We’ve all seen how personal presence works: think Bill Clinton, Nelson Mandela or even Tony Blair. But charisma is not only about someone’s physical presence. Other qualities mark out those who have charisma.
How can you build these qualities and become more charismatic? Here are 7 ways:

• Energy attracts. Energy is generated when we’re passionate about something beyond ourselves. We’ve all noticed how some speakers, friends, family members entrance an audience when they talk from the heart. Genuine enthusiasm will make you more attractive to others.
• Improve awareness of others’ feelings (emotional intelligence or empathy). Take a minute or two imagining a situation from the other person’s perspective to give you insight. When you communicate, the other person will feel more understood. They will warm to you, want to listen to you and are more likely to agree with you.
• What you say has to be important. Remember that people listen out for ‘WII FM’ – What’s In It For Me. For charismatic communication, use words that generate images, feelings and emotions rather than intellectual arguments. Your aim is to engage and move first – details can come later.
• Work on your voice. A voice can better communicate a more memorable message when it’s strong, clear, deep and resonant. This is something that men and women can improve upon with brief, specialist coaching. It really does make a difference.
• Physical presence is connected to voice tone. When your posture is upright yet relaxed it will also contribute to a mellifluous voice that people want to listen to. Working out regularly may exercise your muscles, but how often have you seen people hunched over an exercise bike or on the treadmill with shoulders high and neck tensed? Stand upright, shoulders relaxed, breathing from the abdomen. Walk tall to be noticed.
• Charismatic people are interesting. That’s because they are more interested in others than they are in themselves. Think about it: It’s rare to be on the receiving end of someone who can really listen. It’s one of the benefits you get from working with an executive coach. Active listening means putting all of your attention in the other person without thinking of what you want to say next, or waiting to leap in with what’s important to you. It enables a deeper response and connection with the other person. Cultivate your listening skills.
• Inner confidence is charismatic. This kind of self-belief is based on a boldness at engaging with the world and a sense of humour. Charismatic people smile a lot, which feeds into how relaxed they are, what they focus on and the energy they project.

There is no charisma gene. We are not born with charisma. It’s something that can be learned and cultivated and is most powerful when it comes from the heart.

Sara Longmuir, Executive Coach, www.coachingtalent.com

What does the pancreas do?

The pancreas is a large gland sitting in the upper abdomen which has two important roles in the body.  The first is to produce the pancreatic digestive juices which help us to break down the food we eat.

The second is to produce insulin and other hormones concerned with digestion.  Insulin is very important in the body as it enables us to absorb sugar and thus helps to keep the level of sugar at a stable level.  

What happens if my pancreas stops producing insulin?

The sugar in our blood stream is partly controlled by insulin and generally the more sugar in the blood the more insulin is produced by the pancreas to absorb this.  If the cells producing insulin fail, then the level of sugar in the blood rises as we cannot absorb sugar properly without insulin and this is called “type I diabetes”. 

What can go wrong with the pancreas?

The pancreas can become inflamed and this is called pancreatitis, a potentially life threatening condition.  The pancreas can also be a site for cancers to develop.  Pancreatic gland failure can also result in diabetes and malabsorption syndromes since normally food breakdown and digestion is reliant upon pancreatic enzymes.

Pancreatitis

There are several causes of inflammation of the pancreas (pancreatitis) but the two commonest are gallstones and excessive alcohol consumption and these account for 80% of cases.  The former can occur when a gallstone causes a block in bile drainage which can cause pancreatic enzymes to activate whilst still in the gland and this can classically be triggered by a large meal.  In alcohol induced pancreatitis, symptoms usually begin 6-12 hours after an episode of binge drinking. Typically, pancreatitis presents as a severe pain in the upper abdomen associated with nausea and vomiting and can be very serious with a mortality rate of 10-15%.  This can rise to 70% in patients with infected severe pancreatitis.  It is thus important to recognise this condition early. 

Pancreatic Cancer

Pancreatic cancer is uncommon under the age of 40 but it is the tenth most common cancer in the UK.  (Not counting non-melanoma skin cancer.)

There are several associated risk factors including smoking.  Up to a third of all pancreatic cancers are linked to smoking including cigarettes, cigars and chewing tobacco.  Diet may also play a role and a diet high in fat, sugar or red or processed meats seems to increase risk.  Chronic pancreatitis is a known risk factor as is being overweight.  Sometimes pancreatic cancers can run within a family but this is in a minority of cases.  The breast cancer gene faults BRCA1 and BRCA2 if present can also increase the risk.

Exposure to some industrial chemicals called “chlorinated hydrocarbon solvents” have also been linked to an increased risk.  Some studies suggest that other chemicals such as pesticides, nickel, chromium and iron may also increase risk.  Symptoms of pancreatic cancer are usually weight loss, abdominal pains and sometimes jaundice.

As with many other types of cancer, the outcome depends on how advanced the cancer is when it is diagnosed.  Generally speaking, the earlier it is detected the better the prognosis, however it is a difficult cancer to treat and doctors hope that there will be advances in treatment in the not too distant future.

Dr Garry Savin MBBS DRCOG MRCGP
Medical Director
Preventicum UK
www.preventicum.co.uk

‘Hi, my name is Ben and I’m an independent financial adviser.’ Try saying it – it always feels to me like I am introducing myself to a meeting of Alcoholics Anonymous. When I introduce myself to new acquaintances and utter those words, you get the impression that you have just revealed yourself to be the worst type of salesman. And it’s true that IFAs tend to have the reputation of only being out to make the quick sale and earn as much commission as they possibly can before moving on to the next sale and slug of commission.

In my experience, many IFAs tend to generate their remuneration from the transactions they create. What I mean by this is that they only get paid when they persuade you to invest a sum of money or transfer your pension from one provider to another or take out some life (or better yet – critical illness – the commission is much better) assurance, transfer your ISA from one provider to another. The IFA doesn’t get paid if nothing gets changed. I have always felt that there is a tension between the supposed ‘independent’ and unbiased IFA and his need to persuade you to take out a policy or alter something that you already have in order that he gets paid. Recent research from the Financial Services Consumer Panel http://www.fs-cp.org.uk/pdf/rdr_report.pdf suggests that consumers do not value the meaning of ‘independent’ in this context.

And this is one of the reasons that I am excited about joining Asquith & Partners. Because I don’t want to be a salesman looking at all the financial products you have accumulated and point that this one is rubbish, why don’t you transfer to this other shiny new one (and oh, I’ll take 3% of the amount that gets transferred). That is a sausage factory of selling that may give some value to you, but not a lot, and frankly – running a sausage machine is not very interesting or satisfying for me.

What I do find interesting, however, is really getting to know my clients, getting to know their innermost goals in life (and perhaps uncovering latent goals that existed but had not yet been articulated), getting to know how they want to live their life and then setting up the Plan to allow them to meet their goals. And I think that it is the Plan that is of value to people, not the tinkering at the margins with the financial products. Sure - the products are the building blocks but they are of secondary importance to the overarching Plan. The Plan should allow the client to live the lifestyle that they aspire to – whether it is ensuring that there are sufficient funds to retire early and go and live in France or to raise rare breed pigs on a small holding in Scotland.

And the Plan is always flexible. Just as the circumstances of the individual change over the course of a life, so the Plan will also change to accommodate changed circumstances or altered goals.

And I feel that the people, processes and ethos at Asquith will allow me to help clients plan towards specific goals rather than concentrating on the latest product pushed by a life insurance company or the latest flavour of the month fund introduced by a fund management house desperate to clamber aboard a particular bandwagon. I think that the formulation and implementation of the Plan will be both of great value to clients and also be very satisfying for me personally.

And yes, I’m really looking forward to being able to say ‘Hi, my name is Ben and I used to be an independent financial adviser – now I’m a financial planner.’

By Ben Westaway
Asquith & Partners LLP
www.asquith.co.uk

If you are reading this on your winter skiing holiday, you might notice that there aren’t many accountants or lawyers there in the alpine bars extolling the virtues of making a permanent home in the mountains and becoming tax resident outside the UK.  That is probably because their employer has cancelled all leave before 6 April 2008.

The reason for this dearth of pale-faced professionals may make you want to leave the slopes yourself and quickly try and schedule a meeting with said lawyer or accountant before that date.  5 April 2008 has become one of the most important tax planning deadlines, perhaps for a generation.  The date has taken on an aura of almost cosmic significance in the tax community.  Why?  Well …

On 22 March 2006, Gordon Brown, the then Chancellor, announced dramatic changes to the Inheritance Tax (IHT) treatment of trusts, imposing, in many cases, an upfront IHT charge of 20% of trust value on their creation, a 6% decennial charge and ‘exit’ charges when distributions are made out of trust.

New trusts would, in general, be subject to these new charges from that date forward.  For existing trusts, it seems the Chancellor appreciated that trustees would want to have time to consider whether to accept these new charges going forward or whether they would look to mitigate or avoid the charges by either bringing the trust to an end or restructuring things so as to ensure the trust fell within a small group of exceptions – so avoiding the charge altogether or deferring any tax until the deaths of the current income beneficiaries.  The window for any such restructuring closes on 5 April 2008.

Particular attention should be paid to existing Accumulation & Maintenance Trusts or Grandchildren’s Trusts as they are sometimes known.  Unless those trusts ensure that beneficiaries receive the capital outright at 18 or 25, the trust will be subject to the new charges automatically as from 6 April 2008.  There is likely to be a charge if beneficiaries take capital at 25 even if the trust is amended, but altering the trusts is likely to mean that the overall tax paid is significantly less.  Trustees of almost all such trusts are likely to need to take action (or at least consider it) before the deadline – and could find themselves at risk of criticism if no such action is taken.

Then, on 9 October 2007, Alistair Darling, the now Chancellor, announced dramatic changes to the Capital Gains Tax (CGT) regime.  Those changes also come into effect on 6 April 2008.  The CGT rates for all assets (both business and non-business assets) will be replaced with a flat rate of 18%.  In many cases this simplification has been welcomed as it improves upon the 40% higher rate charge (albeit often reduced by the benefit of indexation and taper relief), but for owners of small business or any business asset, the loss of the 10% effective tax rate is dramatic.  For almost any asset, business or otherwise, it is necessary to consider whether to dispose of that asset before or after 6 April 2008.  It may be advisable to trigger a ‘deemed’ disposal of the asset to obtain the lower tax rate.  A deemed disposal could be created by transferring the asset to a trust, but that could lead to the new IHT charges discussed above.

On 18 January 2008, HM Revenue and Customs published draft legislation describing dramatic changes to the treatment of the laws of residence and domicile for CGT.  Non-domicilaries who have been tax resident in the UK for seven out of the last ten tax years would be subject to an additional income tax charge of £30,000 each year if they wished to continue to only pay tax on foreign capital gains and income remittances when that income or gain is brought into the UK.  This new charge will be introduced on … 6 April 2008.

At the same time, the rules for obtaining tax residence outside the UK will be tightened from 6 April 2008.  The exceptions for offshore trusts from CGT where the benefit of the trust is paid to a non-UK domiciliary are also to be removed with some quite serious ramifications for foreign investment in the UK.  The date for those structures to be examined and perhaps collapsed to avoid future taxation is … yes, the same special day. 

No doubt the 6 April 2008 itself will actually prove to be a very calm day in the city.  Not because it happens to be a Sunday, but because all the exhausted professional advisors will be boarding their flights.

By Hayden Bailey
www.boodlehatfield.co.uk

On 24th January, HM Revenue & Customs published draft legislation giving effect to new simplified Capital Gains Tax rules which will apply to all chargeable disposals made after 5th April 2008.   Every individual or trustee who is proposing to sell a valuable asset in the near future should consider very carefully the implications of these changes, and take detailed professional advice where necessary.  Although in many cases, large CGT savings will be achieved if disposals are delayed until 6th April 2008 or later, in other cases it will be necessary to dispose of assets before that date in order to avoid a substantially higher CGT liability.

The main feature of the reformed and simplified CGT system is that in calculating the taxable gain, neither business asset nor non-business asset taper relief will be available, and the deduction of an indexation allowance for pre-April 1998 acquisitions will also be ended.  However, although the abolition of these reliefs may result in a higher taxable gain, the rate of tax applied to the gain will be a flat rate of only 18%, as contrasted with the present rate equivalent to the highest marginal rat of income tax, generally of 40%.

There will be both winners and losers under this new regime.  For example, an individual who has owned a second home or buy to let property for less than three years, and could not therefore claim any indexation allowance or non-business asset taper relief under the present rules, will be pleased to find that the rate of tax in respect of his/her prospective disposal gain is reduced from 40% to 18% if the disposal is delayed until after 5th April 2008.

The beneficiaries of offshore trusts which possess substantial undistributed capital gains will also be much better off under the new regime.  Presently, the distribution of offshore trust gains to UK domiciled and resident beneficiaries is subject to a special surcharged CGT rate of up to 64%.  After 5th April 2008, this special rate, which is based upon the ordinary rate of CGT, should reduce to a much more reasonable 28.8%, and this may encourage offshore trustees to distribute their previously accumulated gains.

The biggest losers under the new regime will be the owners of trading company shares and other types of business property.  Presently, the holders of shares in private or AIM listed trading companies are entitled to business asset taper relief, and this provides a 75% reduction in the chargeable gain, and an effective rate of 10%, where a disposal is made after more that two years ownership.  As a result of the abolition of business asset taper relief, the effective rate of tax on disposal gains will almost double from 10% to 18% on 6th April 2008. Many shareholders will therefore be tempted to make a profit -taking disposal of their holding before that date, if they can secure a reasonable sale price.

Full-time employees of companies listed on the main Stock Exchange can presently claim business asset tax relief in respect of shares held in their employer company, and these individuals will also be badly affected by its abolition.  Many employees build up large shareholdings from their participation in share option and share incentive schemes, and where they have already satisfied the two year ownership period necessary to secure full business asset taper relief, they may similarly decide to make a profit-taking disposal of their shares before 6th April 2008, possibly re-acquiring these at a later date.  It should be noted, however, that where such “bed and breakfasting” transactions are carried out, the replacement shares must not be acquired until at least thirty one dates after the sale, or the purchase and sale will matched with each other, making the transaction ineffective for CGT purposes.  Alternatively, if a taxpayer is married, he can arrange for his wife to repurchase the shares rather than wait for more than thirty days.

The abolition of business asset taper relief will adversely affect the owners of family and employee-controlled trading companies, self-employed individuals, and partners in professional firms, to the extent that they own valuable trading company shares, or tangible and intangible assets used in their trades.  In response to concerns expressed by representative bodies of industry, the Chancellor has announced a new “entrepreneur relief”, ensuring that the first £1 million of gains arising from the sale of a business after 5th April 2008 will be subject to a rate of 10% rather than 18%. This relief will be available where an individual disposes of all or part of a business, or of assets associated with the business.  The relief can also be claimed where trading company shares are sold, provided that the vendor has owned at least 5%, and has been an employee or director of the company concerned prior to sale.  However, although it will be possible to claim the new entrepreneur relief on more than one occasion, the amount of £1 million will apply to the aggregate of lifetime qualifying gains, and gains in excess of this amount will be subject to tax at the full 18% rate.

There are now only two months remaining before the new CGT regime comes into effect on 6th April 2008, and those contemplating the sale of shares, businesses, commercial or residential properties, or other valuable assets, should already be considering the timing of their disposal.  In many cases, it will be necessary to obtain historic information and valuations, and prepare detailed calculations, before deciding whether it is better to sell now or await the introduction of the new regime.  Where professional assistance is needed, this should be sought at the earliest opportunity.

By John Phelan
Wingrave Yeats
www.wingrave.co.uk

Fantasy Cellar ListI started collecting wines 25 years ago, and it was quite by chance that the first Bordeaux en primeur offer I was shown should be the awe-inspiring 1982 vintage. Since then I have often wondered what wines I would have in my cellar now if money had been no object, and if I had run it more responsibly.

The answer came at the end of 2007 when my colleagues at Liv-ex, the fine wine exchange, dreamt up a fascinating idea: the Fantasy Cellar. It’s so simple. They put a notional £100,000 invested through the en primeur market into 30 wines, for a total of 90 cases, from various vintages ranging between 1982 and 2005. Their Fantasy Cellar is can be seen here.

First, an explanation of en primeur : to buy a wine en primeur is to buy the wine before it has been bottled. It is the vinous equivalent of a future. In most years, buying en primeur is the most efficient, and least expensive, way to buy good wine.

Of the 30 wines in the Fantasy Cellar, no less than 20 are Bordeaux red. This should come as no surprise, as some 80% of fine wine turnover is in clarets. Liv-ex have allowed themselves the luxury of only one 1982 Bordeaux red, Château Lafite-Rothschild (Pauillac), but two cases of it! Robert Parker, the doyen of wine writers, (whose scores I use throughout) gives this wine 100 points out of 100, and he anticipates it will be drinking well up to 2070. Four other vintages of Château Lafite are included (the 2000 and the 2003 are both 100 point-ers), which, taken with the 1982 and the château’s second-label Carruades de Lafite 2004, make up some 42% of the clarets in the Cellar. Even more astonishing is that Pauillac, that little village in the Médoc on the Gironde’s left bank, is responsible for an amazing 66% of the Cellar’s Bordeaux reds (here’s a thought: with a population of circa 2,500, is Pauillac the world’s most valuable village?).

Of the other left bank wines in the Fantasy Cellar, the one that stands out the most is another 100-er, Château La Mission Haut-Brion 1989 (Pessac-Léognan), no longer the poor relation to Château Haut-Brion itself, whose 1990 also makes an appearance in the Cellar.  Château Margaux 1996 (Margaux) has a mere 99 points, but what a gem! Château Montrose 2003 (Saint-Estèphe) deserves its place, but my personal consistent favourite is Château Léoville-Barton (Saint-Julien), here offering its 2003 from that record-breaking hot summer.

Only 3 of the 20 Bordeaux reds are from the right bank of the Gironde. Chateau Cheval-Blanc (Saint-Émilion) must be included, but I would have chosen the 2000 in place of the 1998. Château Pétrus 2001 (Pomerol), sometimes called the greatest wine in the world, barely makes it into the Cellar, with only a dozen bottles, and claiming 95 points. However, I can only put down the presence of Château Valadraud 1998 (Saint-Émilion), a once-favoured garagiste wine, to a touch of reality – not even the Fantasy Collector gets it all right!

No Cellar of this quality would be complete without a Bordeaux white, and Château d’Yquem 2001 (Sauternes) does it for me! The two red Burgundies, Richebourg 1999 and La Tâche 1996, are both from Domaine Romanée Conti, the greatest producer of pinot noir in the world – the problem is getting hold of any. Still, this is a Fantasy Cellar …! The one Burgundy white, Chevalier Montrachet 2002, comes from the area’s most consistent producer of top quality wine, Domaine Vincent Leflaive.

The two Champagnes, Dom Pérignon and Krug, are both legendary names, and the 1996 vintage is a corker. Italy’s two contributions to the Cellar are both brilliant wines: Masseto 1997 from a tiny Tuscan vineyard, and the celebrated Sassicaia 2003, another Tuscan. The new world has only one entry in this Cellar, and it has to be the mighty Penfolds Grange 1998, proudly bearing 99 points. Meanwhile, back in the old world, The Rhone’s Châteauneuf du Pape 2001 from Château Beaucastel fully deserves its place in the Fantasy Cellar.

If that hasn’t whetted your appetite, then nothing will! If you’re tempted to say it’s too late to start a cellar, nothing could be further from the truth. The 2005 red Bordeaux vintage is, arguably, the greatest of the last 100 years. It is being bottled and exported right now. Get collecting!
8th January 2008

Nigel Johnson-Hill is chairman of Liv-ex.com, the fine wine exchange. He is also chairman of The Vintry Wine Co Ltd. He is an avid wine collector with a broad but “imperfectly balanced” range of wines. Details of the Liv-ex Fantasy Cellar are available on www.liv-ex.com

Last year, I stayed in or visited over 120 luxury hotels & resorts around the world. The very word “luxury” is now so over-used that my boast could be viewed with suspicion. If you just Google the words “luxury hotels”, you will be offered 4-Star & even 3-Star properties.

My interpretation of luxury when it comes to hotels & resorts can generally be summed up in a few names … Four Seasons, Peninsula and Mandarin Oriental … for one reason alone – flawless service. Don’t get me wrong, there are some equally luxurious boutique hotels but if you were to choose blind, the above names would 99 out of a hundred times not let you down.

With gazillionaires like e-Bay founder Pierre Omidyar, Microsoft’s Bill Gates and of course Prince Alwaleed bin Talal leading the way, true luxury hotels are being announced, built & opened in record time … and numbers. And there are no signs of saturation in the market either or indeed rate-cutting. Yes, my friends, the real luxury hospitality sector is expanding and that is good news for all concerned.

I’m always being asked which is my favourite hotel or resort in the world. While there should be quite a simple answer, I have realised that – thankfully – most of the properties I have stayed in have something that is special/memorable … saying that, there are a couple I visited in 2007 where I felt like I was being bathed in warm strawberry jam…

Los Angeles:

The Beverly Wilshire – a Four Seasons Hotel

BW can be found on Wilshire Boulevard – opposite one of the greatest shopping streets in the world – Rodeo Drive.

The hotel has 2 distinct wings, Beverly and Wilshire. Wilshire was built in 1927 and Beverly in 1971. There are a total of 395 rooms including 137 suites. It is regarded as the backdrop, the epicentre of Beverly Hills. Everything is shaped around the hotel. It used to be an old racecourse before and then it was developed into the hotel in the 20’s and everything that’s been built in Beverly Hills leads up to the Beverly Wilshire.

On the food front, there’s the all-day dining BLVD – offering fabulous international cuisine. Then there’s CUT, the Wolfgang Puck steakhouse – possibly the most popular and therefore hard-to-get-into restaurant in the whole of Los Angeles.

There’s an outdoor swimming pool that is a copy of the one that Hollywood actress Sophia Loren has at her villa in Italy.

Warren Beatty spent 10 years of his life in Suite 1001 during the 1960’s and 1970’s enjoying an amazing veranda – several thousand square feet in size and with unchallenged 360 degree views of LA!
www.fourseasons.com

Hong Kong:

The Peninsula

For decades, the hotel has sat proudly on the Salisbury Road on Kowloon Island – enjoying views of The Harbour and Hong Island …The Peninsula was opened on December 11th 1928 and is the oldest hotel in Hong Kong. After the main tower was added in 1994 there are a total of 300 rooms including 54 suites.

Fascinating facts about The Peninsula, Hong Kong:

The hotel’s pageboys - the first hotel in Asia to have them - open the large double glass doors in the Lobby around 4,000 times a day! They and the baggage team carry around 300 pieces of luggage a day too! There are 25 elevators carrying the guests. 3,720 litres of paint and 18,600 light bulbs are used every year to keep the hotel spick & span.

The Hotel boasts 14 extended wheel-base Rolls-Royce phantoms … the largest single order ever placed for the motor manufacturer. The limos do 1000 airport transfers a month — 40 minutes each way. It is the 8th fleet since 1970 … and the hotel has motored through 70 of them!

In 1967, the two Chinese lions were installed to ward off evil spirits. These lions have bred and now their offspring appear at the entrance to other Peninsula hotels worldwide.

900 staff work in the hotel — 2 have been there over 50 years.

The hotel has its own helicopter service from the two pads on the top floor.

Afternoon tea serves up 1000 scones a day. The wine list is 429 long. 400 cups of coffee and 250 cups of tea are sold daily. 1,000 kilograms of loose chocolates are sold every month from the hotel’s boutique. The hotel is Hong Kong’s single biggest corporate purchaser of flowers!

There are 300 rooms & suites in the property.

Shopping-wise and the likes of Davidoff, Tiffany & Co and Louis Vuitton opened their first branches in Hong Kong and Asia itself at The Peninsula.

On the 28th floor, the hotel boasts The Felix – the MOST incredible bar in Hong Kong!

www.peninsula.com

Finally, and closer to home and just to prove that I’m not all “luxury groups”, I have found a tiny gem in

Dorset:

Yalbury Cottage

Recently re-opened after a refurbishment and change in management, Yalbury is at the fore of a new type of luxury hotel experience – where intimacy replaces facilities and personal service is totally & utterly personal.

There are just 8 bedrooms in this 300 year old cottage, dogs & children are very welcome and the owners Jamie & Ariane have 45 years of hotel experience between them … much of it courtesy of the Four Seasons (yes – that group again!).

The food is excellent (Jamie is an award winning chef) and if you are looking for an escape from London and 72 hours of de-stress – Yalbury Cottage is for you.

www.yalburycottage.com

“Inside Luxury Travel with Varun Sharma” airs every Tuesday on The Travel Channel at 2030 hrs (Channel 261/262).

Sister company Inside Luxury Travel Clubs looks after your travel needs – business & leisure. Contact Emma on 020 7976 6010 or on emma@insideluxurytravel.com

Children and money are interesting topics on their own, but when they are mixed with business, life can become very challenging. 

We spend time managing our careers and the generation of wealth, but how much time do we devote to managing the family and its relationship to wealth and the business?

One thing that is true is that however you bring up your children, they believe it could have been different.  My theory is that the way you are brought up rotates 180 degrees every generation, which is one reason why strong relationships can grow between children and grand-parents.

Research has shown that 45 percent of our behaviour is inherited and the rest is learnt from our environment.  Other research shows that middle-age now starts at 60 but adolescence ends around 30!

One of the most difficult areas for parents is how to “deal” with the topic of money with their children.  This is especially difficult for wealthy parents who generally opt for one of two extremes: too little – don’t want to spoil them - or too much.  The route chosen will affect the children’s relationship with money for the rest of their lives.

One of the more successful approaches is to provide them with a consistent and balanced set of values.  The obvious ones are:

• Learn to say no – the art of whining is a child’s best friend!
• Manage expectations!
• Instil a work ethic in the children!
• Involve them in philanthropy!
• Teach them budgeting skills and saving!

One of the best presents parents and grand-parents can give a child is to prepare them to live with wealth.  Wealth brings with it a responsibility to manage it.  This can become a burden if those receiving it have not been trained in the art of wealth management.

The issue becomes more complex when the wealth has been created within an owner-managed or family business.   Only 6% of “family owned” businesses survive beyond the third generation - “rags to riches and back again in three generations”. 

How can this be avoided?  Primarily by separating the family and the business, then by creating “rules” to manage the relationship between the two.  The family organisation manages the wealth and well-being of the family, whereas the business generates the wealth for the family. 

It is not easy to achieve this because the family and business systems are normally inseparable in the minds of those involved.  However, effective dialogue gives everyone a feeling of being involved in decision making and that through this process their wishes have been understood and discussed.  Creating this environment and the associated processes substantially reduces the chance of rebellion in the youngsters.  This coupled with an individual’s needs not being met, are probably the primary causes of wealth destroying a person and/or the family and business. 

Further disruption is caused by people joining, say through marriage, or leaving it through events such as death or divorce. 

When this happens, both parents and children have expectations and needs but whereas the parent’s expectations are voiced, sometimes with monotonous regularity, the children’s are in the main only expressed during an argument.  Not only this, but things said in anger usually hide the real and underlying issues.  It’s not easy to tell your parents what you feel or need, when they have articulated theirs for you.

Parents can create problems by making assumptions about what is good for their children, or what they want or need.  To overcome this, it is useful if the parents can become friends with their children because this will help them sit down and have an adult conversation, even if the children are teenagers.  But this is not always easy.  However there are times when children, whatever their age, still need parents to be parents – especially mothers.  Gauging when this is needed is an art.

Children often wish to go out into the world and build a career before doing the “prodigal child” bit in their late 20’s, 30’s and even 40’s.  Parent’s assumptions that they are not interested in the family business often prevent them from returning, while other siblings who joined earlier can feel threatened.

Nothing can prevent disagreements between family members but having systems and processes in place for the family and then for the business can help to stop them becoming destructive.  It is worth re-iterating that constructive dialogue can, with time, resolve most issues.

Once this way of thinking and working exists within the family it will be passed on into future generations, providing a way to deal with problems.  The introduction of a system and processes to manage the family helps to create agreed family values relating to the “family system” and a common value system with regard to money.

By John Freeman
Family Business Specialist
0(44)1582 462192
John.F@familiesinbusiness.co.uk
www.familiesinbusiness.co.uk
 
“Working with families in business to ensure the wealth and well-being of the family into future generations”