Harmonising financial stewardship and legacy planning
Learn how the synergy of our Family Wealth Navigator and Purpose of
Wealth Model can provide families with a comprehensive, actionable wealth plan
Navigating the complexities of wealth planning requires a balance of strategic recommendations and tangible impact. In our previous article, we introduced the Purpose of Wealth Model: a practical tool that encodes assets with specific planning goals.
In this article, we’ll explore how wealth owners can combine the Purpose of Wealth Model with our Family Wealth Navigator, aligning their personal values and planning objectives with financial prosperity and responsible stewardship.
At the end of this article, we’ll share a case study to show our model in action. Before then, it’s important to note that mastering these models demands far less effort than that required to forge and maintain a legacy over years and generations. Whether a seasoned professional or a newcomer, applying these theories to real-world wealth planning may be an important step toward safeguarding a legacy. Such a step offers significant rewards for personal and family aspirations by enabling the strategic creation of legal structures that reflect long-term planning goals.
Two tools, working together

Let’s unpack how the Purpose of Wealth Model differs from the Family Wealth Navigator. The latter is focused on financial considerations, the former is more concerned with how to build and maintain a legacy.
The Purpose of Wealth Model explores strategic asset utilization to achieve specific planning goals, integrating these assets into a comprehensive planning process. It ensures the selection and drafting of suitable planning instruments, and of the respective governance, for each asset in alignment not only with financial interests but also with the family’s legacy aspirations.
In contrast, the Family Wealth Navigator primarily addresses the economic aspects of wealth. It views the family’s collective assets as a cohesive financial entity, aligning business operations, investments, and expenditures with the family’s overarching values.
It provides a dynamic overview of the family’s holdings and income sources, aiding in prosperity, diversification, and wealth preservation. It extends beyond financial management, enhancing family dynamics through transparency and understanding.
To illustrate the differences, consider the ‘Lifestyle’ category in both models.
In the Wealth Navigator, this category encompasses living expenses and costs associated with personal enjoyment assets – including maintenance, education, and taxes.
In the Purpose of Wealth Model, the ‘Lifestyle’ category defines the specific lifestyle goals for current and future family members. It outlines the availability of benefits at different life stages, including liquidity and physical assets for personal use, thus providing a more detailed framework.
These models complement each other in practice:
The Purpose of Wealth Model allows wealth owners to define how their values translate into legal and succession planning instruments, setting boundaries and incentives for generations.
The Wealth Navigator assesses the feasibility of these goals financially, ensuring sustainability and alignment with the family’s evolving needs.
By understanding the distinct yet complementary roles of these models, families have the tools to align their wealth with their broader vision, achieving a balance between immediate financial management and long-term legacy planning.
The Purpose of Wealth Model: in practice
Let us return to the Robinsons, our hypothetical case study navigating the complexities of wealth and legacy planning.
The family is led by John and Emma, keen on ensuring the continuity of their business while upholding their deep-rooted values. Their three adult children bring distinct ambitions to the table: Michelle aspires to lead the family business into new ventures, Daniel seeks to balance an academic career with a strategic role in the business and his engagement with various start-up incubators, while Sophie, dedicated to her medical career and motherhood, desires an equal share in the family business for herself too.
Establishing a trust for the family business: guided by the Wealth Navigator and the Purpose of Wealth Model
The last time we visited the Robinsons, we witnessed the family’s use of the Family Wealth Navigator. This tool provided an in-depth and accurate financial overview, essential for the planning, management, and future projection of their wealth, forming the basis of a strategy for their significant portfolio of assets.
Now, let’s observe how the family can use the Family Wealth Navigator and Purpose of Wealth Model to create algorithms that serve as bases to transform their business, and some of their financial assets, into long-term legacy asset.
The insights gleaned from the Wealth Navigator helped guide the family’s decision to reinvest in Robinson Renewable Energies, their flagship enterprise in the dynamic solar energy industry. This decision reaffirmed the family’s commitment to the long-term stewardship of this core legacy asset. This approach aligns seamlessly with their aspirations to grow and enhance the business, as articulated in their newly adopted family constitution.
Furthermore, the Wealth Navigator was instrumental in refining the family’s approach to both business continuity and governance within Robinson Renewable Energies.
By providing a clear picture of their financial position and potential, the Robinsons were able to allocate resources effectively for the enterprise’s next stage of growth.
This clarity also aided the development of structured strategies for managing roles within the business. And established a transparent framework for dividend distribution, employment terms, and overarching business governance, involving both family and non-family members.
Trustee shareholding and a dual system for sharing business revenues
A key development was the decision to transfer business shares into a trust. This move was crucial for several key reasons:
- It ensures the long-term continuity of the business
- It mitigates potential risks associated with direct share ownership by family members, in the case of divorce or succession
- It fosters equitable financial distribution and an independent, open platform that enables the family to create competitive opportunities for current and future generations to engage in the business. This engagement is based on personal capabilities and interests, rather than being determined by individual shareholdings.
By doing so, the trust reflects the family’s commitment to ownership continuity, while balancing the interests and protecting individual members, and ensuring the stability and longevity of their core legacy asset.
Furthermore, it implements a dual system for compensation. It provides a performance-related financial reward system for members actively engaged in the business, offering market-standard salaries, bonuses, and director fees, complemented by a long-term incentive scheme that rewards business growth contributions. This approach aims to encourage and acknowledge direct entrepreneurship and commitment.
Conversely, the family has introduced a ‘democratic component’ to maintain fairness among all family members. This facet is embedded in the dividend distribution policy of the trust holding the business shares, where trustees distribute dividends equally among all beneficiaries – initially to John and Emma Robinson, and subsequently, equally among their children post their demise.
This method ensures all members share in the success of Robinson Renewable Energies across generations, regardless of their level of direct involvement, fostering a sense of collective prosperity and respect for each family member’s diverse contributions and paths.
Advisors committee and checks and balances: Navigating “strict code versus flexibility”
Another crucial element of the trust’s governance established by the Robinsons is the formation of an advisory committee. This body, consisting of family branch representatives and bolstered by independent professionals, concentrates on mentoring younger generations. Qualification criteria for people elected to the advisory committee, plus clear rules on the process of appointment of members and their voting provide the necessary governance and continuity.
Crucially, the committee also addresses the balance between ‘strict code versus flexibility’ within the trust holding Robinson Renewable Energies shares. John and Emma Robinson, while determined to steward the business through generations, acknowledged the need for structural flexibility to adapt to significant changes in the business or family circumstances, such as potential sales, mergers, or major transactions.
Recognizing that their practice of profit allocation – retaining 50% for reinvestment, 25% for asset diversification, and 25% as personal income – might need modification, John and Emma embedded specific provisions in the trust’s statutory documents. These allowed for adaptability in handling business shares, significant transactions, and profit allocation, subject to the trust’s advisory committee’s approval. In case of disagreement, an escalation mechanism required the consent of the protector.
In essence, this approach safeguards the business’s future, and provides fair and equal opportunities for all family members.
Formalising a ‘Family Bank’: fostering entrepreneurship through the Purpose of Wealth Model
The Robinsons identified the need for a more formal approach to encourage entrepreneurship among its members.
Reflecting on the success of Daniel’s plant-based protein start-up, which benefited from a loan from their general ‘Opportunity Pot’, they decided to establish a dedicated family fund with a clear strategy and clear terms to provide access to opportunities for business ventures outside the core family business.
The ‘Family Bank’ is designed to empower family members with financial support, usually coupled with equity participation, ensuring the entire family to benefit from the success of these ventures. This approach fosters innovation and shared prosperity, while maintaining the integrity of the family’s core business and overall wealth portfolio.
The ‘Family Bank’ also serves as a mentoring platform, particularly timely with some of John and Emma Robinson’s grandchildren starting their professional careers. It provides guidance and leverages the family’s collective experience to nurture individual entrepreneurial initiatives, whilst potentially contributing to the diversification of the family’s business interests and strengthening their collective identity across generations.
The ‘Family Bank’ functions not only as a financial support system, but as an attractive educational resource. It establishes a culture of discipline and learning across all generations involved in the fund. While it focuses on teaching younger family members about responsible investment, business management, and innovation, it also facilitates a cross-fertilization of ideas. The younger members contribute fresh perspectives and new insights, stimulating dialogue and aligning the entire family on the values of investing and on business practices, fostering financial prudence alongside a progressive entrepreneurial mindset.
Charting the legacy path: John and Emma Robinson’s milestone achievement
This marks a profound milestone in the Robinsons’ legacy. Challenging sensitive issues such as deep self-reflection and family dynamics has brought significant relief and a sense of accomplishment. Their comprehensive approach, as guided by the Conduct Formula, involved not only meticulous wealth planning, but also nurturing relationships essential for carrying their legacy forward. This includes both family members and third parties like employees and advisors, all integral to the Robinsons’ vision.
They have navigated the complexities of various family viewpoints and aspirations, successfully striking a balance that ensures the flourishing of the business and its stakeholders. Their dedication to involving and harmonising the younger generations with the family’s legacy has been a particularly notable task.
With the business’s future structured and a family constitution in place, the Robinsons are equipped with a strong and versatile foundation for their future. This legacy transcends mere wealth; it embodies the values, aspirations, and unity that define their family.
As they look ahead, the Robinsons recognize the need to address their other significant assets, including family homes, art collection, and liquid assets. To mitigate the risk of a ‘planning accident’ — an unforeseen event like a sudden death that could disrupt their meticulously laid plans — they have taken an interim step by drafting a simple will. This ensures that all directly owned assets pass to the surviving spouse, safeguarding their estate against unexpected contingencies.
These proactive measures, combined with the significant strides made in structuring their business, lay a robust foundation for their future planning endeavours. The Robinsons’ comprehensive approach not only ensures the well-being of their family but also sets a clear blueprint for managing their diverse assets.
This journey has provided them with peace of mind, affirming that their legacy resonates with their deepest values and aspirations.
Now, having achieved this crucial milestone, the Robinsons must address the broader organisational structure of their family — with a focus on their family governance model. This aspect, which we will explore in a future issue, is key to fortifying their legacy. It represents the next chapter in their endeavour to ensure strategic family coordination and unity, further strengthening and perpetuating their thoughtfully crafted legacy.
Before this, we will take a closer look at how trusts – a key wealth planning instrument – can help safeguard wealth and relationships.