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Why financial education matters

family office general succession planning Sep 13, 2021

Unless you are a banker, you will not normally have been taught techniques for structuring your own wealth. This is never part of the curriculum at any school or university. If you have earned or are about to inherit a significant amount of wealth, many advisers, banks and wealth managers will be wooing or even chasing you with investment products and services.

Some principles are important for you to consider when interacting with the industry:

  • Independent advisers of all kind are great and will be able to assist you a lot, but only if they are truly independent and if instruct them according to your individual requirements. Without some basic understanding of the financial space, it will be almost impossible to pick the good ones.
  • You can delegate most of the financial work, if you have advisers that you can fully trust and rely on. But ultimately, wealth will always remain your responsibility and final decisions cannot be delegated away – so you cannot escape from dealing with your wealth anyway!
  • Always look at your wealth with a holistic view: take into account all the assets you own – your company value, your private wealth, but also human capital, social capital and family value. It is not easy to put numbers to these additional dimensions of wealth, that is why BeeWyzer has developed intuitive formulas how to tackle them. Because in the turmoil of life, these dimensions can be protective or detrimental to wealth – that is why they are so important.

So, in a nutshell, unless you want to rely completely on others, you need to have a basic understanding of different asset classes from listed equity and debt with simple derivatives to real estate or private equity investments. Some basic understanding of the economy and relevant markets as well as the business models in the financial services industry will help you avoid being fooled. The necessary level of know how can be reached within a limited time span with the BeeWyzer training based on videos, worksheets and tools. The tools can be directly applied to your situation without becoming a financial maths nerd.

But there is more to wealth than just facts and figures, especially when families emotional and structural issues kick in:

  • For example, larger families should ideally have some kind of family governance in place in order to have an orderly framework for dealing with wealth and succession.
  • As part of the governance framework, it definitely makes sense to establish a family investment policy in order to avoid never-ending discussions.
  • Setting up regular family gatherings and a family council to simplify the decision- making process within the family are also helpful measures.
  • Regarding wealth management within the family network, it may or may not be a good idea to set up your own family. You may also work with a Multi-Family Office or any other key adviser from the industry - or you may run a virtual family office.

No matter from what angle you look at wealth: financial education is the basis for everything. It allows you to base trust on understanding, replace chaos with processes and combine financial return for your capital with sustainable impact. After all, it took you or your ancestors a lot of time to create wealth – so it is just a responsible move to secure the basic training needed to organize it well – and keep it!


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