Engineering generational prosperity
with the Family Wealth Navigator

By integrating adaptive asset allocation with forward-thinking insight,
families are able to gain clarity, predictability, and strategy over their wealth.

How a family allocates its wealth, across both its business and assets, is often the most tangible starting point for discussions about wealth and relationships. These elements are both the financial core, and lifeblood of a family’s existence. The way a family approaches this intersection is crucial for its long-term health and success.

Moreover, when families commence the wealth planning journey they quickly encounter a challenge: the practicalities. In other words, the practicalities of implementing a strategic wealth plan, across all the various categories of wealth.

In this article, we will introduce the Family Wealth Navigator as a useful tool for managing these practicalities.

The Family Wealth Navigator is a dynamic tool to:

  • Align business operations, investments and expenditures with a family’s values and goals
  • Provide a transparent overview of family holdings, income sources, along with strategies for prosperity, diversification, risk management, and wealth preservation
  • Assist with cash flow and expenditure planning, enabling families to steward their wealth across generations, and cultivate a “family enterprise” mindset
  • Provide a foundation for making critical decisions about dividing family wealth, and about investment management

The Family Wealth Navigator not only streamlines the practicalities of financial management – but also enhances family dynamics through fostering financial transparency and understanding. After all, clear accounts are essential for trust not only in business, but also within the family. They are key to maintaining healthy relationships, and ensuring that financial clarity and predictability go hand-in-hand with familial unity.

 

The balance between disclosure and privacy in family wealth: the challenge

In an age where information is readily accessible online, and where parent lifestyles and possessions can offer clues about their wealth, it’s unrealistic to assume the younger generation will remain oblivious. Complete secrecy may not only be impractical but can also lead to misconceptions.

On the flip side, transparency about family wealth can be a double-edged sword. Providing too much information too early, or to too wide an audience, may foster a sense of entitlement among younger family members. They might develop unrealistic expectations about their future lifestyle and financial independence. Or, their personal ambition and responsibility may suffer, as they may feel they have a permanent “safety net”. Conversely, a lack of disclosure can lead to myths, over-estimations, and inflated expectations about the family’s finances. In turn, this may lead to financial missteps when they eventually receive their inheritance.

Privacy and autonomy play a significant role in this disclosure, and can affect relationships between spouses (and across generations). Parents may aim to cultivate financial responsibility, and thus monitor spending, saving, and investing habits. At the same time, it is wise to recognize the importance of privacy. In our experience, the distinction between “we-money” and “me-money” is crucial. Younger members need the freedom to experiment and learn – without feeling the need to justify every expenditure to their parents.

This applies to parents, too. Like their children, they may also prefer to maintain privacy around their wealth and spending habits, without wanting to justify (or be criticised for) their financial choices. Of course, there is room for mutual dialogue about individual and collective family spending – particularly in the context of budgeting and financial allocations.

So the Family Wealth Navigator does not suggest a level of transparency where people feel uncomfortable, or that every single financial decision should be disclosed to the entire family.

In our experience, most families have hidden “income streams” for some members and “off-balance-sheet transactions”. This is a result of individual privacy needs and requirements.

There are pros and cons to this approach, but generally we believe family systems operate better over the long term if financial transparency and disclosure is discussed proactively within the family. After all, the balance between individual discretion in spending and investing with collective decision-making is delicate.

Navigating this balance requires careful consideration of the family’s values, the maturity of its younger members, and the long-term implications of financial disclosure.

Typically, the responsibility of determining the level and timing of financial transparency falls to the older generation. They decide when and to whom financial details are revealed, often choosing full transparency at specific life milestones (or even once they have passed away). It is crucial that families are aligned on this approach, as it plays a vital role in cultivating effective wealth management and a healthy financial culture.

 

Introducing the Family Wealth Navigator

We do not claim that the Family Wealth Navigator is a revolutionary financial tool. But we believe it addresses a commonly neglected area in family wealth management: strategic planning and forecasting across all wealth, not just financial assets.

Many families maintain thorough accounting and reporting systems for their assets. Yet they often lack a comprehensive strategic tool for financial planning and forecasting. Think of this as a tool a successful business might use, including essential elements like budgeting, expense tracking, forecasting, and cash flow analysis.

The utility of this tool lies in its adaptability. To a family’s evolving circumstances, the business environment, and external economic, political, and social risks. It’s more than a static inventory: it enables families to understand and adapt to the continuous interaction between various assets, income, and expenses. To facilitate this dynamic approach requires an ongoing and disciplined strategic wealth plan and asset allocation, paired with meticulous reporting, controlling, and risk management. It’s essential to capture changes within individual assets, family needs, macroeconomic shifts, and other challenges.

But often families must piece together data from multiple, disparate sources, impairing control and insight. Such fragmentation makes it hard to comprehend the entire financial landscape.

Instead, we advocate for the necessity of comprehensive, current information across all types of assets. This should include obvious aspects like rental income from properties, dividends from business ventures, and returns from diversified investment portfolios, but also less apparent factors.

For example, costs and revenues might encompass:

  • Maintenance and operating expenses of high-value assets
  • Tax liabilities linked to various investments
  • Income from intellectual property rights
  • The financial impact of philanthropic activities

Moreover, it’s also vital to understand the implications of currency fluctuations on cross-border assets, track the performance of venture capital investments, and manage the costs associated with estate planning and legal structures.

It’s well-known how important real-time data and proactive strategies are to managing family wealth. The integration of technology in this process is increasingly crucial – and an opportunity to involve the younger generation, who often bring fresh insights and understanding of the latest tools.

Without this combination of strategic overview and meticulous data tracking, achieving effective financial planning is hard – across the short, mid, and long term. In turn, this failure can expose the family’s wealth to considerable risks, like being forced to sell assets at inopportune moments, accepting unfavourable loan conditions, and missing out on lucrative investment opportunities.

To manage these complexities, different assets need to be categorised comprehensively. That way, it’s clear how they interrelate and interact across various family life cycles. Consider, for instance, a business that acts as the primary cash generator for family spending, diversified investments, and philanthropy.

  • What if this business experiences a downturn, or requires more liquidity for investment than it generates?
  • How should a family determine the right amount to invest in non-yielding tangible assets like collectibles (which may appreciate in value but also require ongoing funding)?
  • If the business is sold, what lifestyle can the family afford, and how should proceeds be allocated among different asset categories and individuals over time?
  • How can a family ensure they have enough liquidity to seize attractive investment opportunities as they arise?

These are just some examples of the contingencies wealth owners face in their financial planning, across the various categories of wealth.

Now let us explore those contingencies in more detail, starting with our six categories:

Business Assets

  • Often initial source of wealth and part of legacy
  • Income generator for other categories
  • Liquidity retained for business demands and risk management
  • Balancing cash accessibility with asset diversification

Lifestyle needs

  • Liquidity needs (for daily life, education, taxes, social security, insurance, retirement planning, asset maintenance, etc.)
  • Physical assets purchased for enjoyment. Some depreciate; all cost money to maintain

Direct investments

  • Venture capital; taking active stakes in non-core businesses
  • Training ground for younger generation
  • Source of wealth creation and yield
  • Business-diversification: potential future legacy assets

Real assets

  • Physical assets for investment
  • Split between yielding (real estate, land, infrastructure, energy assets) and non-yielding (precious metals, art, collectibles)
  • Appreciation potential, diversification

Financial assets

  • Diversified financial market investments and new financial instruments
  • “Family bank”
  • “Opportunity pot”
  • “Nest-egg portfolios”
  • Liquidity strategy to cover the unexpected

Sharing and impact

  • Traditional: yield-driven portfolios support regular distributions
  • Emerging: entrepreneurial ventures focused on social and environmental change, fostering growth and measurable impact

1. Business assets: the core of family wealth and legacy

Business assets are often the cornerstone of a family’s wealth creation and legacy. These assets, typically from an operating business established by the founder, are the engine driving financial growth and entrepreneurial activity.

In the early stages of entrepreneurship, personal assets and liquidity are closely intertwined with the business. During the foundation and growth phases, entrepreneurs face a period of high growth potential, and are usually focused on expanding and solidifying the business. This stage often has limited diversification of assets, as the entrepreneur’s financial well-being is tightly bound to the success of their business.

But during maturity and stabilisation, opportunities appear for an entrepreneur to derive value from the business. This stage necessitates critical decisions on profit allocation, balancing the need to reinvest sufficient capital for day-to-day operations and unexpected demands against the potential to diversify investments.

There is often the challenge of maintaining substantial cash reserves due to the inherent uncertainty in business. It is crucial, therefore, to explore more productive and accessible investment avenues, ensuring that these options also offer the flexibility to meet any unforeseen business needs while aiding in wealth diversification.

Addressing governance issues may also become a challenge during this phase, such as:

  • Establishing formal shareholder agreements
  • Consolidating international corporate structures
  • Clearly delineating between business and personal assets to diversify and manage risks

These measures are essential to safeguard both the business and the family’s broader financial interests, providing a secure framework for future growth and legacy preservation.

If a family wishes to create and safeguard its wealth across the generations, maintaining ownership and control of the operating business may be crucial. This involves strategic investments in profitable sectors and pruning underperforming divisions, aiming to balance growth with wealth preservation. Such an approach nurtures a financial legacy and sustains an entrepreneurial spirit across generations, ensuring the continuous evolution of the family’s business ethos.

If a family no longer has an operating business, due to sale or other circumstances, the focus shifts significantly. Without the income and growth potential, families face the challenge of wealth preservation and the need for strategic management of income from diversified investments. In these instances, a tailored approach to asset management becomes imperative to maintain the family’s lifestyle and secure its future financial needs.

 

2. Lifestyle needs: balancing enjoyment and financial prudence

This category covers the liquidity needs essential for maintaining the family’s lifestyle, such as:

  • General living expenses, like maintenance, education, taxes, insurance, pension schemes, etc.
  • Costs related to assets acquired for personal use and enjoyment, like homes, vehicles, and assets which require intensive maintenance (e.g. collectibles)

Such elements call for careful financial planning and forecasting. A contingency fund is also crucial to effectively manage any unforeseen expenses.

For families with an international footprint, managing these assets involves additional complexities. Navigating different legal and tax systems across jurisdictions requires specialised expertise.

Owning properties and maintaining bank accounts in multiple countries offers diversification benefits, but also brings legal, compliance, and fiscal challenges (with zero tolerance for errors). Coordinating and aligning advice from various local experts into a cohesive international strategy isn’t easy, calling for sound judgement and central management.

Beyond liquidity management, aligning lifestyle expenses with the family’s broader financial strategy is essential. This ensures that costs do not undermine the family’s overall financial health. It’s particularly important to adapt lifestyle expenses to the fluctuating nature of income sources – whether derived from business profits, financial assets, or direct investments. Families must avoid relying on any single income stream, striving instead for a sustainable lifestyle that aligns with their income cycles.

As such, timely, accurate financial reporting tools are indispensable for regular reviews and strategic adjustments. Ultimately, they can create a robust financial framework with diversified income sources that enhance stability and resilience against economic uncertainties.

 

Investment assets: three categories for a balanced approach

Within our six categories, there are three different types of investment assets: direct investments, real assets, and financial assets.

Each category contributes uniquely to the overall balance and risk management of the portfolio. Without a holistic, unified strategy, formalised in an investment policy statement, wealth owners risk creating ‘magpie’ portfolios: a collection of appealing yet disparate investments, such as private equity and real estate. Such a scattergun approach can result in an uncoordinated mix of assets, lacking essentials like:

  • Sustainable income
  • A reserve fund for unexpected emergencies (‘rainy day fund’)
  • A designated fund for seizing promising investment opportunities (‘opportunity pot’)

It’s essential to examine how each investment interacts with and complements the others in the portfolio. Understanding this synergy between different asset categories is fundamental to crafting a balanced and cohesive wealth management strategy.

 

3. Direct investments: strategic engagement and wealth creation opportunities

Direct investments encompass private stakes in non-publicly traded entities – from startups to established businesses.

These investments typically offer higher risk-reward ratios, but call for in-depth understanding of the business’s operations and market potential. For families, or entrepreneurs who have sold their business, these investments represent not just financial ventures but opportunities for strategic involvement. Either through active participation with management, or through a passive, “hands-off” approach.

Such investments serve a variety of purposes:

  1. They diversify the family’s investment portfolio
  2. They act as potential sources for significant wealth creation and yield generation
  3. For entrepreneurial families, direct investments also provide a practical way to train individual members in how to lead a business. After all, the challenges of succession planning are well known. Engaging in direct, active investments offers a low-risk environment to train future family leaders or long-standing employees, allowing them to hone their skills in real-world scenarios

The investment process in this category can be intensive, starting with the identification and thorough evaluation of opportunities. This involves meticulous due diligence, demanding specialist valuation and legal expertise. Once an investment decision is made, families need support with facilitating and structuring transactions, managing assets, and ongoing administrative and cash management tasks.

We’ve observed a shift towards more collaboration in private equity investments sphere. Entrepreneurs, particularly those who have exited their primary business operations, are looking to invest more actively in familiar industries. They want to leverage both their capital and expertise, sourcing and selecting of opportunities alongside peers with similar objectives. This trend is particularly notable among entrepreneurs who aren’t ready to retire: they seek active involvement in new ventures as a means to continue applying their skills and experience.

So direct investments can offer families not only financial gains but also significant personal and professional development. Ideally, these investments will align closely with the family’s broader wealth creation, management strategies, and legacy aspirations.

 

4. Real assets: diversifying with tangible investments that have intrinsic value

Real assets include real estate, land, possibly infrastructure and energy assets, precious metals, fine wine, art, and collectible items such as classic cars and jewellery; collectible assets may also play a role in a family’s legacy, social life, and overall lifestyle.

Importantly, real assets typically have a low reliance on financial institutions. This makes them a solid choice for diversifying investment portfolios. Unlike unpredictable financial markets, real assets can provide stability and potential for wealth preservation and growth.

But selecting and managing real assets comes with unique challenges. While certain real estate sectors and collectibles may have experienced significant appreciation in value, this trend is not uniform. The value of real assets is subject to various factors including market demand, rarity, and condition. This variability necessitates expert guidance and comprehensive due diligence to mitigate investment risks.

Managing real assets requires substantial investment beyond the initial purchase. Costs include transaction fees, storage, maintenance, and insurance – all of which can significantly impact the overall return.

Furthermore, real assets typically offer lower liquidity compared to cash and securities, necessitating longer investment horizons. This lower liquidity means selling these assets can be lengthy, potentially affecting the timing and amounts of returns.

The challenges extend to cash management for both yielding and non-yielding real assets. Careful planning is crucial to ensure adequate liquidity for maintenance and other expenses, and to avoid excessive leverage. Prudent borrowing strategies are essential to maintain financial stability and align with the family’s broader financial strategy and long-term goals.

Additionally, managing real assets should be considered as part of the family’s broader financial strategy. This includes considering upkeep costs, the implications of related borrowing, and how these assets fit into the family’s overall wealth distribution, estate planning, and philanthropic activities. Investing in real assets should be part of a holistic approach, ensuring that they contribute meaningfully to the family’s financial objectives, and align with their values and long-term aspirations.

 

5. Financial assets: balancing liquidity, returns, and risk management

Financial assets encompass a range of investments, including publicly traded stocks, bonds, and other market securities. For some families, this also extends to novel financial instruments such as cryptocurrencies, digital assets, tokenized assets, and various decentralized financial products.

They are essential to maintain liquidity, and bring the potential for significant returns. But financial assets may be subject to significant market volatility, requiring a strategic approach to portfolio diversification that aligns with the family’s risk tolerance and investment objectives.

For effective management of financial assets, wealth owners benefit from a knowledgeable sparring partner. Such an advisor guides them through the initial design phase of their investment strategy, leading discussions on investment philosophy, risk tolerance, return objectives, time horizon, and liquidity needs. Only after this phase should a family begin to identify other partners to manage these investments, such as wealth managers, asset managers, banks, and hedge funds.

This sparring partner is also crucial in selecting strong investment providers, negotiating fees, and advising on the number of counterparties to engage with. While diversification is generally advisable, consolidation might sometimes be preferable to enhance scale, ensure operational efficiency, and better wealth oversight.

Ongoing management requires active monitoring and benchmarking of investment performance, alongside controlling costs and mitigating risks. It’s not just about selecting suitable investments, but also about establishing and implementing a comprehensive strategy. This strategy should ensure sufficient liquidity to meet a range of needs, covering both investment and entrepreneurial opportunities, as well as providing ‘sleep-well’ money for peace of mind. Additionally, the strategy should consider tax efficiency, effective risk management, and the alignment of the investment portfolio with the family’s overall financial goals and values.

 

6. Sharing and Impact: philanthropy and social investment

This category encapsulates philanthropy and social impact investments. These activities enable families to make meaningful contributions to society, aligning their charitable efforts with their core values.

But this area is not without its challenges. A key issue lies in balancing philanthropic aspirations and the family’s financial stability, ensuring that charitable activities are impactful, yet financially sustainable.

Philanthropy can take various forms. Traditionally, it has involved the use of conservative investment portfolios to fund charitable activities, focusing on the allocation of grants to various causes. However, recent trends indicate a shift towards more dynamic and entrepreneurial strategies. These approaches include social entrepreneurship and impact investing, which are not only about providing financial support, but also about engaging actively in ventures that target social and environmental change. This more proactive stance allows families to work closely with social enterprises and innovative projects, creating opportunities for sustained growth and development. By doing so, they can often achieve a tangible, measurable impact, driving progress in areas that traditional philanthropy might not reach.

An important decision for wealth owners is whether to establish their own charitable foundation or to support existing charities. Setting up a personal foundation is a significant commitment – in the strategy, organisation, recruitment, governance, and managing the foundation’s investments. It also requires identifying and evaluating projects for support.

On the other hand, contributing to existing charities can be more straightforward and efficient, involving the selection of suitable organisations (after thorough due diligence).

Whatever the approach, philanthropy provides a unique avenue for promoting family unity and shared interests. Unlike business ventures, charitable activities often allow for engagement of family members with diverse interests and skills, facilitating broader involvement. This engagement can be instrumental in strengthening family bonds and fostering a collective sense of purpose.

 

The Family Wealth Navigator: in practice

Let us now return to the Robinson family: our hypothetical case study designed to show a family can navigate the challenges of wealth.

In this scenario, we’ll focus on how the Family Wealth Navigator can help the Robinsons gain clarity, predictability, and strategy over their wealth.

The family wealth is built upon ‘Robinson Renewable Energies,’ a successful multinational business led by John and Emma Robinson. Beyond the business, their holdings are significant and varied, including a portfolio of residential properties, diversified investable assets, a notable contemporary art collection, and a commitment to philanthropic endeavours.

The Robinson family dynamic is as multifaceted as it is robust. There are three adult children, each with their own unique ambitions, and seven grandchildren. Michelle, the eldest, aspires to steer the family business toward new ventures and growth. Daniel, dedicated to academia and involvement in a start-up incubator, is interested in a strategic, possibly supervisory role in the family business to complement his other activities. The youngest, Sophie, devoted to her medical career and motherhood, seeks a share of the family’s wealth and income equal to that of her siblings.

The family is currently endeavouring to implement a new family constitution. This is about more than just wealth distribution; it involves integrating the family’s collective values and principles into a comprehensive plan for family maintenance, asset allocation and investment management. It is, ultimately, designed to resonate with current and future generations of the Robinson family.

 

Navigating the future of “Robinson Renewable Energies”: a legacy at a crossroads

At the forefront of solar energy, Robinson Renewable Energies has reached a critical juncture. Once, it operated in a niche market. Now, solar has evolved into a fiercely competitive field, driven by rapid advancements in photovoltaic technology and escalating production scales.

This changing landscape offers significant opportunities and daunting challenges for the Robinsons.

The industry’s shift towards more efficient, affordable solar has thrust Robinson Renewable Energies into a position where strategic innovation is not just an option but a necessity. Emerging technologies like battery storage and smart grid solutions beckon as promising horizons for expansion, aligning with the global momentum towards sustainable energy.

At the same time, the Robinsons face complex regulatory changes and shifting government policies in green energy, requiring a nimble and adaptive approach to both strategy and compliance. To do this requires further investment.

As such, the Robinsons are confronted with an essential decision – one that could transform their legacy. Their successful enterprise has garnered significant interest, attracting proposals for purchase or partnership from competitors, and private equity funds. John Robinson, recognizes the attraction for the potential of a substantial financial return, at the point when he feels ready to retire from the active leadership of the family business. It will, he believes, be a reward for decades of dedication and a chance to amplify the family’s diverse asset portfolio.

But the prospect of selling the company presents a profound dilemma. More than just a financial asset, it is an integral part of the family identity and a key element of their legacy, as enshrined in the Robinson family constitution. Selling the business would not only signify a loss of their entrepreneurial soul, but also represent a significant departure from the collective vision and decision outlined by the family in their constitution.

However, retaining the business and investing further into it involves its own complexities. The need for continuous innovation in the renewable energy sector demands significant business acumen and commitment as well as capital investment, particularly into cutting-edge areas. This route would mean retaining profits that have traditionally been distributed for lifestyle support and asset diversification.

The Robinsons’ longstanding principle against overleveraging, as enshrined in their family constitution, adds another layer to this intricate decision-making process. But foregoing additional investment might leave the business struggling to keep up in a vastly evolving industry.

Concurrently, the family’s wide-ranging investment portfolio, overseen by their trusted officer Nancy, faces its own capital requirements. Upcoming commitments to private equity ventures call for substantial liquidity, raising concerns about the potential impact on their overall financial health.

In addition, the Robinsons face substantial financial commitments for the renovation of their newly acquired mountain home, a project requiring significant investment.

Alongside, Daniel is engaged in securing second-round financing for a promising business venture in plant-based protein production. This venture, rapidly advancing and achieving cash flow positivity within just three years, is now poised for expansion. To realise its growth potential and capitalise on its early success, Daniel requires additional funding within the next six months.

 

Family governance and investment strategy: crafting collective decisions with the Family Wealth Navigator

The Robinson family’s decision-making process on these challenges is supported by the robust framework they have established. This framework is rooted in their family constitution and bolstered by the comprehensive overview of their assets, liabilities, and income streams provided by the Family Wealth Navigator.

Additionally, their investment policy statement offers strategic guidance, ensuring that their decision-making process is clear and efficient.

These principles and tools enhance the clarity and financial precision of their decisions. By asking a series of key questions, they are able to build consensus more quickly on the best course of action.

 

1. Upholding the family business

John and Emma acknowledge the business may be at its peak market value. Nearing the end of their professional journey, selling the business would be a rewarding culmination. And the liquidity from the sale would enhance an already robust and well-diversified liquid portfolio.

Such a decision could also simplify wealth transfer to the next generation. John and Emma have been concerned about the possibility of the business causing friction among their successors. They worried that dividing the shareholding among the three children could lead to diluted shareholdings and undermine leadership, resulting in a lack of clear strategic direction, especially during challenging times.

However, this concern was thoroughly addressed in recent family discussions, particularly during the family retreat. A unified consensus emerged: the business is an integral part of the Robinson family legacy and should be preserved under the collective stewardship of the family.

Moreover, the management team at Robinson Renewable Energies expressed support for this transition, committing to guiding the business for the next 5 to 10 years.

Buoyed by unanimous support and a shared family vision, John and Emma have resolved to maintain ownership of their business. They are prepared to reinvest the company’s profits in its forthcoming business cycle, prioritising transformative growth and innovation. This decision not only embodies a strategic business move but also reinforces their dedication to a core value outlined in their family constitution: the stewardship and perpetuation of the family business.

An important question follows: can the family financially sustain this decision, and is it a prudent and viable financial course of action?

 

2. Integrated, real-time digital tools within the Family Wealth Navigator

Nancy has transformed the family’s financial management through the integration of a sophisticated system that manages their entire investment portfolio.

This advanced digital platform brings together all liquid, illiquid, and alternative investments, allowing for detailed and tailored management of each asset class. It streamlines data consolidation, accounting, and controlling processes, providing a comprehensive 360° view of the family’s wealth.

Consequently, Nancy can precisely present all financial data at family meetings. This includes the up-to-date value and performance of each asset, as well as a clear picture of the family’s liquidity requirements and funding needs, meticulously categorised according to the Family Wealth Navigator.

This innovative system aids informed discussions about the family’s diverse financial aspects, guiding investment strategies and lifestyle decisions.

 

3. A diversified approach, tailored for the entire family

As a result of this careful planning, the family are in a comfortable position to make their pivotal decision: the re-investment cycle into Robinson Renewable Energies, the cornerstone of their wealth creation. This decision goes beyond finances – it is a testament to the family legacy and the blueprint for the future stewardship of their wealth.

The investable assets of the family, which include financial assets, real assets, and direct investments, are strategically balanced to cater to both growth and income requirements. The liquidity generated from their financial assets, when combined with the consistent income from their commercial real estate holdings, adequately covers the family’s lifestyle expenses.

This arrangement ensures a comfortable standard of living for the family. Additionally, the revenue stream is sufficient to manage the ongoing costs associated with maintaining their valuable art collection, seamlessly integrating asset management with lifestyle needs and asset preservation.

The financing of the family’s direct investments, comprising substantial minority stakes in various start-up ventures, is expertly managed by Nancy and the family office staff. These investments are funded through a dedicated ‘opportunity pot,’ a strategic reserve established several years ago.

This fund was designed not only to diversify the family’s corporate holdings but also to provide the necessary capital for specific investment opportunities. Importantly, it includes provision for Daniel’s involvement in the plant-based protein production business, ensuring that this venture receives the required financial support for its development and growth.

The family has diligently established ‘nest egg portfolios’ for each family member, built over many years. These portfolios are meticulously separated from the individual wealth of family members by being held in trusts, specifically designed to act as a financial safety net. These funds are not substantial enough to sustain the family’s current lifestyle indefinitely across generations, but provide John and Emma Robinson with the assurance of financial security throughout their lifetimes. Additionally, they are structured to endow the younger generation with a robust financial foundation, supporting their personal life ventures and future endeavours.

 

Reflecting on the path forward

As we conclude our examination of the Robinson family’s journey with the Family Wealth Navigator, it’s clear how dynamic investment management and strategic planning can build resilience and prosperity across the generations.

The Robinsons’ experience illustrates the critical importance of integrating financial insight with family values. By doing so, they’re better equipped to navigate complex decisions and unforeseen challenges.

In our next articles, we’ll delve into the nuances of family governance and succession planning. We will explore how robust governance structures and thoughtful succession strategies secure financial stability. And, at the same time, support the transfer of leadership and ownership to create a lasting, flourishing legacy.