Page 40 - Waterfall City Issue 10 October 2023

Waterfall City News

Ensure that you are for their responsibilities, mentoring, Risk profiling and aligning
benefiting from the scale of understanding individual needs, and financial plans with your risk
your family’s assets co-crafting a common vision. appetite
Increasingly, families support one Just as there is a need for family
another with investment products This can be a difficult task in times of financial plans to cater to the needs of
for minors, and individuals who are increasingly complex family structures a family unit as well as the individual
starting their careers still have to build over multiple generations who may members of that family, there is also a
up an asset base that will attract better currently live off a family’s collective need to plan for nuanced differences
fees based on higher asset values. wealth. However, a continued in risk profiling and how these change
commitment to successfully address over time. Bluntly applying a single
Family-aggregated pricing is a critical these issues enables easier discussions risk profile to multi-decade investment
component of holistic financial planning around the financial planning horizons does not acknowledge a
for families. It refers to costs based on technicalities of timing, structures family’s cash flow requirements in the
the collective assets of a family rather and amounts to ensure that family short, medium or long-term, nor does
than on the assets of a single portfolio members are well prepared. it cater appropriately for cash flow or
or the assets of an individual investor. financial planning needs of individuals
Fees charged on larger asset bases are Ensuring that the privacy of within families.
often more competitive. individuals is respected
While aggregated pricing for families It is crucial that financial plans unpack,
Families that share a can be advantageous for a family, plan and implement suitable strategic
common vision and objective individuals within that family may want asset allocation at both individual and
for family wealth have an to pursue additional personalised and product levels.
advantage private financial advice separate from
Having collective ownership of that of the family, including assurances Speak to your financial
the meaning of wealth isn’t learnt that financial affairs are kept personal. adviser
overnight. Much of it is gained Advice is personalised and nuanced, Holistic financial planning for families is
through sharing experiences, earning and there is a need to balance the complex, but a robust and flexible plan
trust, and showcasing sufficient benefits of aggregating assets at a that caters to the needs and aspirations
individual responsibility to sustain family level with catering to the needs of family units as well as their individual
future intergenerational wealth. This of the individual members of the family members, in a complementary
includes preparing future beneficiaries family. way, is invaluable.

“70% of wealthy families
studied lost their wealth

within the second generation,
and 90% within the third.”

38 Waterfall City Issue 10 2023