Wealth Management for the first generation

First Generation Wealth in Perth and across Australia is a growing phenomenon, with individuals and families achieving significant financial success within a single generation.  This self-made wealth often comes with its own set of unique opportunities and challenges, including managing and preserving wealth, the sense of purpose in our lives once we have the wealth, and finally navigating the complexities of passing on a legacy to the next generation. Gary Hasler discusses some of the issues around Wealth Advice and the consideration of managing first generation family money.

We have all heard about the “shirt sleeves to shirt sleeves” in 3 generations stories where the grandparents build the business, the kids live well off the spoils of the work and then the grandkids run it into the ground. This is not true with all family business – however quite often there is some truth in this within all family’s wealth.

Through our experience we have found there to be 3 key building blocks in successfully navigating and planning through the first generation

Wealth Management

One of the critical aspects of first-generation wealth is wealth management. Unlike inherited wealth, which may come with a team of financial advisors and a long history of established wealth management practices, first generation wealth often requires individuals to learn and develop financial literacy and strategic planning skills. Managing wealth involves making informed decisions about investments, taxes, estate planning, and risk management, among others. It is essential to create a comprehensive family financial plan that aligns with long-term goals, including wealth preservation, wealth growth, responsible investing, and in some cases philanthropic initiatives.

Having clarity through the Boutique Advisers “Advice Map” and having a team of trusted advisors around you can be crucial in effectively managing first generation wealth and ensuring its sustainability for future generations.

Sense of Purpose

We have heard from many families around the building of Wealth being a 30 year “overnight success”, in other words it took several years of learning and working hard to be able to set themselves up for success. This sometimes meant there were failures along the way until lessons were learned and success followed. The fortunate aspect of this is that it is easier for the first generation who built the wealth to remain grounded, with the challenge then being once the wealth has been generated, around the family’s sense of purpose once the goal has been reached. In a time where Goals have been reached, money is now not an issue are we and our families happier?

Understanding Purpose is a cornerstone to Boutique Advisers “5 Pillars Client Journey” – “Purpose is our connector between achieving one’s goals and then planning your family legacy”.

Legacy Planning

Passing on a legacy is another significant consideration for those who have achieved first generation wealth. Many individuals who have created wealth from scratch have a strong desire to leave a lasting impact on their family, community, and society. They want to pass on not only their wealth but also their values, beliefs, and vision for the future and involving family members in the process and educating them about responsible wealth management can help prepare them for the responsibilities that come with inheriting wealth and continuing the family legacy. We have found that it is important to strike a balance between providing financial support and instilling a sense of financial responsibility. Some concerns may include issues such as entitlement, lack of financial literacy, and potential conflicts among family members.

In our experience upon the right age having open and transparent communication, setting clear expectations, and providing education and guidance can help address these challenges and ensure a smooth transfer of wealth to the next generation.

Contact Gary Hasler or the Boutique Adviser team on 08 9381 8779 for a further discussion on this topic.

Gary Hasler is the Managing Director of Boutique Advisers and works with highly successful individuals and families, providing strategic financial advice. Gary specialises in working with generational family businesses, executives and family office clients as well as high level professional athletes. Gary is passionate about working with Boutique clients in a collaborative way, providing clarity and confidence, and helping them navigate their financial life.