Managing Wealth Among Family Members – Ownership and Responsibilities

Rate this post

Managing one another for the common good
family businessIn another part, we’ve discussed the relevance of family members in the wealth management . Here, we shall try to gather some tips for how to make sure that you can effectively grow your portfolio. The rules for managing wealth within the family differ from the other methods because you have quite some emotional baggage that you will have to consider in your schemes. For example it is not a very easy thing to sack a beloved member of the family.

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. family business management

  3. 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.
  4. 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.
  5. 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.
  6. 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.