Alan Beattie, Global Head of Private Wealth Solutions at HSBC Private Banking on protecting your family wealth, ensuring seamless family business succession and creating a sustainable legacy for the next generation.
The future is unpredictable. From economic upheavals and political turmoil to unexpected personal issues, there are a significant number of factors that could adversely affect your wealth and business security and threaten your family’s stability. Even without potential disasters like these, family business succession and wealth transfer is a delicate and complex affair at the best of times. Private Wealth Solutions at HSBC Private Banking is dedicated to helping ease that burden clients may face by equipping them with a lasting governance framework and succession structure to ensure their loved ones are well-protected for generations to come.
Private Wealth Solutions’ legacy of helping wealthy individuals and family businesses successfully navigate the world of wealth planning and protection spans over seven decades. Today, Alan Beattie and his team of Private Wealth Solutions experts specialise in offering an expansive array of services to help successful families ensure their assets and legacy remain safely secure in the long run. Below, he spotlights the most critical factors to building a sustainable future.
It’s never too soon to start planning for the future
Very often, wealthy individuals only begin wealth planning fairly late in life when it becomes paramount to set measures in place for when they retire. It’s rather common to see successful people being slightly reticent to hand over the reigns and control to someone else; even to family members. However, the best way to ensure stability is to get started with wealth protection even as its creation is underway. This allows more time to properly set a ‘road map’ in place, as well as to allow the next generation to be trained in readiness to take over when the time comes.
Early involvement and education of the next generation
It is vital to get the next generations of family members involved in assuming responsibilities and in the operation of the family wealth as early as possible. Not only will their future roles and goals have a huge impact on the business in the future, by involving them early in the discussion and management of the family affairs, they can find their roles and ways in which they can contribute to the overall estate. When they are personally involved with running the family business, not only will it help to ensure smooth operations but it will also foster stability for any potential succession event. As an example, one of our hugely successful clients recently shared that not only did he have his family members playing key roles at every level of his family business, but that he complemented that presence with other external professionals that pushed them to remain competitive and in touch with the outside world. It is precisely this type of forward-thinking that helps build a sustainable future for any family business.
Stay true to your core values
All too often, the direction and drive of the business can collapse without the guiding hand of the original wealth creator at the helm – so much so that all assets may disappear within their children’s lifetime. The problem, known as the ‘Three-Generation Trap’, is a common occurrence. To circumvent this, alongside fostering meaningful roles and responsibilities for all family members, it becomes hugely important to put in place, or at least understand, the core values of the family, and establish a specific vision of the future – a legacy– by which any business succession scheme is run. This sort of mission statement not only preserves the original entrepreneurial spirit of the wealth creator, it can offer guidance and ensure unsound business ventures or overcommitted resources are avoided.
Establish a formal structure
Any family or business is an evolving entity. What works now may not be effective in the future. To protect and enhance family wealth in a sustainable fashion, creating a formal financial structure like as trusts is paramount for long-term success. Private Wealth Solutions at HSBC Private Banking has decades of experience in precisely this field, acting as a trusted independent party that can oversee the multi-faceted aspects of protecting and enhancing family wealth.
From managing trusts and setting up and administering charitable organisations, to family governance, our mission is to help you safeguard the wealth of families, and to grow it, for generations to come. With HSBC, you can be rest assured that your legacy, and more importantly your family, are in capable hands.
DISCLAIMER: The information contained in this article has not been reviewed in the light of your individual circumstances and is for information purposes only. It does not purport to provide legal, taxation or other advice and should not be taken as such. No client or other reader should act or refrain from acting on the basis of the content of this article without seeking specific professional advice.
Issued by The Hongkong and Shanghai Banking Corporation Limited and HSBC Trustee (Hong Kong) Limited.