Insights


What is the purpose of your family wealth? Six common examples.

by Brad Simmons Partner Brad's vision is for every successful Australian family and entrepreneur to have a clear sense of purpose for their wealth. Brad helps to connect families with the expertise they need to simplify, protect and grow, enabling them to live their purpose and build and perpetuate their legacies. He works with passion, insight, independence, discretion and unwavering dedication to help families transition wealth across generations. Contact Brad

What is the purpose of your family wealth? Few questions could be more important in the pursuit of successful intergenerational wealth transitions. However, in our experience, it is a question which draws a blank look from even the most sophisticated of family wealth owners.

Current research supports what we see anecdotally. A global study of family wealth indicated that 70% of wealth transfers fail within three generations*. The key reason cited for the high failure rate is a lack of definition around the purpose of a family’s wealth.

When we refer to ‘family wealth’ we are not just talking about financial capital. We are talking about the elements of human, intellectual, social, spiritual and financial capital. We see financial capital as simply the fuel that helps to drive the other dimensions.

If defining the purpose of family wealth is so critical, where do successful families start? As we outline in the Family Roadmap, it all begins with defining the family’s vision and values. This provides a platform for families to define the purpose of their collective balance sheet.

We have worked with many families to help them with this process. The purpose of a family’s wealth is as unique as the family itself. Below are some common examples of the descriptors that we see families adopting to define the purpose of their wealth.

1. Sustainability

Preserving and growing family wealth across generations in a way that meets the needs of the current generation without compromising the ability of future generations to do the same.

2. Legacy

Preserving, growing and honoring a family legacy for the benefit of future generations.

3. Living and lifestyle

Funding the living and lifestyle costs of family members.

4. Entrepreneurial opportunities

Enabling family members to pursue entrepreneurial opportunities and take risks to develop their business acumen and build upon the family legacy.

5. Education

Supporting the education and professional development of family members to enable them to achieve personal fulfilment and prepare for the responsibilities of wealth ownership and/or business management.

6. Philanthropy

Making an impact by contributing to the community to support those who are less fortunate and/or pursuing a cause which is not adequately supported by private enterprise or government.

We work closely with families to deliver a Vision & Values Program to help them achieve clarity about the direction of the family and its assets, build alignment between family members and secure commitment to moving forward to build a legacy together. The program begins with surveying individual family members through an online questionnaire and one-on-one interview, before bringing it all together in a family workshop to map out a way forward. It is amazing how much energy – entrepreneurial, philanthropic, financial and personal – this process can unlock from within a family.


Mutual Trust Pty Ltd ACN 004 285 330 (AFSL 234590). Liability limited by a scheme approved under Professional Standards Legislation. For participating members (other than for the acts or omissions of Australian Financial Services Licensees). This information is general in nature and subject to change. It does not constitute tax, legal or financialadvice. We recommend you seek advice specific to your circumstances before taking any action. Copyright © 2014 Mutual Trust Pty Ltd.
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