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April 15, 2016 at 11:05 AM
A new study of ultra-wealthy families gives lie to the notion that formal decision making about wealth puts a strain on family relationships.
Morgan Stanley and Campden Wealth Research reported last week that 44% of ultra-high-net-worth poll participants in North America said decision making had a positive effect on their relationships with other family members, 30% said it had no effect and just 19% said it had a negative one.
“The study shows that involvement in decision making helps build better family relationships,” Campden’s chief executive Dominic Samuelson said in a statement.
“But importantly our analysis identifies a vital element underlying this harmony in decision making: having proper governance and decision-making structures in place to minimize conflict.”
Consider perceived outcomes among respondents of investment decisions made where there were more governance structures and non-investment decisions with fewer structures:
- Clear: 78% vs. 71%
- Effective: 83% vs. 74%
- Efficient: 78% vs. 54%
- Allows quick response: 80% vs. 59%
The research was based on a quantitative survey conducted in November and December of 59 members of North American families with more than $35 million in assets, plus in-depth interviews with 15 family members.
The study found that investment committees figured prominently in families’ financial decisions, but they also used family and professional advisors and family office personnel.
