Less Than 20% of Family Offices Have Robust Succession Plans

Scott Beach, chair of Day Pitney's Family Office Practice, was quoted in an article entitled "Less Than 20% of Family Offices Have Robust Succession Plans," published by Private Asset Management. The article reports on findings from a PwC survey of U.S.-based families indicating that only a small percentage of family businesses have a "robust succession plan" in place.

"Families absolutely take it seriously knowing the need for a robust succession plan, but realizing the need and putting together a well thought out and detailed plan is a different story," Beach told Private Asset Management. "There is clearly an emotional aspect in facing the inevitability of departing from the business, especially if it is the patriarch and wealth creator who built the business. They often have difficulty with no longer being in control and coming to that reality," he added.

The article also notes the challenges that families face when identifying leaders in subsequent generations. "Sitting down with the family and discussing with them a plan for the succession of the family business and the operations of the family office are very difficult decisions and for many families there is a reluctance to face the realities of that contingency planning," said Beach. "Once those plans are in place and devised another challenge we see for our clients is communicating those intentions and plans to the next generation. Communication to the family and non-family executives is so important before the events triggering the succession plan become reality."