30 Nov 2024

Thinking: Anthropology and the Land of Wealth

In his excellent work, “Strangers in Paradise”, James Grubman describes a family coming into wealth as being almost like an emigration to a new country. He describes in terms like those of an anthropologist, how you often have a pioneer generation, who move the family there. Sometimes, an immigrant generation who may have started outside the land of wealth, but then become integrated within it, and eventually, with prudence and care, future generations may be born there as natives. You also often have marriages between natives and immigrants, each with their own heritage and seeking a blend of norms for their new family unit. Crucially, unlike countries, citizenship here is not guaranteed, and every generation must take care to avoid being expelled from their land of wealth.

In the developed world today, there is a significant potential shift of wealth across generations set to take place in the coming years, as baby boomers, perhaps the wealthiest generation ever to have lived (often with final salary pensions that have since closed, and once able to purchase homes at reasonable multiples of their salaries), are gradually passing on either voluntarily or involuntarily, their worldly goods to others (without planning, more and more of them are giving an increasing chunk to the taxman – with HMRC receipts from IHT increasing by 16.6% year on year).

Each generation comes with a different perspective on so many things – and just as a first-generation immigrant who grew up on distant shores, may struggle to identify with children and grandchildren who consider themselves natives to the language and customs they’re surrounded by and take for granted, so every generation of parents will continually ask themselves whether their descendants fully comprehend the sacrifices that they made in their own lives to help their loved ones along.

One of the key differentiators identified among successful families is in the ability to communicate effectively, and to develop a shared family culture and set of values – including around money, hard work, and gratitude for the blessings they have. Money can easily be a taboo subject, and one of my roles as a financial planner can be to act as a facilitator and interlocutor in conversations between different generations – to help them collaborate, and agree on shared goals and an ethos that can inform succession strategies.

If you know someone who is having trouble finding the words, or a way to start these all-important conversations between parents and children, and even grandchildren, then please send them this newsletter and I would be happy to have a free introductory call with them to discuss their situation.

**Full disclosure: I’ve lived some of these conversations personally and I know they’re delicate, and sometimes thorny ground, but crucial to family well-being.

The content of this article is for information purposes only and does not constitute advice. It is not an offer to purchase or sell any particular asset and it does not contain all the information which an investor may require in order to make an investment decision. Please seek professional advice before entering into any financial arrangement.