A solid wealth plan is essential for any private business, but especially for a family business. While wealth accumulation and preservation are important in and of themselves, the ‘family factor’ must be carefully considered in order to establish financial goals that will last generations.
Putting in place a governance structure ahead of time will guide decision-making and ensure open and honest communication. This is especially important when discussing money.
Developing and implementing a wealth management strategy, as well as monitoring and modifying the strategy to accommodate change, are all critical components of wealth management.
Your business, like your family, does not stand still; it evolves. Family businesses are unique in that there is an important dynamic that connects the family and the business through ownership, which provides both opportunities and challenges. Strong family values and a purpose that helps you navigate the journey ahead surround each decision you make. MARKEF‘s advisers understand the dynamics of a successful business and work with you to provide tailored advice — all the way through your company’s lifecycle.
The first step in wealth management is to conduct an inventory. This includes having a thorough understanding of all assets (tangible and intangible) associated with the family and the business, as well as identifying gaps and risks in your current asset portfolio.
Every family is unique, as are every family business and wealth strategy. After creating an inventory and identifying risk areas, it is time to ask a few key questions. It can be difficult to ask and answer difficult questions like these with your family. It is critical that the next generation understands that the decisions they make now can ensure future wealth.
Is there a plan to grow wealth within the family?
Is the plan to grow the family wealth aligned with the values of the family?
Have you established a shared vision for the family wealth?
Does the next generation understand the importance of wealth?
Do you have appropriate structures in place to grow wealth for the family?
After considering your options, it is time to implement a wealth plan. Your plan could include a combination of the following:
Tax planning strategies, including cross-border considerations.
Investment management and diversification of family assets.
Estate planning (wills, trusts, shareholder agreements)
Charitable giving (foundations, trusts)
Family offices (to manage various aspects for the family, such as investments and trusts).
The key to implementing your wealth plan is to ensure that it is
flexible enough to accommodate any changes that might occur in the family or the business.
Wealth management is not a one-time event but a continual and thoughtful process. Businesses can change and so can your family situation, through marriage, divorce, and the addition of children and grandchildren. It is important that while your plan maximizes the value of your assets, it is also flexible enough to change course if needed.
MARKEF‘s business advisers can help you to achieve long-term prosperity and family harmony. We can help with every step of the wealth management process, from putting a governance structure in place to creating an inventory of wealth, devising and implementing a wealth management strategy, as well as ongoing monitoring.