Ownership starts


with the founder, but as the generations go on then it becomes more fragmented in terms of shareholders


become more distanced from the original wealth creation. Holder says that having a framework of values and purpose acts as a vehicle for future generations. “This is not normally too hard with the first and


second generations as wealth creation is fresh [in their minds]. By the third or fourth generation, however, there are more people and they are a step removed from what went into creating the wealth. Much like a corporation, having a common set of values is helpful to ensure continuity and that the wealth is not lost.” Having a family business can make it easier


The key is to make the next generation into


custodians, rather than consumers, of wealth, says James Holder, head of Northern Europe and head of Family Office for Europe, Middle East and Africa, at Citi Private Bank. “The way that is done depends on so many


variabless—the geography, the culture, whether there is a business involved, or whether it is just liquid wealth to manage. It is essential to identify the imperatives and values that matter to that family and then act on that. There is no one-size-fits-all.”


Keeping on track


Being engaged in the ethos of the family wealth and the values that it entails is something proven to have a positive impact, especially as generations


to impart values too as the family can start the discussion around the business. This can range from its purpose, to how it should or shouldn’t financially support family members, who should own it, who should run it, and what should be the role of those not directly involved. Open discussion to identify people’s needs, skills, and interests is an integral part of the overall process. However, even with a business focus, there


remain issues. “Ownership is different to actually running


the business,” says Russell Prior, head of family governance and family enterprise succession at HSBC Private Bank. “Ownership starts with the founder, but as


the generations go on then it becomes more fragmented in terms of shareholders. By the fourth generation is it common to have people with competing needs and interests, in terms of their involvement in the business, as well as whether they rely on the business for income.” Prior, also the head of philanthropy for the UK,


Central Europe, Middle East, and Africa, says special thought needs to be given to who will run the business and whether someone external needs to be brought in.


ISSUE 75 SUPPLEMENT | 2019


CAMPDENFB.COM


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