Without a financial strategy, many affluent families can miss on long-lasting wealth. Without effective planning, family wealth disintegrates over time as it spreads over a growing number of family members. An estimated 70% of affluent families lose their wealth by the second generation and 90% lose their wealth by the third.
Wealthy families in Saudi Arabia and throughout the region face many challenges:
1. Family Wealth Disintegration
As the founder ages, the pool of wealth is subdivided among a greater number of heirs
2. Pressures on Sustained Living Standards
The price of luxury living extremely well has increased 10x over the last 40 years.
3. Risky Investment Decisions
Poorly planned investments can rapidly erode assets in a short period of time.
4. Maturing Core Business
As the business matures, the company pays dividends to shareholders rather than reinvesting in the growth of the company.
5. Tax Inefficiencies
Different types of taxation across jurisdictions can cause a significant drain on assets if not correctly managed.
6. Lack of True Diversification
A lot of family wealth is invested in local assets, including local real estate and stock market, which often leads to over-exposure. True diversification can only be achieved through investment in non-correlated asset classes on a global basis.
The children and grandchildren of wealthy individuals who grew up without financial worries often neglect financial planning and investment as they grow older. But families who create a financial strategy with expert advisors can achieve financial security for generations. Thanks to the magic of compounding returns, forward-thinking families can receive generous incomes while they continue to grow their wealth over the long term.
The most effective wealth heritage planning advisors keep the source of wealth in a centralized portfolio. This way, multiple family members can benefit from a generous income, while the value of the overall wealth is preserved over time.
Heritage Wealth Planning is a common way for affluent families to secure a financial legacy for their children, grandchildren and beyond. At The Family Office, our team of experts consider the income and lifestyle requirements of the whole family and create a tailor-made heritage wealth plan for you.
We’ll find the balance between the risk needed for your goals and preferred standard of living. Using our network and decades of experience, we create tax-efficient, internationally diversified portfolios, so your wealth can last and grow for generations upon generations.
To start building your lasting family wealth, speak to your financial experts today.
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