Elmar Wiederin explains why wealth owners need independent and impartial wealth partners to help manage and distribute financial assets.
Maintaining and growing wealth is a responsible job. Especially if you are doing this job for other people, as is the case in a family or when wealth is being handed over generations. If you are responsible for a family’s wealth, you have to proceed in a very structured, careful way.
Everything hinges on the question of what the wealth is for: should your company remain in the hands of the family for generations to come, or should the wealth be maximized regardless of what its constituent parts are? Should the whole fortune be kept together, or when the time comes should it be divided among the heirs?
Should everything be passed on to the next generation, or should some of it be used for charitable purposes? Discussing these matters can be a very delicate business, and all too often the issue is avoided. But this can lead to the decline of the business, disputes between siblings and cousins, or consternation at having to deal with large sums of money. An open conversation at the right time, led by an outsider, can save endless frustrating attempts to sort out the mess later on.
"An open conversation at the right time can save endless frustrating attempts to sort out the mess later on."
We live in uncertain times: legal action against companies is on the increase, governments are moving aggressively against presumed wrongdoing, and traditional family structures are often being replaced by patchwork models. All of these factors can potentially put the maintenance of family wealth at risk. A legal ownership structure in the form of a trust or foundation creates additional protection, makes succession planning easier and can create legal opportunities for tax optimization. Such structures can be used to hold not only companies but also financial assets, property, art collections, and yachts.
A structured, careful process not only increases returns, but above all reduces risk, avoids possible strife within the family, and gives you more time to enjoy life. The costs involved are far outweighed by the gains.