Preventing Families from Self-Destructing Their Wealth

Preventing Families from Self-Destructing Their Wealth

It’s practically a byword in the financial advisory industry: family conflicts that wreck businesses and squander the wealth earned over generations.

These struggles put the advisor in a difficult position as the conflicts are often deeply personal and deep rooted. Reasoning with the parties can be difficult and formal arbitration is often the only way to resolve the fight.

The arbitration process does not aim to solve interpersonal problems and restore amity. That’s the family’s business – arbitration aims to solve practical matters and save the family’s fortune.

Professional arbitrators are available to assist you in the process. Their work is directed towards setting formal guidelines for negotiation and identifying specific goals for development of the family business, even if that means selling to another party or otherwise cutting their mutual financial ties.

When faced with a financial crisis – or perhaps even more unpalatable, prolonged lawsuits – even the most contentious of family members tend to accept arbitration. The process has a good track record of success, largely because it is seen as the least dire of a range of evils.

The mediator isn’t a therapist (although there have been arbitration cases where mental health specialists have been involved), but as a rule, they strive to establish a neutral setting where no blame is apportioned and all opinions can be heard. This can help family members to lay their emotional cards on the table. The arbitrator can then help them turn their raw emotions into specific demands that can be negotiated.

For more information, please read:
What Can Advisors Do When Family Disputes Threaten Client Wealth? | Wealth Management

 

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