Who is Rich?
…. He who rejoices in his lot”! At least that is what we learn from Pirkei Avos (4:1). But unfortunately, many families of wealth have no joy from their wealth; more and more the blessing becomes a curse. Jealousy and entitlement take over and the family finds itself embroiled in fights and mistrust. Families that succeed in preserving both the money and the harmony are rare; most families’ wealth falls apart by the third generation. As the saying goes: “The first genera- tion makes it, the second generation spends it, and the third generation blows it.”
Many times, when it comes to distributing the wealth amongst the next generation, happiness is shattered and infighting and mistrust reign. Unfortunately, statistics show a troubling fact; in 70% of families, the transition causes fights that end with lawsuits and the destruction of the family’s fabric.
When you ask a patriarch or matriarch of a large family what keeps them up at night, the answer is hardly ever the performance of the Investment Portfolio, but rather, the wellbeing and success of the individuals in the family. The family is their greatest asset.
We spoke with Philippe J. Weil, author of the book Woes of the Rich – Seeing beyond the money who has made it his calling to help families of wealth to overcome this curse and make the best out of the blessing of having succeeded in building a fortune, despite all odds. The passionate multi-family office executive, with over 35 years of experience working with private family wealth behind him, has collected a lot of stories on families he encountered in his work. Through these stories Philippe J. Weil illustrates very clearly what the common pitfalls and mistakes are and shows how to best deal with those issues. Weil delineates the most common problems of the wealthy and offers solutions, and he talks a lot about the emotional, spiritual, and psychological impact a surplus of money has on a family.
Philippe J. Weil, and his multi-disciplined team are here to prevent a disaster. Philippe says: “With the proper intervention, a family can flourish for generations.”
When asked, what is it you do differently than any other Asset Manager, Philippe responds: “The traditional wealth management deals mainly with the family’s Financial Capital, I deal with all the capitals of the family: Human Capital, Intellectual Capital, Social Capital, and Spiritual Capital. Only when families address all five capitals, do the happiness, prosperity and family harmony have a chance to last for future generations. A lot comes down to planning and conversations. The family needs to address the taboo, the elephant in the room, in a facilitated inviting environment, where each family member can express his/her concerns, dreams and expectations.
Each family needs a tailor-made solution on how to pass on the wealth to the next generation and preserve the uniqueness of the family. The succession plan of a business-owning family will mainly deal with the business and its management, as well as the owning structure of such a shared business, whereas for families with wealth in the finance sector, the succession will need a different approach. Philippe approaches each family with a beginner’s mind. Each family is a world unto itself, and one must learn its particularities. To quote Tolstoy, “All happy families are alike; each unhappy family is unhappy in its own way”.