For a family office, managing wealth for just one generation can already be challenging. Ensuring the family wealth will continue to grow while preserving wealth for future generations is an even more complicated task. There is so much to consider, and then when you add the complexities of family politics into the mix, the task becomes that much more ominous. But as with the most tricky terrains, with a thoroughly considered, pre-emptive, and future-focused-thinking, there is no reason why future generations’ wealth should come under threat each time generational change is on the horizon.
Why do family offices need to focus on preserving wealth through generations?
Generations exhaust wealth
Family businesses appeal to consumers all over the world, and this is not exactly surprising. The general assumption is that if a group of related people wholeheartedly invest themselves into something, the result will most likely be a good-quality product or a service. Yet, the organisations that families control don’t usually survive the generational transition the way they should. More specifically: nearly all enterprises get entirely wiped out around the time when founders’ grandchildren step behind the wheel. Why is that?