The wealth of the entrepreneurial family is far more than merely the financial outcome of entrepreneurial activity. It forms the material basis for entrepreneurial freedom, intergenerational responsibility and the ability to make long-term decisions. At the same time, it presents entrepreneurial families with complex questions: regarding control and the use of assets, regarding fairness and the merit principle, and regarding protection and development across generations.
This thematic page explains why wealth management in entrepreneurial families goes beyond traditional wealth management. It outlines the strategic, family-related and psychological issues that come into play when managing family wealth – from governance and wealth succession to preparing the next generation.
In entrepreneurial families, wealth management refers to the deliberate planning, structuring, management and transfer of the family’s wealth. The focus is on how financial, business and family resources can be utilised in such a way as to ensure long-term stability, decision-making capacity and accountability across generations.
Unlike in the case of purely private wealth management, the assets of an entrepreneurial family are often closely linked to the family business. Company shareholdings, dividend payments, investment decisions, succession planning and family expectations are all interlinked. Wealth management thus becomes a strategic process that considers the family, the business and ownership as a unified whole.
A key task is to develop a shared framework: What are the family’s objectives for their wealth? What role does the family business play? How should risks be allocated, distributions managed and future generations prepared?
The assets of an entrepreneurial family refer to the totality of tangible and intangible assets that are owned by the family, controlled by it, or relevant to its long-term ability to act and make decisions.
The assets of an entrepreneurial family include, in particular, shareholdings in companies, property, financial assets, as well as foundation, holding company and investment structures. These tangible assets form the economic basis of the family’s wealth and are central to the preservation and growth of that wealth.
Equally important are the intangible assets of the entrepreneurial family. These include reputation, networks, business experience, knowledge and a shared understanding of responsibility, values and Governance. These factors have a significant influence on the quality of decisions and the sustainable management of assets.
It is therefore not simply the size of the wealth that matters. What is crucial is how consciously an entrepreneurial family structures, utilises, protects and passes on its wealth across generations.
For the Wealth management for entrepreneurial families The distinction between primary and secondary assets is particularly relevant. It helps us to view family wealth not merely as the sum of individual assets, but to understand its structure, origin and function.
The Primary assets This generally encompasses the family business itself. It includes shares in the business, business assets, entrepreneurial know-how, market position, profitability and the long-term viability of the business. For many entrepreneurial families, the family business forms the historical, economic and emotional foundation of their total wealth.
The Secondary assets refers to assets outside the family business. These may include property, financial investments, share portfolios, holdings in other companies, cash, insurance policies or other tangible assets. Among other things, it serves to diversify risk, secure liquidity, provide for retirement and hedge against business risks.
Precisely because, in many entrepreneurial families, a significant proportion of their wealth is tied up in the family business, it is essential to take a deliberate look at both levels of wealth. Only the interplay between primary and secondary wealth can enable a sustainable long-term wealth strategy.
In everyday life, wealth and assets are often treated as synonymous. For entrepreneurial families and asset holders with a long-term perspective, however, there is a fundamental difference:
Wealth is primarily driven by money, quantity and short-term availability. It is often utilitarian in nature, geared towards acquisition, and may be characterised by speculation or self-centredness.
Assets On the other hand, it stands for values, quality and long-term benefits. It is rooted in responsibility, entrepreneurial thinking and a long-term understanding of impact – for families, businesses and society.
Whilst wealth is defined by possessions, net worth describes the the conscious management, use and sharing of resources across generations.
To the Practical Guide „An Introduction to Wealth Management“
Entrepreneurial families that enjoy long-term success do not view their wealth as an end in itself or merely as an asset to be held. Rather, they see it as a strategic resource that provides direction, stability and scope for action. In particular, wealth serves as:
Managing wealth is associated with recurring areas of tension, particularly for entrepreneurial families. These shape strategic decisions relating to the accumulation, protection and transfer of wealth.
These areas of tension in the management of wealth cannot be completely resolved. However, they can be consciously examined, structured and strategically managed – as the basis for sustainable wealth protection, clear decision-making processes and long-term stability.
The four areas of tension in detail:
Should wealth be used in the short term to support consumption and living standards, or should it be preserved and safeguarded in the long term?This tension touches on key issues relating to asset strategy and sustainable asset management.
Who gets what – regardless of personal commitment, or depending on the individual’s contribution?It is particularly in the context of family wealth and wealth succession that conflicts frequently arise between the principles of fairness and merit.
Should the assets be managed within the family or by external experts such as asset managers, trusts or family offices?This tension determines transparency, efficiency and risk management in asset management.
To what extent should emotional attachments to assets influence decisions – and where is an objective, professional distance necessary?Particularly when it comes to business assets, emotional attachment can be both an opportunity and a risk.
Wealth has an impact not only in economic terms, but also psychologically. It shapes self-perceptions, roles, expectations and relationships within the entrepreneurial family. For the next generation in particular, the question arises as to how they can be introduced to wealth, ownership and responsibility without being reduced to these aspects or overwhelmed by them.
Wealth psychology helps to bring these dynamics to light. It supports entrepreneurial families in developing the ability to discuss wealth, responsibility, a sense of belonging and expectations for the future. As a result, the management of wealth becomes an important part of family strategy, communication and cross-generational development.
For entrepreneurial families, the responsibility for managing wealth does not begin with the legal transfer of assets. It arises from knowledge, experience, dialogue and the opportunity to develop one’s own roles in relation to family, business and wealth.
The entrepreneurial family’s wealth will remain sustainable in the long term if it is not viewed solely from a financial perspective. Research, practical experience and dialogue together provide guidance for a responsible and sustainable approach to wealth management.
The WIFU Foundation offers a wide range of event formats that deal specifically with wealth management issues. The following is particularly suitable for those new to wealth management issues: Practical seminar: „The Basics of Investment“ – ideal for teaching the basics and helping people overcome their reservations about making financial decisions.
The following provide opportunities for in-depth study and the exchange of experiences: WIFU Forums on Family Businesses, which regularly address sensitive wealth-related topics (e.g. sustainable investment strategies or female wealth) and facilitate confidential discussions amongst peers.
For specialist topics, there are Working groups and symposia ready – such as the new WIFU Working Group on „Attitudes towards and Management of Wealth in Entrepreneurial Families“ for in-depth discussions on wealth management culture or the wealth management symposium focusing on family office structures.
Major events such as the Witten Family Business Congress They also address issues relating to wealth – for example, under the theme „My wealth and I“ – and provide a forum for open discussion amongst family members of different generations.
Wealth management in entrepreneurial families refers to the deliberate planning, management, safeguarding and transfer of family wealth. It encompasses not only financial investments, but also shareholdings in companies, governance structures, succession issues, family expectations and responsibility towards future generations.
An entrepreneurial family’s wealth comprises more than just company shares, property or financial investments. Holdings, trust structures, networks, reputation, knowledge and shared values can also form part of the family’s wealth. For entrepreneurial families, it is crucial to consider these components of wealth within the interplay between family, ownership and the business.
A wealth management strategy provides guidance for recurring decisions: for example, regarding distributions, reinvestments, diversification, risks, succession and accountability. It helps to clarify differing expectations within the family and ensures that wealth management decisions remain aligned in the long term.
Family governance sets out how decisions are prepared, taken and reviewed. It establishes roles, committees and guidelines for matters relating to ownership, assets, the business and the family. This makes the family’s assets less dependent on individuals and easier to manage across generations.
The next generation should begin to build up their knowledge of the business, the role of the owner, the structure of the family’s assets, governance and responsibility at an early stage. It is important to provide safe spaces for learning and dialogue, to define clear roles, and to involve them gradually in committees, decision-making processes and family strategy.
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