Omnia talks to WSJ about “Sudden Wealth Syndrome”
In an article featured in the Wall Street Journal, chief executive of Omnia Family Wealth Steven Wagner discusses “Sudden Wealth Syndrome,” an occurrence that can be catastrophic to family wealth when an unprepared heir suddenly inherits wealth. Similar to the circumstances that befall lottery winners, these adult heirs are often unaware of the level of family wealth that they will inherit and are unable to manage the stress associated with a financial windfall.
To help families, Omnia encourages family meetings during which the second and third generation can learn about the family wealth and discuss those details with family members in relation to their long-term goals and the over-all family legacy. This gives the wealth creators the opportunity to prepare their children and grandchildren for the responsibility of managing the family’s financial legacy while also giving the children a chance to gain a deep understanding of how to manage financial assets.
“My firm enjoys facilitating these conversations because they allow us to engage clients not just on questions of investment performance, but also on an issue that matters to them most: their children’s future.”
To demonstrate the power of these conversations, Steven discussed an example of one such meeting during which the parents were planning to discuss the transfer of the family business into the hands of their grown children, who at the time were both employed by the family business. During the meeting, the siblings discussed their future plans. While one son planned to stay long-term to manage the family business, the other son planned to pursue a career elsewhere. Because they were able to discuss their plans in an open, honest and safe environment along with their parents, they were able to find a solution that satisfied everyone’s priorities. As a result, Omnia was able to help mitigate potential conflict between family members that almost certainly would have damaged the relationship between the siblings.
“Our passion is helping families establish a legacy that will endure. When families gather together to discuss their plans and purpose of their wealth we can help to resolve potential problems before they occur.”