How families pass on wealth and responsibility is one of the key issues in wealth succession. Benjamin Vetterli, Senior Family Advisor at LGT, has been helping high-net-worth families structure their wealth across generations for 25 years. In this interview, he explains why open dialogue is crucial, how families gradually introduce the next generation to responsibility and investment decisions - and where theory and practice diverge.
Benjamin Vetterli: More often than not, it comes down to a lack of dialogue. In our "Wealth for Impact" study, more than half of the 60 members of the next generation we surveyed said wealth was rarely or never discussed openly in their families.
They want to protect their children. Parents worry that if their children know how wealthy the family is, it could blunt their ambition or make them less inclined to build something on their own. They also fear it could affect who comes into their children's lives, attracting people who are mainly interested in their money.
I understand the concern. I have children myself. But in my experience, secrecy rarely ends well. You don't learn how to manage wealth at school. So what often happens is this: the subject is avoided, the parents eventually pass away and the very outcome they feared becomes a reality. The children inherit substantial assets, feel overwhelmed and no longer have anyone they can talk to about it.
In more than half of families, wealth is rarely or never discussed openly.
Not necessarily. In my view, it's less about exact numbers and more about basic openness. Children should understand that the family has wealth. More important still is talking honestly about challenges and mistakes. Fathers in particular often present themselves as infallible: "I'm the greatest, I can do anything, I never have problems." That's not much help to the next generation. What does help is hearing about difficult decisions, challenges encountered with investments and the realities of managing wealth. Someone recently said to me: "Wealth loves silence". I think that's true when it comes to the outside world. But within the family, the opposite is often needed.
I usually start by helping the family look at the subject in a more detached way so it feels less personal and becomes easier to talk about. I often use the Princely Family of Liechtenstein as an example. They've succeeded in preserving family cohesion for 26 generations. The real test is not how a family behaves when times are good, but how it deals with difficult periods, setbacks and what it learns from them.
After that initial phase, I bring the relevant family members into the conversation. Many families carry a great deal of emotional baggage, which can make rational discussions difficult. In those cases, it can help to bring in a neutral mediator with no agenda of their own, an open mind and a willingness to listen.
That's something we see very often. There is a clear tension between the baby boomers and millennials and Gen Z. For many boomers, status, power and success are what counts: their life was all about work, work, work. Younger generations place greater emphasis on values, individuality and self-realisation. Many are less interested in getting rich at any cost. That can be hard for the older generation to understand, and it sometimes leads to frustration, because they expect the younger generation to think the same way they do.
Benjamin Vetterli is Senior Family Advisor for ultra-high net worth clients at LGT. He has been helping families and entrepreneurs structure their assets across generations for 25 years.
It starts with a genuine effort to see the world from the other person's perspective. Take a simple example: for the baby boomer generation, the fax machine was revolutionary invention. You fed it a document and, at the push of a button, a copy came out in New York. Ask a child today what a fax is, and the answer is often: "No idea." When parents make a conscious effort to recognise the strengths that younger generations can bring to the table, whether that is a more global outlook, fluency in AI and social media, the tone of the conversation often changes. Suddenly, there is room for innovation and fresh opportunities. And if a family has done a good job of passing on its core values, the two generations' goals are often less far apart than they first appear.
Yes, I do see certain regional patterns. In parts of South America, the Middle East and Asia, the older generation tends to find it harder to hand over responsibility. The role of the pater familias is deeply rooted, and with it, a fear of losing status and relevance. I remember a 93-year-old senior executive from South America who, when asked about succession, simply said: "I'm gonna think about that when I'm old." Europe presents a different picture. Families tend to expand considerably over time, which means there is a broader pool of potential successors. In China, on the other hand, the legacy of the one-child policy often leaves families with no such choice. There, the challenge is often not having to choose between several candidates, but persuading the only child to join the family business at all, especially if their interests lie elsewhere, for example in AI.
In situations where several children are involved and one is expected to run the business while the others follow different paths, perhaps in medicine or the arts, it helps to establish clear rules early and to talk openly about succession. A binding dividend policy, for instance, can help to reconcile differing interests. Siblings are more likely to accept their brother or sister taking operational control of the family business if they receive a defined share of the profits. Structure and transparency are often essential to preserving family cohesion in these situations.
Many families now approach this far more systematically, often in stages. Some start when their children are still young, through summer camps or teen days that introduce the family's history in a playful way, or through early work placements in the business or family office. Some also use elements of gamification to introduce children to investment thinking. For example: each child receives a specific sum, chooses a stock and explains their choice to the others. A year later, the family reviews how those investments performed and talks about what everyone learned. Philanthropy can be another good entry point. Future successors may begin by taking responsibility for projects linked to causes that matter to the family, before gradually moving closer to the family's core business.
As soon as a family name becomes associated with wealth, or appears on the Forbes rich list or something similar, people with "interesting business ideas" start appearing in their lives. Young heirs often find it difficult to say no, especially when a personal relationship is involved and they don't want to damage it. One solution that can work well is to set up a venture board within the family office. That gives heirs a way to respond without making it personal: "Interesting idea, please submit it to our board, which reviews all proposals." It takes some of the social pressure out of the situation and helps protect what matters most to many families: strong relationships both within the family and beyond it.
