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Intergenerational wealth management

May 26, 2015

family-silhouetteDavid Leslie, a director of Belmont Asset Management in Cape Town, takes a look at the concept of intergenerational wealth management.

Intergenerational wealth management is an approach to wealth management that spans different generations within a family.

We often encounter a situation where the generation that built up the family’s wealth wants to see that wealth preserved for future generations. But how does a family know when it’s the right for the financial reins to pass to the next generation? And how should they go about implementing this handover? This is where a trusted wealth manager comes in.

Managing the transition

Good communication and a structured handover from one generation to the next are crucial elements in the success of this process.

When the reins pass, so too do the responsibilities that go hand in hand with wealth. It is incumbent upon the incoming generation to take the time and effort to understand how the family’s investments have been managed in the past before making any decisions about future management. A trusted, independent wealth manager is a crucial resource at this important time and provides a ‘steady hand at the tiller’ and essential continuity to the family.

This can be a very difficult time for families, especially for the older generation who are relinquishing some of the responsibility that they have shouldered for years. The most important aspect is trust between all parties. Without trust, the entire exercise is futile.

The importance of a personal relationship

Personal relationships between the wealth manager and the family help to establish trust and allow proper, professional communication about the service being provided. This delivers peace of mind to both the outgoing and the incoming generations.

At Belmont, one of our aims is to offer lasting value to our clients and this means developing relationships with the next generation wherever possible. This process should begin long before the reins are actually handed over. As the custodians of a significant portion of our clients’ wealth, we value personal relationships with each client and these often extend to their descendants.

One generation’s investment objectives are likely to differ from the next generation’s, so it is important that we understand these changing needs and preferences. This allows us to make astute and well planned changes to investment portfolios when necessary.


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Maya Fisher-French author of Money Questions Answered

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