According to BNP Paribas’ 2021 Global Entrepreneur & Family Report, the COVID-19 crisis prompted 32 per cent of 920 elite entrepreneurs and multi-generational families to “pass on more wealth than originally intended to the next generation”. The report also found that 54 per cent of the elite entrepreneurs interviewed are modifying their retirement plans following the crisis.
In addition, the first year of wealth decline since the global financial crisis in 2008 was noted in 2022, which reportedly amounted to a USD 11.3 trillion decline, reflecting a 2.4 per cent drop. However, according to Credit Suisse and UBS’s Global Wealth Report 2023, an upswing is expected over the next five years. Global wealth is forecasted to rise by 38 per cent, with the growth of middle-income countries as the primary driver. It is estimated that the number of ultra-high-net-worth individuals (UHNWIs) will rise to 372,000 by 2027.
Given these circumstances, services in the private wealth management and governance sectors have become even more relevant.
The essence of private wealth management
HNWIs and UHNWIs seek the assistance and guidance of professionals through private wealth management solutions. Private wealth services involve numerous components with varying functions.
Here are some of the ways private wealth management can benefit private clients:
- Personalised approach in securing private wealth. The wide range of services involved in private wealth management ensures that a client’s unique needs are considered to create a personalised approach to managing private wealth.
- Expert guidance. Private wealth management also lifts the burden of numerous financial decisions. Private wealth service providers understand a client’s financial position and risk appetite and assess complex aspects involved in managing their wealth.
- A clear path to financial and personal goals. Private wealth services cover both short- and long-term financial goals. With the professional assistance of a private wealth solutions provider, a client’s risk tolerance and life stages will be considered, and goals can be evaluated, prioritised and quantified. In addition, private wealth solutions providers can evaluate any unforeseen events (e.g., medical emergencies, regulatory changes, etc.).
- Ongoing support. Changing needs and circumstances call for continuous expertise from professionals. Should a client’s goal change or significant developments concerning their portfolio occur, private wealth teams can assist a client to amend and adjust accordingly.
Governance solutions for private wealth
One of the critical aspects of private wealth is governance; in general, governance addresses compliance and regulatory concerns by using protocols and systems to secure the sustainability of an organisation (or other structures). For instance, governance in family offices facilitates the continuity of family wealth into succeeding generations.
Incorporating governance strategies in wealth management addresses several governance areas and issues. Here are some of the aspects to address in a family office with the use of governance strategies, patterned after Bolder Group’s governance solutions:
- Family councils;
- Shareholders structure;
- Board structures;
- Retirement; and
- Family members not employed by the company.
An effective foundation and implementation of governance solutions in managing private wealth enables:
- Representation of the family’s interests in the operations and management of the business (through family councils);
- Designing protocols for business succession to secure private wealth sustainability;
- Promotion of transparency across the pipeline and for all parties involved in the management of private wealth;
- Creation and adaptation of a framework in decision-making and communication to establish coherent standards;
- Development of a conflict management policy to have a straightforward procedure for resolving disputes;
- Management of risks associated with business and market volatility;
- Clarity on the roles of different parties (e.g., family and non-family members) in terms of their responsibilities and scope of control in the organisation, and so on.
Apart from governance strategies, estate planning is another fundamental aspect of private wealth management. Read about estate planning and the various components of drafting an estate plan in this blog.
Preserving your legacy with Bolder Group
Bolder Group is a private wealth service provider present in 18 countries worldwide.
Our team understands that private wealth management is not a one-size-fits-all model; this is why we provide bespoke governance and private wealth services, empowering our clients to protect their wealth and preserve their legacy. Our governance solutions for private wealth are tailored to address the complexities involved in family businesses.
Reach out to a Bolder representative now to discuss your private wealth needs.