How women are managing family wealth

This article features in Issue One of our Private Wealth Perspectives Newsletter.

Explore the Private Wealth Perspectives Newsletter for more updates.

With an increasing number of women managing the family wealth or founding businesses, we are consciously evaluating the support required to cater for our clients' needs holistically for today and tomorrow, as wealth is created, preserved and transitioned to the next generation.

According to Boston Consulting Group, women now control over a third of the world's wealth. This echoes our experience at Mourant in recent years, where our Private Wealth team have seen an increase in ultra high net worth (UHNW) women becoming involved in the decision-making around managing the family wealth, including the transfer of wealth to the next generation.

As professional advisors, we continue to adopt and adapt to support clients on their wealth journey. By having a robust network of trusted advisors working together collaboratively, we seamlessly provide support to help families and family offices and their advisors to realise their ambitions in a tailored way which works for them aligned to their family's values.

What is key is to have a clarity of purpose, passion and commitment backed up by the right education in finance and business and an appetite for entrepreneurship and leadership. Also important is to recognise the influence of environmental, social, and governance (ESG), particularly in creating a social impact, and providing clients with the right enabling technologies. It is this knowledge and tools that give clients the confidence empowerment to make the right decisions.

We have drawn together below a sample of key takeaways and insights based on our experience with families and their professional advisors, which we hope you will find useful in determining the best structure. 

• The surviving spouse, who is most often the wife, is often overlooked in succession and wealth planning. There may be tax efficient reason to gift assets to a surviving spouse following the first death and it's important to consider how each half of a couple look to benefit their families and when they would choose to do so. The original generator of wealth may look to hold onto the money and only transfer it on their death, while their spouse may look to pass on money during their lifetime and see the fruits of that transfer benefit their children during their own lifetime. This can impact how a structure works and affects the planning involved.
• Women holding wealth are a growing sector of the market. How they interact with the principal's advisors can impact how a carefully thought-out succession plan may be impacted on that principal passing away.
• ESG means different things to different people and 'governance' should never be overlooked, even if there are currently no issues. How the next generation interact with each other and their ability to work together can result in either success or failure to any planning. It is often one key individual that draws a family together and unifies them so while governance should evolve and adapt, it should be carefully considered how decisions are made and how the 'family ethics' can be upheld once that person may no longer be around to guide the family.
• In the early generations of wealth generation problems may not arise or even be something the family can envisage happening as they are all striving for a shared goal. Consider that in two generations there may be some family members working in the business while others are not involved in future wealth generation and the tension this can create. It is our job, as experienced legal advisors, to advise on practical governance strategies and to assess the stress points that we have seen in practice and that we may anticipate in the family in the coming generations. Those stress factors and the individual family dynamics may impact the details of the structure being put in place to benefit future generations of the family. Be open to considering the need to stress test and future proof your structures as they will be there for generations to come. 
• Corporate structures for private clients with global families can be really useful as every country knows how to tax a corporate structure and the compliance and administration costs can be lower as a result.
• Mirroring structures at home and abroad, with independent advisors for each, can be a good way to provide for your family in accordance with your family's beliefs while also allowing for some flexibility.

Considering the above insights, it is important to be flexible in the way in which we are inclusive to ensure everyone's needs are catered for including female family business leaders, entrepreneurs and the next generation. Through collaboration, education and supporting each other through a trusted advisor network, we can help realise the ambitions and wealth objectives of women within the family business.