The Meaning of Wealth in the 21st Century: Unlocking the secrets of successful families
'Wealth matters because of what you can do with it.'
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No one would argue with this premise, but what do successful families think they should do with their wealth? How do they overcome the challenges of continuity and cohesion through generational succession? How do they approach the education, training and development of younger generations? And how do the answers to these questions vary in different parts of the world?
To find answer to these questions, and many more, we arranged in-depth interviews with 16 multi-millionaires and billionaires from Asia, Europe and the USA, speaking to family business members from the first up to the sixth generation. Working with research agency Scorpio Partnership, we also assessed the responses of these interviewees against 12 surveys of over 4,500 individuals with over US$10 million of wealth.
Different stages, different places
The research identified three main stages in the life-cycles of family businesses:
- The operational business
- The financial family
- Consideration of economic and social purpose
The families we spoke to around the world were in different stages, but a pattern emerged of more Asian families in operational businesses, more European families that have sold their businesses and are engaging in the investment and preservation of their wealth, and more US families who have frequently been through the financial family stage, and are now considering the social and philanthropic application of their wealth.
This latter stage is particularly interesting, and is best summed up by one interviewee, who had the following view of his family wealth:
'The most important things are how you make it and how you distribute it. If you can do that in a way that is socially acceptable and keeps your family happy, then you are winning.'
The right advice at the right time
The research also examines the role of professional advisors, what value they can bring to successful families, and when is the right time for them to be brought into the family business.
There was general agreement that expert external advice is essential, but finding the right match and getting general agreement throughout the family are issues that must be considered with care.