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Significant wealth requires not only managing wealth for the family, but also preparing the family for wealth. Why is it that so many families fail to achieve lasting wealth succession beyond the second generation?
There are no reasons for failure which are common to all families faced with the dilemma of successful wealth transfer. It has been observed that the most significant cause of failure is a lack of effective communication and understanding of the wealth to be transferred.
What is also clear is that the management of the actual financial transition, which is typically supervised by experts in liability control and risk mitigation, is rarely the reason for failure.
The path to successful wealth transition is seldom the same for two families, but common to all successful transitions is the acceptance that it does not just happen. Action must be taken, an approach developed and the process managed.
Family governance is at the heart of successful stewardship of family wealth. The governance rules provide the framework for execution and help the family stay on track. They are not fixed in stone and must evolve with the changing circumstances of the family. But neither should they be ignored if the family is to remain a cohesive unit and preserve its wealth for future generations.
MELBOURNE
Michael Smolders
Head of Family Office
& Wealth Services - Melbourne
Telephone: 61 3 9207 3000
SYDNEY
Jason Swan
Senior Client Adviser - Sydney
Telephone: 61 2 9224 7600
PERTH
Julian Butler
Head of Family Office
& Wealth Services - Perth
Telephone: 61 8 9230 7700