Where to start with wealth planning 

There are lots of different ways we can define wealth. To help structure your plans consider both your financial and your non-financial wealth. Financial assets like cash, investment portfolios, real estate and a family business could be front of mind. You may also want to consider protecting your non-financial wealth such as your family’s reputation and social capital, family history, traditions, and even your legacy. Listing what you want to protect is a great first step to securing its future.

CHECKLIST: 

1. Take time to make a comprehensive list that reflects your own unique circumstances. What do you want covered and protected? There are no right or wrong answers, just the basis for discussion.
2. Next, establish your current position. What’s on your personal balance sheet? Consider your income statement including surplus income and outgoings. Be realistic. Ask yourself whether capital drawdowns are required to maintain your required cash flow day to day? Consider the full spectrum that will help add clarity for the next stage.

Not everyone knows the current status of their assets or how easy they are to access. They could be locked in for a long period or focused on cash for liquidity reasons but not providing returns. You also might have wealth distributed internationally across countries and jurisdictions for business or family reasons.  Understanding where your assets are held can help build short, medium and long-term financial objectives based on clarity.

CHECKLIST: 

1. Use cash flow projections to stress test your financial objectives. What is the predicted trajectory of your wealth – both growing it and how you are spending it currently? Being clear on where it is, how hard it is working and how accessible elements are can help sustain your lifestyle aspirations and still achieve long term goals or milestones.
2. Map out your wealth (including jurisdictions) to help align your objectives and maximise efficiencies for the future. You may need an advisor like us to help you understand any personal considerations when building a clear plan for the future.

It’s not unusual for wealthy families to hold their assets in a wide variety of personal names, structures or legal entities. Many also have a team of advisers and wealth managers to call upon for day-to-day knowledge and opportunities.

Have you considered where you will get the advice and management for your investments? You might be able to, and want to, do it yourself. Or perhaps you would prefer to appoint independent investment advisers and managers. With any option, don’t forget to consider the long-term costs involved of either your time or in outsourcing. Consider the level of support needed for all the types of investment in your portfolio. You may need different people for different elements or specialisms.

How you organise these individuals will be key to the success of your future wealth plans. As the principal, you could establish bi-lateral relationships directly with each of the parties involved, with all of the information centrally held by you.

Depending on the level of your wealth, this can be time-consuming, demanding of you personally, and requires a lot of communication across each relationship.

Alternatively you could go for a more formal set-up, with additional family members involved, and wealth structures such as Trusts. This can help ease the pressure on you personally and set parameters for the long-term ambitions of your wealth. There are of course considerations to bringing in additional individuals and it is critical that robust governance is in place. You will also need to consider the ongoing costs.

Whatever route you take, designing your own wealth blueprints at this stage can ensure clarity and peace of mind. 

CHECKLIST: 

1. Consider how much you want to be involved, your priorities and who you may want to bring on board today or the future. Be realistic about what you can take on versus how much management you would like to have and the long term costs associated with outsourcing.
2. Your plans should adapt to your situation. Remember to review your wealth plan and structures regularly.
    

At HSBC Global Private Banking, we’ve partnered with and supported wealthy families all over the world for generations. We listen and advise to help grow, manage, and preserve wealth, now and for the future.