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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 25

Preparing the Family for Successful Management and Transfer of Wealth

One of the key features of private wealth, and also one of the most important factors family leaders must take into account, is the need to prepare for and support the transfer of wealth across generational and other family divides.

This involves addressing the formal educational needs with regard to family governance and all of the disciplines necessary to support high-quality wealth management programs. While necessary, this may not be sufficient on its own to ensure a successful transfer of wealth from one generation to the next. Formal education on finance and investment needs to be augmented by a more complex psychological and individual effort to ensure that there is sufficient engagement and motivation on the part of the individuals concerned to do a good job when effort, attention, and expertise are most needed.

This dual role of ensuring both engagement and education is a vital task, as much can go wrong in the complex and delicate process of wealth handover from one generation to the next.

A Tidal Wave of Wealth

There is a massive tidal wave of wealth about to transfer across generational lines in the next 40 years. By some estimates, the total wealth faced with the challenge of successful transition exceeds $40 trillion over this time period. Many of these wealth transfers will ultimately be unsuccessful. The main reason for this unhappy record, according to most experts, is the lack of ...

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