The Importance of Family Harmony for the Ultra-Wealthy
For many families, regardless of their wealth, a harmonious relationship between family members is a goal they strive to achieve. However, according to recent research, the ultra-wealthy, particularly the inheritors, do not feel as strongly as their parents and grandparents about the importance of family harmony.
The study reveals that the older generation in wealthy families, such as matriarchs and patriarchs, emphasize family harmony more than their younger counterparts. For families with enterprises or single-family offices, getting along and maintaining harmonious relationships is crucial to avoid conflicts and support the family's bottom line.
Regarding single-family offices, there is a significant generational difference between the founders and inheritors regarding their desire for family harmony. Most founders (62.3%) strongly desire family harmony, whereas only 17.2% of inheritors agree. This could be because founders want to hold their family together, while the heirs often have different views from their parents in crucial areas, such as investment decisions.
In contrast, it is more challenging for family businesses for inheritors to break ties and pursue their interests independently, as the business is the source of the family's wealth. There may not be other viable wealth-generating options available to them. Therefore, family harmony is crucial for the family business's continuation and success.
Legal tools, such as financial succession plans, have been used by approximately 40% of family enterprise respondents to promote family harmony and cohesion. Elite private client lawyers also report setting up legal structures for wealthy families to dictate how family members should work together, potentially influencing their behavior regarding family enterprises.
Engaging professionals, such as life coaches, family therapists, and family business consultants, to facilitate harmonious relationships between family members is relatively uncommon among the ultra-wealthy, particularly among single-family office inheritors. However, it is more common among family businesses, with the first generation more likely to engage professionals.
In conclusion, family harmony is crucial for the ultra-wealthy to avoid conflicts and maintain the family's wealth. Although inheritors may not feel as strongly about family harmony as their parents and grandparents, they can work together with their families to implement shared values and maintain a cohesive family unit. Professionals, such as psychologists and wealth managers, can also assist in building better relationships among family members.