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Family feuds are complicated by wealth

Family feuds are complicated by wealth

Advisers add stability by preparing the next generation, U.S. Trust survey finds

By Minda Smiley   |  June 20, 2014 – 1:25 pm EST

Turns out there’s proof that money doesn’t solve all problems.

Family dynamics and complex financial circumstances are often complicated by increased wealth, the 2014 U.S. Trust Insights on Wealth and Worth survey found.

“We would argue that wealth doesn’t ruin heirs and family dynamics. Poor communication, broken trust relationships in families, and keeping heirs in the dark about their roles and responsibilities until they are a certain age (when they suddenly are expected to have learned such responsibility completely by osmosis) most certainly do,” Chris Heilmann, chief fiduciary executive at U.S. Trust, said during a media webcast Friday.

According to the survey, few wealthy parents believe their children will be mature enough to handle family money before the age of 25, and only 38% have fully disclosed their financial status to their children.

“We see professional guidance improves inheritance confidence. Parents with a professional financial adviser are more likely to believe their children will be well prepared to handle the inheritance they will receive,” Mr. Heilmann said. “The vast majority of parents currently working with a financial adviser believe their children would benefit from a discussion with an adviser as well.”

Heilmann said the greatest risks to family wealth include addictions or impulsive behavior, divorce, and disagreements over inheritance or distribution of family assets.

The survey showed that nearly six in 10 wealthy people have provided financial support to a member of their immediate or extended family other than their spouse, with one-third saying they provide ongoing financial support. However, only 3% have a financial plan that addresses this need.

“Our exploration into changing structures and roles points to the need of a more modern approach to family wealth management. Gender and generational perspectives directly affect views on parenting, communication, relationships and the roles of family members, all of which in turn affect one’s concept of self-worth and ultimately family wealth,” Keith Banks, president of U.S. Trust, said during the webcast.

 

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About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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