UBS Wealth Management Jersey Director and Senior Client Advisor Marc Nightingale addresses the challenges of modern-day succession planning
We are in constant communication with our clients, and a question frequently raised that can be one of the trickiest to answer is: “What is it all for?”
The truth is, the question of what wealth is fundamentally for has no single answer and is a deeply personal matter for most individuals. Is wealth simply to be enjoyed by the people who have made it?
Those with children and grandchildren usually feel a sense of responsibility to their descendants. However, setting them up in life without taking away their drive and incentive for success can be complicated.
Many families face real challenges and dilemmas when it comes to making plans for transferring wealth to the next generation. UBS has often been the facilitator of conversations about what can be very emotional and even life-defining themes.
Much discussion about wealth transfer focuses on minimising tax liabilities, but that can miss the bigger picture. Aspects such as future relationships, marriage and divorce can be the most significant risk factors impacting the wealth of a family.
Experienced advisers
At UBS, our advice is based on our experience of working over many years with individuals and families who have faced similar challenges. Parents sometimes have opposing views on how best to set up their children in life or to involve them in the planning process.
Increasing house prices and school fees have placed greater emphasis on these two aspects of succession planning. Creating a sense of fairness between siblings with different interests and skills is also often one of the biggest challenges.
Additionally, family structures are getting more complex and the decisions being made may affect multiple generations. Deciding when to tell children or grandchildren about the extent of wealth is often a difficult decision.
Some wealthy individuals also want to balance the needs of their children with philanthropy. Discussions are often raised about the selection of projects that have the most impact and how the importance of this type of investment is communicated to beneficiaries.
Transferring wealth from one generation to the next can have its difficulties. One approach may be not to think about it as ‘succession planning’ at all. There is unlikely to be one single moment when the entire family gathers to agree the shape of any settlement. Most situations will be different, reflecting a family’s values, its wealth levels and its approach to parenting.
A broader conversation
My role as a Client Advisor at UBS is to help families understand what the purpose of money really is for their situation. Managing wealth is about more than just seeking the most secure investments and highest financial returns. At its best, managing wealth is part of a much broader conversation about long-term financial planning, which continues over many years and even decades.
Wealthy individuals will ask themselves any number of challenging questions: “What are my overall goals? What do I want to achieve in the rest of my life? What are my children’s goals? How can I best help my children reach those goals?”
Wealth planning, including the transfer of wealth to the next generation, should be sufficiently flexible to deal with changing priorities and withstand future challenges.
In the past, a wealth manager might have focused on the investment aspects, without being part of these more subtle and complicated interactions. Facilitating essential conversations about the most complex and sensitive issues is also vitally important to overall wealth planning.
The financial products and solutions may, in the end, be relatively simple to find. When thinking about succession planning, the difficult part is always helping clients find an answer to the important question: “What is it all for?”
FIND OUT MORE
For more information on how UBS Wealth Management in Jersey can provide support, please contact:
Marc Nightingale, Senior Client Advisor UBS AG, Jersey Branch
1, IFC
St Helier,
Jersey JE2 3BX
Tel: 01534 701173
Email: marc.nightingale@ubs.com
• This advertising feature was first published in the September/October edition of Businesslife magazine