Good planning, communication and being open about the line of succession are key to avoiding the legacy issues faced by the Roy's media empire in HBO’s series Succession.
Chronicling the battles that underpin the endowment of the Roy media empire, HBO phenomenon Succession is a brilliantly tense examination of legacy planning gone awry. As siblings Kendall, Roman and Shiv jostle to be anointed leader of their father’s Waystar-Royco conglomerate, egos and allegiances are dissected in a sharply scripted portrait of venomous in-fighting and shifty psychological conflict, tightly wound in a seemingly zero-sum game.
Of course, the dramatic imaginings of showrunners Jesse Armstrong and Mark Mylod are far from aspirational. There are certainly truths here, but in this mismanaged accession, they’re deterrents, carefully crafted for the sake of art and entertainment. In the wake of the series’ explosive finale, we elected to offer a more grounded take.
Before we begin, it should be noted that not all families want or require succession. Some may prefer non-family members to take the reins of company or office stewardship, allowing the family to shift to the role of governing owners. Others may decide against comprehensive transfer of assets to children and grandchildren. Some might choose to donate most of their money to philanthropic endeavours, whereas others may pass ownership to their employees or a nominated foundation – much like Yvon Chouinard at Patagonia.
For those keen on keeping some or most of their wealth familial, the Roy’s cautionary tale begs the question: what does a ‘good succession’ look like? Many of our clients define ‘success’ as the preservation of their financial assets, built to serve the goals defined by the family. They want individuals to thrive, for family relationships to be healthy and to support causes and communities they care about. Amidst the riot of emotions present in any household, what could a family do to accomplish such goals?
Family wealth planning: Solid foundations
Recently, I was talking to a partner of a leading private equity firm. Together with her husband, they were contemplating the future of their financial assets.
Speaking frankly, they discussed a desire to treat their children equally when it comes to money.
Outlining the intricacies involved in ‘fairness,’ I offered my two cents. Put simply, it’s hard for entirely equivalent sums to be spent on each child. When needs and choices are varied, solutions tend to be more personalized, and consequently, outcomes become naturally uneven.
Career choices dictate earning potential. Personalities necessitate different approaches, as do health needs. In order to effectively manage this variance, successful families stress the importance of value, love and collaboration. It’s vital that each child feel accepted for who and what they are. Perhaps more crucially, brothers and sisters should be encouraged to work together, as this strengthens the bedrock for future dealings.
“I see,” my client observed. “It’s less about rules, and more about relationships.”
Before the complexities of asset transitions are even considered, the underlying strength of the family structure is integral. Building a unit where bonding and co-operation are promoted secures the longevity of dynasty. After all, it’s human beings that make this process operational. Bank accounts and investment ideas can be easily managed with the help of professionals, but earnest family ties serve as an anchor – reinforcing the structure and stability of everything else.
For most families, frictions are predictable. That’s why it’s vital to maintain an open-forum space, where all matters are properly acknowledged and settled. Not all conflicts pertain to the world of business or money, either. Personalities can always clash – as can differences in ideals and outlooks.
It’s not easy to talk about money. Parents may worry that an ungrateful mindset could affect younger relatives, and how that lack of humility could breed a sense of arrogance. They might have concerns about the viability of the rising generation for prospective leadership roles, or positions of authority in the business/family office. They may even keep inner workings completely concealed from their sons, daughters, nieces and nephews – wishing to exclude them entirely, or ‘protect’ them from the presence of wealth altogether.
For younger family, questions of fairness will invariably enter the discussion. Is the distribution of companies, assets and responsibilities being handled candidly? One of the biggest problems children face is a perceived sense of injustice. Apprehensions about ‘living up’ to expectations can also be a source of unease, as can the sudden adjustment to access of vast quantities of capital without any preparation.
By bridging the gaps that separate generations, empathy and understanding can grow. Regular retreats and holidays can foster trust and good will, as can regular family lunches and shared activities such as volunteering. Before the boardroom opens its doors, a positive interpersonal environment stands the family in good stead making wealth planning that much easier.
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Family financial planning: Money with purpose
Many of our clients express a wish to ‘grow’ their family’s investment portfolio. The real question is, to what end? How can the conferral of your estate help your family flourish? What functions should it serve, and how can it benefit the causes and communities you care about?
Outlining a vision ensures that everyone remains aligned, and by extension, feels inspired in stewarding the assets. The tragedy of the Roys is due – in large part – to a cycle of validation and entitlement, pitching them headlong into a clash for supremacy and control. Rather than finding purpose in passion or genuine interest, they remain tethered to some immaterial idea of what their ‘standing’ should be – shunning more meaningful pursuits, or overlooking them entirely.
Adrift and aimless, this rotation repeats itself ad nauseum. Enabled by their father and goaded by each other, jealousies fester as schemes become increasingly devious, underlining an important observation. Without sincere stimulation and focus, their money becomes an ultimately hollow venture. Deprived of clarity, and direction and a voice, rivalries override anything useful.
Remember the key to family financial planning is to retain foresight, and map out a clear purpose when allocating your financial assets. Preferably, this plan should be crafted in partnership with your children who stand ready to carry that baton.
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Effective Wealth Transition: Strong Communication
For wealth transitions to be practical, objectives must be identified in a clear, concise manner. How will the inheritance empower everyone, so that resentment is averted, and alliances stimulated? What roles can be sanctioned in pursuit of that vision? In situations as layered as these, communication is essential.
Once a constructive ethos has been created, that baseline can be built upon. Inaction has its consequences, and that silence can be filled with speculation and hearsay. Miscommunication can be mitigated with routine updates that generate honest, transparent discourse.
Through a process of procedural justice, family meetings can build understanding between disparate personas, ages and experiences – allowing disagreements to be resolved. Trusted independent parties can help to facilitate conversations, providing a neutral perspective when proposing possible solutions.
One of our client families meet quarterly for family office updates – analyzing the nature of their investments, structures and philanthropic commitments. Every year, they also conduct annual retreats where spouses, grandchildren and partner’s children gather. A four-day getaway incorporates business discussions involving the immediate family, as well as other sessions that feature guest speakers (for example, expert consultations concerning general economic forecasting, or panels that probe cybersecurity issues) where the wider family can participate to learn. Time is spent on guided walks and shared meals, and in the midst of this immersion, connections are solidified and teamwork bolstered.
Unlike Logan Roy, a thoughtful parent would keep an eye on the future, encouraging his/her family to work together, exposing them to the brass tacks of business in a more measured way. Part of an effective wealth transition is a phased disclosure of the family’s affairs, as this allows members to learn and adjust over time. Normalizing cooperation is always constructive, as it grants family a requisite skillset and balanced perspective. Just picture how different Succession might be if its siblings were supportive of one another, and the business at large…
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Effective wealth transition: Equipped & educated
Throughout Succession, Logan Roy remains a hulking force of nature, dismissive of his children and their aspirations. ‘I love you, but you are not serious people,’ he decrees, directing his empire with no desire to share power. In his suspicious, conspirative kingdom, concessions are seldom proposed, let alone reached. It’s sink or swim for everyone involved, and most are drowning.
Tying up everything in tightly controlled trusts can send a negative subliminal message. In short, don’t leave the people in your family in the dark. It’s better to furnish them with the necessary knowledge, so that the important conversations can be transparent and inclusive. Courses and classrooms can be instructive, but try to also consider mentorships, work experience, and the broader spectrum of educational resources.
The advantages of a mutually beneficial exchange need not be limited to the practice of business. Those same principles can be just as valuable when it comes to governance. Families are more prone to participate when they’re financially and commercially prepared, and far likelier to engage when they’re acquainted with the intricacies of your arrangements. That all begins with education.
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Interested in family wealth planning? Talk to Us
At J.P. Morgan Private Bank, we’ve spent over 150 years advising families across the globe, enabling them to realize the full potential of their wealth. Whether it’s planning, office arrangements, stewardship or succession, or family investments, our team of experts stand ready to assist you.
We can help to guide you and your family as you shape a collective vision, imagined as one.
Start aligning those ideas with one of our expert advisors. We’d be delighted to hear from you.