Wealthy families now see their long-term wealth more threatened by political risks, taxation, a lack of planning, and failure to engage with the next generation and the whole economic environment. Their biggest concerns are wealth management performance in light of the pandemic, the war in Ukraine, and lingering inflation.
According to CNBC’s latest millionaire survey, millionaires felt relatively pessimistic about the economy and identified several perceived threats to personal wealth. They believe the biggest current threat to their wealth is the stock market, with 60% expecting the S&P 500 will be down or relatively flat by the end of 2023.
Tied for second place, respondents also worry about U.S. government dysfunction and inflation, with the majority of respondents expecting the economy to be weaker by year-end, the survey found. Thus, many affluent Americans still worry about high prices. “That’s the thing I hear the most from my clients,” said Natalie Pine, a CFP and managing partner at Briaud Financial Advisors in College Station, Texas, to CNBC, noting that inflation is a big concern for her clients with assets of $1 million to $5 million.
The HBO series “Succession” as a Mirror
It seems wealthy families have found other reasons to be worried about their wealth. It is quite different than in the 2018 HBO series Succession, which shows the relentless infighting, deceit, and unhappiness across generations of the powerful Roy family.
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Nigel Nicholson, an organizational psychologist who specializes in conflicts within family-run businesses, says to the Washington Post: “The parents need to recognize that the children may have different ideas and even better ideas, that they come with a fresh perspective.”
Why do families fight over wealth?
Still, family disputes over wealth are nothing uncommon. According to Wealthaven, a non-investment family office, there are five reasons why this infighting occurs. The first one is the desire to win at any cost. Sometimes the siblings would rather spend all the money in legal battles than let the family members get any of it. The second reason is the parent´s need to punish. These problems are often connected with parental neglect or favoritism.
The fear of losing perceived gains is the third reason for family quarrels. Thus, family possessions take on heightened emotional value and become the most important point of a family´s battle. The desire to be right is another power pushing the siblings into the infighting.
Both sides feel they are right, whereby adults may feel they need to be right at any cost, or they may feel a certain moral superiority. And the last reason to fight within the family is a sense of entitlement. In many families, the children of the first generation’s wealth can be inadvertently cast with a profound sense of entitlement. The benefactors are often self-made men and women who overcame hardships growing up.
