According to Investopedia, more than $68 trillion is expected to change hands to next generations over the next 25 years. The latest figure, according to Forbes, is an estimated $84 trillion. The transition of an estate from experienced hands of one generation to the untrained hands of the next generation may be overwhelming.
According to Price Waterhouse Cooper’s 2023 U.S. Family Business Survey, one-third of family businesses have a succession plan in place. Is this the case for your family business? A 2020 Harvard Business Review article on family businesses affirmed that “the best business succession hand offs are often years in the making.”
When the plan is to transition the business to the next generation, all too often, the mindset is to just hand of the reins. Having worked with multiple generations of family businesses, the first stage of effective planning is to incorporate the business succession planning into the family’s estate planning, understanding that to do it right, time needs to be invested with a clear strategy of succession factors in place.
This year’s Boston Marathon took me down memory lane. While working at John Hancock, I applied to run in the 2015 Boston Marathon on a sponsor’s exemption. I was nervous, and uncertain what the event would be like, but I knew it was a goal to go after if I was selected. The very next day I received the good news. That’s when the big questions started coming.
What do I do now? What do I do next? How should I train even though I know how to run? What is the process for preparation to be able to reach the goal of crossing that finish line?
Life’s wealth planning stages of beginning, accumulating, supplementing, and then transitioning can seem overwhelming when you are realizing you should have been planning more intentionally all along later in life.
Late-stage wealth transitioning or transfer is something that many clients have a challenge with because of what they may not have considered along the way. Many find it difficult to change their “perspective” from saving and accumulating to spending and giving.
A Q3 2022 Bloomberg article cited some fascinating, but unsurprising data regarding the struggle many wealthy families face in their estate planning. The 2022 study conducted by UBS Group AG surveyed 4500 clients at the Swiss Bank with at least $1 million in investible assets around the globe.
Two thirds of the investors claimed to struggle with dividing their assets fairly. The harsh reality for many future heirs was that assets were going to be distributed unevenly for a variety of reasons.
Growing up with a family winery, I naturally adopted an appreciation for wine and wine making that evolved into being both a critic and a connoisseur. Our family’s wine is made like the families of centuries ago in Europe, grown in virgin soil never before used for agriculture. Pure natural winemaking from clearing the land, planting the vines, reaping the harvest, fermenting, and aging with precision, and then bottling onsite. All within our control, every aspect, to assure the best quality and taste for discerning palates.
Now as a financial advisor, I have noticed many similarities between the meticulous attention to details and process of winemaking with the process of financial and wealth planning. Our approach to financial planning and blog is entitled Pure Perspective to pay tribute to a pure process. In this second installment of our blog, I will share how the process of winemaking over generations is similar to how it is best to approach financial planning.
Malcolm Gladwell’s 10,000-hour rule states that “the key to achieving true expertise in any skill is simply a matter of practicing, albeit in the correct way, for at least 10,000 hours.” When you break this down, 10,000 hours is the equivalent to a little shy of five years at 40-hour work weeks. We believe that pure perspective is essential for “true expertise” to be relevant. Combine the definition of true expertise with our belief that experiences through generations served, thousands of case studies, and decades of witnessing our industry evolve, and you begin to see why we believe that true expertise isn’t enough without pure perspective. You need both.
So, what is Pure Perspective?
Welcome to our Pure Perspective blog, designed to provide insights, information, and options for you to consider whether you are beginning your financial journey, accumulating wealth and assets, or supplementing in your retirement years. Through decades of serving multiple generations, we have served as a sounding board, a guide, and advisor when critical decisions needed to be made.