With UHNW families, a difficult issue is how to ensure the smooth transmission of control of a business and structure of wealth that keeps friction to a minimum while ensuring that different members think that they are having the chance to make the most of their lives. We talk to an advisor operating in this area.

Wealthy individuals may build family offices in the hope that these structures will cut conflicts within a dynasty, but ironically, they can also encourage patriarchs and matriarchs to hang onto power longer than is wise.

One of the most difficult conversations families must have is persuading a senior member to hand over the reins of control, relax and allow younger people to take up their roles. However, family offices can sometimes get in the way, Christina Wing, founder of Wingspan Legacy Partners, told Family Wealth Report in a recent interview.

The firm, founded in 2019, was created to help business founders and families navigate family dynamics, business operations, wealth, legacy and philanthropic impact. 

The recent Succession TV drama, while carrying the usual Hollywood flourishes, has helped raise the subject of how well or not families handle succession, business transfer and inheritance. A big issue is for founders to know when to call it a day, Wing said.

“We are seeing improvements [in succession planning] but ironically the emergence of family offices has delayed succession because family offices are places where a patron can still run something. It is enabling people looking for relevancy to have another outlet for that,” Wing said. The issue of “letting go” gets more significant as people live longer, she said. 

There can be a lot of “pushback” from founders/leaders in handing over responsibilities to younger family members. “People who talk to Wingspan know they need to take a lead in changing,” she said. 

A large task for families is to understand what “Next Gen” members want and value, and it is important for all family members to understand goals and challenges early rather than wait for someone to pass away, Wing said.

An important idea, for example, is encouraging younger members to pursue careers outside the family organization, to gain experience and autonomy.
 

Policy
One significant idea is to develop a “family employment policy,” setting out whether in-laws can own shares in the family business and reduce conflicts in the event of divorce or death, Wing said. “You could end up with equity in a family business in hostile hands after a divorce,” she said.

When some family members run a business, and others are passive beneficial owners of it, family constitutions need to be crafted to distinguish between “owner-investors” and “owner-operators,” Wing continued. She referred to the phenomenon of “sweat equity” for owner operators’ work in running a firm.

Advisors to wealthy families need to be closely attuned to the dynamics of control, the alignment of values and a need for conversation. In the US, the UHNW Institute, for example, has developed a methodology to aid advisors and clients.

Experience and insight
Wing brings a lot of experience to her business: She is a senior advisor at Crestview Partners, a private equity firm focused on the middle market. She also serves on various boards. 

In academia, Wing is on the faculty of Harvard Business School (HBS) where she focuses her research primarily on topics relating to family enterprises. She created a course titled “Demystifying Families in Business,” which covers family dynamics, operating companies, family offices and legacy opportunities. She has also taught first-year technology operations management (TOM), leadership and corporate accountability courses. Wing also chairs HBS’ executive education program, Families in Business, and co-chairs the Family Office and Rising Generation programs. 

Before her teaching and Wingspan roles, most recently Wing was a president and CEO of a family office and worked in finance and operations at a startup venture formed by several of her HBS classmates. Wing began her career focusing on equities and energy investment banking at Goldman Sachs and Kidder Peabody.

International
Besides the business in the US, Wing said she is enthusiastic about opportunities in regions such as the Middle East, and already works with families in the region. (The business does not disclose the total number of clients it acts for.)

“In the Middle East, many families are still in a first-generation phase and have no precedents for succession,” Wing said. The stakes are large because up to about $1 trillion of wealth is due to change hands between generations in the region in the next few years. “There’s an opportunity here for the wealth to go to the right people in the right place, but also a risk of blowing it.”