Page 40 - Waterfall City Issue 10 October 2023
P. 40

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
   35   36   37   38   39   40   41   42   43   44   45