Both the fictional Roy family in TV show Succession and the real-life Murdochs illustrate how succession plans should be clearly discussed with those involved.
Before 2018, most of us would not have imagined how one family’s succession planning could play out in a gripping saga on television. But HBO took the extreme wealth, sibling rivalries and business intrigue of one fictional family and drove it into the public arena for a weekly viewing that felt more real and raw than reality TV.
The Roy family’s infighting in HBO’s show Succession was a dramatic take on what we may imagine to be an accurate portrayal of the battles that go on in the families of titans of industry. And the black comedy’s take is not that far from the truth. The fictional Roy family, which runs an international media conglomerate under the helm of the aging Logan Roy, mimics and was said to be inspired by the family, business, and personal politics of the real-life Murdoch family While the Succession series wrapped up in May 2023, patriarch Rupert Murdoch, unlike his TV counterpart, publicly stepped down from Fox Corporation and News Corporation in September to smoothly hand over the reins to his eldest son Lachlan.
The average family may not be led by an all-powerful patriarch who works until 92, but there are pieces of reality and insight that the Roys and Murdochs can teach us, namely, how to best prepare for an inevitable succession and why plans should be clearly discussed with family and other relevant parties.
Financial advisers may feel enthusiastic about a client like Logan Roy, who had an international business portfolio and a number of personal assets in addition to controversial politics and ex-wives, but the reality of balancing all of the moving parts is likely to prove challenging, especially with a Roy-type who is willing to throw a well-laid succession plan out the window in a minute.
Advice beyond investments
To best take on these challenges, wealth managers may need to rethink how they see their role as a familial adviser. Advisers do more than just handle the funds and investment desires of a client, as we saw during the pandemic. They need to be prepared for tense conversations that may be tinged with emotion and involve sorting through complex family dynamics. For some, this may start with planning for the stability of the next generation with education funds or other support. For others, it may involve speaking with entire families to prepare for worst case scenarios, or walking them through necessary actions when the worst case scenario happens. Feelings of anxiety, depression, guilt and isolation are not uncommon when large amounts of money are moving around and different ambitions for a family’s business are in play. Relationships can easily become strained, and trust may be lacking.
UBS found some shocking statistics in its 2022 wealth survey when it came to inheritance. Some 53 per cent of benefactors said their heirs don’t know how much they have. About 48 per cent said they did not share their most recent will with their heirs and 42 per cent said their heirs don’t even know where all their wealth is. Despite that, 56 per cent of benefactors said that having a conversation about inheritance was “not a pressing issue” and 51 per cent of heirs said the topic is “depressing for everyone concerned”.
Handover to next generation
In such cases, financial advisers will need to facilitate conversations as an ‘ostrich approach’ to planning won’t make an issue go away. Advisers should be ready to handhold and push for answers to tough questions even when they meet resistance. For instance, has a patriarch or matriarch communicated their desires to their family? If a child is not interested in taking over the family business, have alternative plans been made? Do the children actually want the family heirloom furniture, or will it end up in storage? Different generations may make assumptions about what others in their family want without knowing the truth, and it is better to hedge those expectations through clear, and regular, communication.
Conflict will still be inevitable. Financial advisers should prepare for this, coming to conversations with ready ideas for compromise. Bankers of the past may not have dealt as directly with emotion, but today’s advisers must include empathy in their arsenal. Investors in recent years, and particularly during the pandemic, have come to expect a more personalised approach to their fund management, which includes an anticipation of their holistic needs in different market environments and personal stages of life.
Clients want to feel comfortable with and trust their advisers to guide them through sensitive topics and work with them to prepare themselves and their inheritors for the impact of wealth changes. This could involve difficult conversations around inheritance, such as a client’s philanthropic goals and a potentially uneven distribution of assets. Financial advisers should strive to bring about as much as a unified family vision as possible, while being sensitive to those who feel disgruntled.
Part of an adviser’s ability to bridge generational gaps should come from a development of financial skills to target family members in different stages of their financial journeys. UBS reported that six in 10 heirs said they have never had an in-depth discussion about transitioning wealth before their parents passed away. Family heirs are too often left out of discussions about their family wealth, and may have little idea about where it comes from or where it is going.
Financial mentors and educators
In these cases, an adviser will not just need to spur on conversations within the family, but they should also consider themselves a financial mentor and educator to the inheritors. This needs to go beyond just the financial basics of where the money is being invested and look further into the type of impact the individual would like their money to make and how they envision their future and the role their potential wealth or role in a family business could play in that. Solutions could include not just one on one conversations with an adviser, or family discussions, but also community events, such as a cocktail hours or financial seminars for young clients. In this way, the adviser can become an active facilitator for each generation of a client’s family.
Death or major illness should not trigger succession planning. With help from active financial advisers, families can avoid the fate of the Roys and look forward to a smooth and conflict-free succession.
April Rudin is CEO of The Rudin Group global wealth management consultancy
