

The couple’s children, a boy and a daughter, went to college. The son attended a prestigious business school, earned an MBA, and spent ten years working for a renowned consulting company. The daughter studied painting and worked as a full-time art instructor. The son resigned from his job and worked for free for two years to help the company survive when it experienced bad times roughly ten years before Cliff was hired. Along the way, the father vowed to give his son 100% ownership as a present, thanks for starting with nothing and assisting in reviving development. When the daughter began having children and wanted flexibility with her schedule, she adopted a role similar to that of her brother. She undertook administrative and accounting duties and discovered theft by the prior bookkeeper, who was successfully convicted.

Cliff’s family had a lot of tension when he got engaged. The son wondered when the father would retire and hand over complete authority and ownership. The son ran the company as CEO for a while and considered expanding it. The father had a vision and was a great salesman but lacked organization and strategic follow-through.

Additionally, he managed retirement investments for his wife and himself and was losing money that would have been required to retire and be able to pass ownership of the company to his son. This greatly hampered the process. The son also established a date by which he would go if the promised gift of business had not materialized. He had the full backing of his sister and their mother, who thought her husband was not being honest. The family’s primary objective was to accomplish the ownership change while maintaining their sense of harmony.

Main themes and interventions:

• Even though the mother, son, and daughter all recalled that he had promised to give the son and daughter the firm, the father disagreed. He believed he had a right to compensation for the value the son’s company expansion had produced. Knowing that their parents’ future hinged on this money, the son and daughter decided to pay a reasonable, reduced amount in good faith to go ahead. Dad had initially presented the firm as a gift, so they were unhappy about paying for it. Dad’s insistence on being compensated for the business’ expansion made things worse.
• The father had lately disagreed with the family’s assessment of the business. The family accepted Cliff’s offer to bring a reliable business valuation firm. The family started debating the reduced price since they thought the newly established value sounded fair. They formalized a term sheet with the aid of several meetings and Cliff’s talent for soothing upset families and fostering meaningful conversation.
• Like many company owners, the father was so engrossed in his enterprise that he neglected the interests and pastimes he had formerly enjoyed. Although families often get bogged down by the day-to-day responsibilities under these circumstances, the entrepreneur must have a strategy for a fulfilling life beyond the company. Cliff gave the father advice on how to create a strategy to resume playing golf, traveling, and fishing. Additionally, he collaborated with the couple to identify shared interests and develop a plan for their future together following the sale of the company. This was essential to the transition’s success.
• The father lost substantial money in their retirement fund due to his many financial management errors. Father consented to his wife’s desire for a strategy designed under expert supervision and with pressure from the kids. Cliff advised the mother to conduct a fearful and unfamiliar conversation with a Certified Financial Planner (CFP). Before deciding on a suitable candidate to introduce her husband to, she conducted several interviews and sought the advice of her friends. Together, they started outlining achievable objectives and an investment strategy based on the price at which the company would be sold to the kids. The son and daughter, who were upset yet wanted to see their parents taken care of, also felt at ease and secure when their future vision was grounded in a practical strategy.
• Weekly one-on-one mentoring sessions with the father were used to help him sift through his conflicting emotions about leaving his company while still honoring his past and present family responsibilities. Due to his ambivalence, he alternated between making commitments and taking action to hand over the company to the children, only to change his mind, aggravating and upsetting the family. He could calm things down, control his impulsivity, and create a plan he could commit to and carry out with the support of individual mentoring.
• The daughter wanted to contribute more to the company, particularly when she and her brother took over, since she lacked the business background that her brother possessed. Cliff collaborated with her on a growth plan that included courses, seminars, conferences, and individual learning. To assist her in developing as a manager and potential business owner, Cliff worked with the siblings to establish a mentorship relationship in which the brother would introduce her to more aspects unfamiliar with the company.
• The family had a thorough transition plan after the engagement, was executing it, and was once again able to enjoy non-work-related family interactions.

Many excellent accountants, attorneys, wealth managers, and other allied professionals do a great job for their family clients. It can be hard to stand out when competing for business, and wealthy families and families with operating companies have special needs. When professionals ally themselves with outside expertise, they differentiate themselves from the competition and better connect with prospective family clients.

A well-known wealth manager who frequently appeared on national media was often vetted by large families with very significant assets but was not engaged with the frequency he wanted. He was looking for a way to set himself apart from others much like him. He was introduced to Cliff and explained his dilemma and desire to attract and engage more of these families. He often invited these families to nice dinners at upscale establishments for education about investing and what made him different than other wealth managers.

Main themes and interventions:

• Cliff provided education about family business/wealth dynamics and governance for this wealth management expert and his team. He brought them up to speed about the growing field and families’ unique needs, which spurred the field’s growth.
• Cliff visited dinner events to see how they were being run. He noticed potential clients losing interest as they were overwhelmed by technical presentations. Cliff suggested he collaborate with the team; they make their technical presentation shorter, and then Cliff presented on the issues which these families were most concerned about:
  • Will my wealth hurt my children? How much should I pass to them, and how?
  • Can the next generation take over the business successfully? Will my loyal employees be able to have security, and my children, nieces, and nephews get along?
  • What will I do if I walk away from my business?
• Cliff trained the team to understand and address these issues on their own going forward.
• Upon seeing the desire of potential clients to talk deeply about their families at the dinner events, Cliff sat at tables, engaged them deeply in conversation, and landed the firm a new client for the first time. Cliff mentored the team to be better listeners and to weave knowledge of family dynamics into their conversations with prospective family clients.

What are the top 10 problems or concerns that wealthy families have?

According to the study, the following are the main issues or concerns concerning family and societal dynamics:

• CONCERNS/PROBLEMS RELATED TO WEALTH              
  • • Succession
    • Government scrutiny
    • Cyber-crime
    • Distrust of asset managers and personal assistants 
    • Global political climate
• CONCERNS/PROBLEMS RELATED TO FAMILY/SOCIAL DYNAMICS
  • • Children growing up spoiled
    • The threat of kidnappings
    • Family and friends asking for money
    • Health/environmental issues

I looked at how often they were mentioned in surveys and reports to identify the top issues and problems. The frequency with which it is cited functioned as a criterion for inclusion since most of these reports did not include hierarchal measures.

Below is a breakdown of the findings of this research.

CONCERNS/PROBLEMS RELATED TO WEALTH

1 – Succession     

In a poll by Knight Frank, affluent families’ main worry was the succession problem, cited by 85% of respondents.

Wealthinasiashared the challenges of family succession are emphasized. In addition to the issue of who should inherit the company and its assets, improper handling of this procedure might have serious legal repercussions. All people should be concerned about this, but for very affluent families, it becomes an issue of cross-border policy and ensuring that the succession process complies with the rules of the many nations and jurisdictions.

2 – Government scrutiny

According to a Knight Frank poll, 80% of participants identified government surveillance of the rich as a top worry. This is related to the anticipated rise in taxes on the rich, which 81% of survey participants said was a top worry.

An article in the Financial Times underlines that governments worldwide are moving to raise taxes or policies for the affluent, emphasizing the growth in government monitoring of the wealthy.

3 – Cyber-crime

According to a Knight Frank poll, 76% of affluent respondents cited cybercrime as a top worry. This refers to both the theft of personal information and reputation damage.

According to a Worth, wealthy families often own assets comparable to those of significant firms but do not have the security measures to safeguard these corporations. According to the story, a family member routinely emails to seek money transfers without realizing that a cybercriminal is watching their communications and would later scam them. This article mentions the constant risk of extortion and defamation from online criminals.

Beyond cybercrime and extortion, a Time article asserts that a significant financial issue for the rich is that they are more likely to be sued. The report states that 80% of those with a net worth of more than $20 million are sued as an essential worry. This is based on a Prince & Associates study.

4 – Distrust of asset managers and personal assistants

According to a Time article highlighting the top worries of affluent people and those who handle their families’ finances, the wealthy have a significant mistrust of asset managers and personal assistants.

This article uses the tale of a rich guy who stashed $1 million in gold coins beneath his bed as an illustration. The deceased man’s aide was still there in the home after he died away, but the gold money vanished.

5 – Global political climate

According to the Knight Frank research, around 50% of respondents said that economic instability in China and political upheaval in regions like Russia/Ukraine and the Middle East are their top two worries.

As was already said, the assets of affluent families mimic those of major enterprises. Since these assets are essentially not geographically constrained, turmoil and crises in other regions of the globe provide serious hurdles to these families’ efforts to increase and preserve their fortune.

CONCERNS/PROBLEMS RELATED TO FAMILY/SOCIAL DYNAMICS

1 – Growing up spoilt children

According to an article by Boston College’s Center on Wealth and Philanthropy, which is included in a Time story, wealthy families are most concerned that their children would grow up with a feeling of entitlement, which will hinder them from developing empathy and compassion. This source offers the instance of a rich guy whose grown children and their families were living off of his assets. To sustain their lifestyles, the father got up early every morning and traded on the stock market.

2 – The threat of kidnappings

The genuine fear of kidnappings is a significant issue for privileged families. Ivan Kaspersky, the son of software magnate Eugene Kaspersky, was abducted by this source. Ivan, a 20-year-old, was abducted and held hostage for a 3 million euro ransom. Thankfully, the kidnappers let go of the young guy. According to an article in The Register, between 200 and 300 children from wealthy families are stolen in Russia each year.

3 – Family and friends asking for money

Rich families also face the huge issue of their friends and extended family treating them “like banks.” Dealing with either the guilt or the obligation to assist in providing for others may be a lifetime hardship, according to a poll respondent.

According to an article on My Bank Tracker, many affluent families have resorted to setting up “family banks,” where members must go through the typical loan application procedure.

4 – Health/environmental issues

According to the Knight Frank survey, 67% of rich respondents are concerned about environmental and public health problems.

Affluent people engage in a regular cardiovascular exercise of some kind. This study also shows that the rich had healthier diets than the poor, abstaining from fast food, binge drinking, and consuming less sugar.

5 – Dubious friendships

Very High Net Worth people worry about their friendships. A genuine concern is: “Are they just my pals because of my wealth?”

There are examples of a senior executive who claims that when his family had a financial setback, his ‘friends’ vanished without a trace. These “friends” did not return until the family had healed.

The uncertainty about their friends’ motives was also mentioned by several respondents in a Boston College research on wealthy families as one of their main worries.

CONCLUSION

In conclusion, affluent families’ top worries and troubles about their money include succession challenges, government surveillance, cybercrime, mistrust of asset managers and personal assistants, and the current state of world politics. In terms of family/social dynamics, affluent families’ top worries and difficulties include their children growing up spoilt, the fear of kidnappings, relatives and acquaintances requesting money, health, environmental concerns, and shady friendships.