More than wealthJune 28 2019

The Emotional Journey that is Inextricably Linked to the Wealth Journey of UHNW Families

3 mins read

James Fleming

Chief Executive

“It’s important to take into account that human behaviour, rather than financial performance, is by far the most important factor in successful wealth transfer” – James Fleming, Chief Executive of Sandaire

A family business, in most cases, is entwined to the core of the emotional, logistical and functional aspects of a family dynamic and this is unsurprising. For many, a family business not only represents the source of a family’s wealth but also can encompass the heritage, values and spirit of ancestors, as well as providing a common purpose for the current generation and a reason to stay united.

Given the above, it is natural that for family businesses there are many emotional elements of their wealth journey, a significant one being the sale of said business, which at Sandaire our founding family has a great deal of experience dealing with.

James Fleming, Chief Executive of Sandaire, joined a year ago and speaks highly of the story of Sandaire’s founding family: “The history of Sandaire is fascinating, it is an example of a family moving into a major liquidity event. Alex Scott was faced with a huge burden of responsibility. After four generations, the family business was sold and the family faced new challenges, exploring new opportunities.

Alex considered many options and finally decided to collaborate with other families in similar situations, thus the first multi-family office in the UK was born, in the form of Sandaire.”

When selling a family business, many families go through a ‘bereavement’ process where they have a sudden and significant cash influx but no longer have the family business that bound them together with a strong and unifying common purpose.

Every family is comprised of its own special ecosystem made up of a group of individuals who are alike in some ways, perhaps sharing common family values, but then equally different in others. They, as individuals and as a family entity, are continually growing, evolving, and shifting their needs and priorities. As such, it’s incredibly important to provide delicate guidance and careful stewardship to help families navigate the sale of a family business.

Having an intricate knowledge of this emotional wealth journey is crucial in order to effectively serve families, and also understand the soft factors and emotions inextricably linked with this. It is important for a family office to take many forms and shift depending on the needs of each specific family in this instance – whether that’s as a leader, a partner, a facilitator, or a mediator.

James Fleming acknowledges the importance of understanding the emotive side of these events: “We can’t lose sight of emotion, as naturally, it is ever present in a family office business. You have to be well versed in dealing with delicate personal matters.”

We tell the story of our founding family to show that the journey can be navigated successfully, as the Scott family moved carefully through this major liquidity event and managed to still maintain their family connection and ethos through successive generations. From the sale of their family business, the Scott family created and developed a new business that bound them together.

Philip Marcovici, renowned tax advisor and author of many books including ‘the destructive power of family wealth’ recently joined Alex Scott in contributing to Tom McCullough and Keith Whitaker’s new book titled, ‘Wealth of Wisdom – 50 questions that wealthy families ask’, in which Alex addressed the above through the question of ‘Can a family stay together after the operating business is sold?’.

In the book, Philip addresses the importance of third party advisers and also the difficulty in finding advisers that a family can truly trust, who understand the needs of the client and act in their best interests at all times. “An effective advisor is one who has the interests of their clients at the forefront, and positions themselves as a true trusted advisor.”

Through the first-hand experience of our Founder, the expertise of our Independent Chairman, Chief Executive and the team of trusted Relationship Advisors, Sandaire still operates for our clients in the way that the Scott family wanted to be treated themselves when they faced selling their business along the path of their wealth journey.

As published in Family Office Magazine Winter Issue 2018, pages 55 and 56.