In Asia, it can take only three generations for a family’s wealth to disappear. Wealth planning is key to long-term wealth preservation
In Europe, there are families that have preserved their wealth for 17, 20 or even 25 generations. In Asia that it takes three generations or less for family wealth to be created and lost, often due to common mistakes and missteps over the years. The most common mistake is poorly structured assets lead which leads to wealth erosion.
Adding to this challenge is the difficulty and complexity of structuring assets that are now more spread out than ever before, with family members and wealth in different jurisdictions around the world. Furthermore, as families grow, so does the demand on the existing wealth and without properly managing this, wealth erosion can happen very quickly.
What is a Family Office?
To avoid wealth erosion and structure, protect and preserve assets so that they may be passed on to the next generation, wealthy families will establish a Family Office, either a Single or Multi-Family Office.
A Single Family Office is a private organisation that manages the investments for a single wealthy family. Among other services, it provides the following benefits:
- Provides financial oversight of all liquid financial assets
- Provides the management of assets such as properties etc
- Through Family Charters / Constitutions and other means it improves family cohesion and generational transition
- Offers a governance framework – a Family Office provides a set of family governance rules that foster family cohesion, growth and future business success.
A Family Office will result in a number of benefits for the family. Firstly, it will allow wealth to grow and be transferred across generations. It allows for the centralisation of the management of the family fortune where assets can be managed, money invested and disbursed to family members in a controlled, sustainable manner.
Importantly, a Family Office will improve family relations, communication and governance and institutionalise family governance in a fair and transparent manner. This will ensure family harmony and reduce the risk of conflict.
How can Alpadis Group help you?
Alpadis Group will facilitate the setup of your family office and build a strong family and business governance framework. We are an independent advisor providing independent, bespoke, technology-enabled wealth services for private clients.
We will help:
- Define your Family Office ‘vision’, the purpose and therefore the structure of your Family Office
- Set up your Family Office and bring in the right advisors and experts to facilitate
- Assist with the day-to-day back office administration of the family office
- Assist with value-added services around insurance solutions, citizenship by investment, private equity, origination and support among other things
- Create a Family Governance Plan that includes a Family Constitution, facilitating regular assemblies of family members
Given the continuing worldwide development on tax transparency and increasing scrutiny over structures in offshore jurisdictions, it is essential that families start to institutionalise the management of their family matters and investment management through a family office structure.
Contact Alpadis Group here