The Generation Game?
My kids love my impressions of the late Bruce Forsyth… they don’t know who he was… and the impressions aren’t terribly good…and, come to think of it, they don’t laugh much but…
Anyway, one can always rely on the family for support? To have the utmost faith in your abilities?
Clearly, I don’t want to take you through this report, which is satisfyingly short and easy to digest.
However, some key themes were as follows:
• That more business ‘originators’ were concerned with the next generation’s ability to manage the business than those who were not concerned;
• Many of the next generation managers in the business felt either under prepared or not supported in taking over the family business;
• That the younger generation were more focused on maintain the family’s wealth across the generations than maintaining the business itself
None of these points is likely to come as a surprise for those who advise family businesses.
These issues will always need to be brought in to the open, unpicked and addressed whenever one is dealing with such a business. Different aims and objectives are likely to create many areas of friction.
The report also captures the zeitgeist by analysing the impact of COVID 19 on the UK’s family businesses.
Of course, the report describes how COVID has created ‘pressure’ on family business practices. The impact on the day to day activities will clearly depend on the nature of the business. Some businesses will be marginally affected, others have seen the metaphorical and literal shutters pulled down overnight.
In addition, COVID may also have pulled the rug out from under any existing, and perhaps carefully prepared, wealth transfer plans.
Indeed, at ETC Tax we have been busy for many months looking at protecting a number of family businesses from the existential threat that COVID has presented to both the business and the family’s wealth.
For example, this might involve ring-fencing important and valuable assets held within the Company. It might also ensure that assets are held in trust, rather than in the names of family members to provide another layer of protection from future, potential creditors.
However, COVID has, understandably, also provided a reminder of the ‘originators’ mortality and they have been speeding up their plans to transfer wealth, and the business, to the next generation.
We would always recommend that the owners of family businesses carefully consider their succession plans and, ideally, with the next generation involved in those discussions.
Where that happens then hopefully everyone will have a ‘good game, good game’.
If you have any queries about this article then please do let us know.