SMART Wealth Management

A familiar affair that can end in tears
There are people who believe that wealth should be kept within the family. They spend generations writing their wills in such a way as to exclude interference from outside forces. The family members are told to sacrifice their personal gain for the good of maintaining the wealth within the family. In the English aristocratic families there is a rule that says that all the property in the family should go to the eldest son. Everyone else is just left with a name.

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.