For the conservatives no one should be punished for wealth creation because it is their birthright and their moral duty to develop the family assets. They see a sort of class envy as the driving force behind liberal resistance to any reform of the death duties regime.

For the liberals wealth management is a trick of birth. While they may tolerate rich people in life, they find it difficult to let them pass on that wealth to their children. As far as the pure liberal thought is concerned, any results of wealth management are due to the suppression of someone else in the economy. There is a mantra that is well known in the political Left which concludes that in order to be rich you have to make someone else poor. Therefore the beneficiaries of wealth management practice have to be forced to share their gains with the rest of the community.

The compromise of political dogma
These two positions are rather extreme and you will find that most political groupings will fall somewhere in between. However they do reflect the polarizing issue of wealth management when it comes to the state policy on families. Unfortunately for the super rich, the death duties have very little impact on the ordinary person.

The thresholds have been suitably raised in order to ensure that the policy does not alienate a significant portion of the voting public. The super rich are an exclusive club and modern democracy means that they really have to go with the voting decisions of the majority. The majority happen to be poor so it seems that death duties are with us for a long time.

We then move on to the question of the impact of this after life tax on the wealth management initiatives that have grown over the past few decades. Will rich people stop working hard in order to avoid the death duties? Will they emigrate to tax havens? Will the economies collapse when the wealth management spirit is crushed? All these questions are up in the air and the politicians are grappling with the task of finding suitable answers to them. I have a well founded suspicion that wealth management is a reality and will not go away despite the best efforts of the political factions.

What is happening is a testament to the innovative spirit of rich people. They have come up with quite interesting ways of dealing with the hated death duty regime. One of the more innovative tricks is to distribute the estate before they die. This means that the wealth management units are too small to come within the grasp of the legislative regime. I am sure the government is likewise spending its time coming up with new ways of trapping these new innovative schemes.

Nevertheless a lot can be achieved in terms of wealth management if you prepare and know what you are doing. To this end I have decided to prepare a short resume of some of the issues that you might have to consider as you work out your wealth management initiative.

I wish we were in an interactive setting because I am always interested in ideas from the people who read my articles. There may be some people who have wealth management experience. Such readers would provide invaluable feedback as we all try to explore this frightening prospect.

Be prepared for the challenges of going alone :-

1. Education is a crucial factor when you are trying to do something on your own.
Some people flippantly say that knowledge is power. Never has a truer word been spoken as the assertion that without adequate knowledge, your wealth management scheme will collapse around you. Education is the means through which you can acquire this knowledge.

If your portfolio is particularly complex, I would not rule out going for a formal course just to be sure of what you are doing. Apprenticeships are also a good way of getting a feel for the industry that you are trying to join. Please do not think that I am going way over the top. Wealth management is a serious matter and if it not handled with the seriousness that it deserves, there will be plenty of losses awaiting you.

2. For the investor who decides to do their own wealth management, certain courage of convictions is a must.
If you find that you are unable to consider the possibility of failure then at least you will be half way to the moral courage that will be crucial to the success of your wealth scheme. In the process you are likely to face many setbacks and challenges.

However if you really want to succeed then there is nothing that can really touch you. I suppose that if you have the ambition on tap, then personal wealth management cannot seriously challenge you. Most people who have successfully grown their businesses have done so on the basis of personal ambition and determination. The same principle has to apply in DIY wealth management.

3. I am the one who is always talking about Thinking Big.
There is a time for thinking big when you are trying to develop your own wealth management strategy. However this has to be the culmination of a long period of hard work and reflection. If you intend to think big at the very first instance of wealth management, then there is a high risk that you will not succeed. As always, baby steps are a crucial part of your progress.

I would hope that the harsh lessons that have been fostered on us will go some way in assisting us to deliver record profits. I am going a bit religious here but I agree with the assertion that what does not break you makes you stronger. If you are one of the survivors of the economic downturn then you should be looking to make the best use of the lessons that you have learned, making comeback during economy recovery period.

Over the last two years I have been constantly reflecting on the economic downturn and how it has affected my business plans or where I need to be. Sometimes I have felt that the world is trying to stop me from doing business while at other times I have felt that I might be stopping myself from doing business. Either way wealth management and financial budgeting has been the area of my life that has been significantly affected by this unfortunate set of circumstances.

In homage to that difficult period, I have come up with a list of ways in which you can still manage your wealth despite the harsh realities of the business environment. This is a personal reflection that I hope I can share with my readers. Whenever I find similar reflections on the internet, I try to explore them because that is how I gain some of the knowledge that helps me cope with the downturn.

Opportunities can arise from the darkest depths
One of the lessons we have learned is to properly assess risk before investing. This is a crucial point for wealth management because you might be putting your life savings on the line. Imagine if you lose everything just because you failed to pay attention to a certain risk and spot potentially bad investment move. I know that there is no guarantee of risk free investment , but you could better manage the risks involved. At very least, if you are trying to mitigate it the pain is not so hard to bear.

Those of us who take a gang hoe attitude to wealth management have paid a very dear price. If you are a survivor of stock market downturn then perhaps next time you will make risk assessment and managing those risks the heart of your investing and wealth management program, not losing our mind when assessing investment activities and trading prospects.

Try to be at the center of any opportunities that arise out of the global downturn. I once gave you an example of a supermarket that completely changed from luxury goods to value shopping as a response to the global downturn. This is the type of wealth management innovation that can save you from the worst of the storm. If people are getting poorer then there is no sense in continuing to invest in luxury products. You would rather look to the type of products that they are searching for in their new economic circumstances.

Nevertheless you can borrow some ideas from the normal systems for wealth management in order to develop your scheme. I am writing from the perspective of the powerful members of the family group. It is entirely possible that some of you will have a totally different take on things if you are one of the less influential members. Nevertheless I hope that we can learn from one another. This should serve as an introduction for you to do further research.

Dealing with family challenges

1. There has to be a “Boss”. I know that this can be quite challenging if you have family members that disrespect one another. However if you do not have someone in charge, the wealth management scheme will go into disarray. The boss in the wealth management context does not have to be the head of the family. It could be anyone who is financially astute or who has the contacts to make the business run. It is essential that everyone in the family accepts this leader or else they will waste their time trying to sabotage the whole family wealth management scheme.



2. Once you have identified a leader you will then have to allocate roles for each of the major factions. All families have factions no matter what they may say in public. The family factions may involve one person or more than one person. The leader has to identify these factions and allocate them responsibilities within the wealth management scheme. For those people who have been allocated tasks, they will need to own them. Ownership means taking responsibility for the success and failures of the wealth management scheme.
3. When undertaking wealth management as a family, it will be important to identify those people who are simply unable to participate in the scheme on any level. This could be because they do not want to get involved.
4. Alternatively you may decide as a family that they are not a desirable element in the wealth management scheme. I know of people who are so anti business that if you put them into such a context they would ruin it for everyone. I think it is better to get rid of such personalities before they can do untold damage to the family.
5. Doing all the tasks above will create conflict. You may have to come to the conclusion that in order to do effective wealth management and gain sustainable growth, you might be forced to buy out some family members. This is nothing to be ashamed of. It is just good business acumen to recognize when some of your people are just not up to the job.

The reasoning behind this is that the property is never split up. Some estates have managed to make this system work for them. The estates remain intact and the other family members have to suffer poverty. Women could particularly be vulnerable in this position, as history speaks for itself.

The general chauvinistic feeling is that ladies will marry and their property will go with them. This means that if they became inheritors of wealth, they would inevitably pass it on to their husband’s family. For some this was an unacceptable method of disposing of wealth. As for the younger sons, they had to fend for themselves. It is not entirely surprising that some of the children from the wealthiest families live in abject poverty. That is because the inheritance rules have deliberately excluded them.

The dangers of unitary control
This system of wealth management can work if the eldest son is visionary. Unfortunately for many families, that might not be the case. Instead of maintaining and growing the capital, family members began to fritter the wealth away.

The rest of the older generation could only look on as their long held properties was sold so that the elders  could enjoy a new luxurious living lifestyle. Without mentioning names, there are great families that has suffered this fate.

What then for the issue of wealth management within the family? I think that there is still room to manage your wealth with the people who are closest to you. It only needs a little careful thought and planning to execute. I can also see the advantages of working with people with whom you happen to have a familiar bond. Even if there are disagreements, you can always come up with a mutually acceptable resolution. With an external party you have the detachment of professionalism. However this can come at a cost if that professionalism is masking bad intentions.

Conclusion
The first thing that you need to consider if you are going to work as a family is what your objectives are. This will then form your business plan for the wealth management. There will be some differences in perspectives and ambitions. Nevertheless you can always look to unite these into one big plan. If you have all agreed to a wealth management protocol that would sustain the wealth growth, the implementation will be much easier. In some cultures this is the only model that is available. If you go any other way, it will be seen as a betrayal of your family.