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Legacy Family Office (GTLFO)
GT Legacy Family Office assists families to create an enduring succession plan
Succession planning can be a difficult task in a family owned business and yet critical for the continuity of the business. There are many complex considerations that need to be addressed to ensure the smooth transition of a family business. The key consideration is to have a structural solution which not only supports the needs of the business but also that of the family.
When succession planning is poorly handled the fortunes of a family-controlled listed companies can dwindle. Global statistics confirm that succession planning is a difficult problem facing many family-owned businesses. Research found that only 30% of family business survive the transition from the first to the second generation and only 10% made it to the third generation. Studies on succession planning have consistently shown that succession is the most important issue faced by family business owners and only 33% have a robust succession planning in place.
However, many family business succession planning focus primarily on wealth planning and the legal transfer of assets, but ignore the critical intangible factors such as family values and traditions, cross generational relationships and the transfer of family knowledge.
Hence, GTLFO aims to fill this gap by adopting an all-encompassing approach to family legacy through the proprietary Five-Dimension Model. Our qualified Family Legacy Planners have a wealth of legacy planning knowledge and expertise to assist business owners to have a proper business succession planning in place.
Family Enterprise Succession
It is not easy for an enterprise to prosper for over a hundred years. If the enterprise does not have an established vision, a well-defined mission and a set of core corporate values, it will be difficult to set a common goal for employees to follow.
Hence, family enterprise succession involves the following:
- Strategic plan for family wealth and/or enterprise developments
- Active, diverse, empowered board guiding each enterprise
- Employment policies for family members working in the family enterprise
Family Value Consensus
Personal values and successful experiences are invariably ingrained in the inner self of most successful entrepreneurs. Accomplished entrepreneurs may owe their successes to loyalty in friendship, integrity in dealings or special business acumen. However, these genes may not be able to pass on to the next generation. If a family lacks the resolve to seek consensus on these important values, it will impede the family development that leads to an end to the long lasting business.
As such, family value consensus consists of having:
- Clear, determined family goals and direction
- Consensus about family assets and wealth
- Freedom in seeking personal fulfilment
Family Relationship Sustainability
If family values are going to be passed on to future generations, a sustainable family relationship is definitely crucial. Family members have varied experiences and different values. If there is a lack of good communication between family members, they will not be able to deal appropriately with the conflicts that result from diverse opinions.
A strong family relationship sustainability includes:
- Regular family gatherings and frequent interactions between members
- Trust and communication
- Sharing and respect for family history and legacy
Family Knowledge Transformation
Training the successor of a family enterprise is the key to transferring family knowledge. The education and training require a detailed 5 to 10 years planning process, which includes understanding the strengths, weaknesses, interests and career goals of the next generation.
Some points to consider are:
- Transparency about financial information and business decisions
- Support for development of the next generation’s leadership
- Age-appropriate financial education for the younger family members
Family Wealth Management
Entrepreneurs are good at creating wealth, but the key factors in family enterprise succession are maintaining and passing on wealth to the successive generations, especially in the interest of the security of the bequeathal assets.
Therefore, family wealth management is about:
- Shared family philanthropic and community service
- Exit and distribution policies for individual shareholder’s equity
- Explicit and shared shareholder agreements regarding family assets