Monday, February 4, 2008

A challenge for most wealthy families is that of managing succession

Wealth management starts with the question ‘What is the wealth for?’
A challenge for most wealthy families is that of managing succession. Their great concern is whether the next generation will be willing to assume some responsibility for the wealth.
“Yet each generation and each individual in each generation is different from prior generations,” reminds Mr Charles A. Lowenhaupt, a US-based wealth management expert. “The economics that allowed great wealth to b e built in one era are not the same in another.”

He compares the wealth creator to a collector of art. “He has enjoyed the challenges of building wealth, the excitement of the ‘chase’. When he passes that wealth to his children and asks them to ‘preserve’ the wealth, he is turning them into ‘curators’ of the collection without the excitement and challenges of building the collection.”

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