When the Duke of Westminster died earlier this week, much attention was focused on his only son, 25 year-old Hugh Grosvenor, who has inherited his vast estate which is worth £9 billion (although most of it is long held property and in trusts which he can’t access). It’s a heavy responsibility.
Many parents would be concerned about their offspring inheriting such wealth at a young age for fear of them mismanaging assets, taking ill-informed decisions and worse still, going off the rails.
As financial advisers, you will be used to explaining to parents that their children need to know more about money than merely spending it. They’ll hopefully want to ensure that their offspring are financially literate, and aware of how to best invest and manage their money. It’s not just the especially rich who need to be savvy about the responsibilities that come with inheriting wealth, particularly if they are set to take over a family business.
Some financial institutions run seminars a couple of times a year for the children of wealthy parents to help them understand these points. For example, HSBC Private Bank offers a programme aimed at teaching the next generation “financial planning and investing, philanthropy, the dynamics of shared family wealth and longer-term issues including wealth preservation”.
Hambros, on the other hand, offer children the opportunity to come into the office and participate in internships with the institution, which gives them valuable experience in working within an office and sitting with the investment managers.
Financial literacy is a key life skill. When discussing saving for children, estate planning and more complex inheritance arrangements, the recipients of family wealth need to be clear about their position and how to manage their affairs. This could be a good time to consider what your firm could offer their clients by way of extra help.