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Family Wealth Management: Seven Imperatives for Successful Investing in the New World Order by Tom McCullough, Mark Haynes Daniell

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Chapter 12

The Elements of Long-Term Strategy

A long-term strategic wealth plan is the map for the family’s investing journey. Such a plan helps the family think through the reasons for the structure and allocation of its wealth, provides clear guidance and direction for the future, offers protection from the behavioral biases that challenge all investors (especially during a crisis), and is a valuable tool for keeping a wealth management plan on track.

Yet that long-term plan also needs to be flexible and adaptable; it needs to be reviewed and adjusted regularly based on changes in the external environment and as needed as the family evolves. Nothing is fixed forever. The realities of the world as they unfold are often different from the ones envisaged when the plan was conceived.

Focused yet flexible may be the watchwords of long-term family investment success.

Components of the Plan

While there are many ways to approach wealth planning, regardless of the actual framework employed, the following components should be present in almost any wealth plan:

  • The family context, including philosophy, vision, and values.
  • Family goals and financial objectives.
  • Family balance sheet analysis.
  • Definition of risk and approach to risk management.
  • Cash flow forecast and scenario analysis.
  • Family elements of long-term strategy.
  • Economic and financial market perspectives.
  • Asset allocation and investment policy.
  • Asset classes and investment tactics.
  • Operational considerations.
  • Tax and structure ...

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