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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
"For wealth and business owning families and their advisers, this is the ultimate guide to getting it right."
David Chong, Group President, Portcullis (Singapore) Pte. Ltd., described by the Singapore Academy of Law as The Guru of Asian Family Offices
"Building on his previous work, The Transformative Power of Family Wealth is packed with insight and offers wealth owners powerful tools for channeling their resources into a force for good. Must reading not only for those stewards of family wealth, but for all those striving to serve them."
Amaury Jordan, CFA, co-founder of Avalor Investment (Switzerland) and TriLake Partners (Singapore)
"Philip’s book is a very worthwhile read for those who work with wealthy families. In particular, the paradigm of the Theory of Change as a mechanism to help to shape a succession planning strategy is fascinating. It is also refreshing to read a positive exposition of the role that private businesses can play in regenerating society."
John Riches, Partner RMW Law and President of the International Academy of Estate and Trust Lawyers
"With his extensive experience and deep insights, Philip’s latest book is required reading, not only for wealthy families and their advisors, but also for policy makers and thinkers as they ponder the role of wealthy families in tomorrow’s world."
Edmund Leow S.C., Senior Partner, Dentons Rodyk & Davidson LLP, Singapore
A manual for avoiding the common pitfalls of family wealth and businesses with a focus on how families can prosper while governments capture the benefits of wealth owning residents and citizens
In The Transformative Power of Family Wealth, retired lawyer, wealth advisor, and tax consultant Philip Marcovici delivers a startlingly insightful and practical discussion of how family wealth and business owners can navigate internal and external challenges and have a positive and benevolent impact on the communities around them. For governments navigating the challenges and benefits of attracting and retaining wealth owners to their countries, an invaluable resource.
The book explains how to handle the difficulties associated with generational succession, family infighting, growing societal inequality, and complex taxation regimes. It walks you through:
- How to retain and grow your family's wealth through generations so you can continue to have a positive impact on the world
- How to handle internal family “derailing” events, like divorce, mental illness, fraud, and more
- Strategies for mitigating political risk for family-run businesses with international exposure and investments
- Approaches for governments to consider, including the adoption of regenerative tax systems that capture opportunities to create vibrant economies that address growing wealth and income inequality
Perfect for owners of family-run businesses and families with wealth, as well as the professionals, advisors, and consultants who work with them, The Transformative Power of Family Wealth is a must-read for lawyers, accountants, policymakers, legislators, regulators, journalists, and anyone else with an interest in improving their understanding of the issues affecting family wealth.
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Seitenzahl: 810
Veröffentlichungsjahr: 2025
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Table of Contents
Cover
Table of Contents
Advance Praise for The Transformative Power of Family Wealth
Title Page
Copyright
Dedication
Preface
Acknowledgements
About the Author
Introduction
Chapter 1 The Theory of Change—Starting at the End and Working Back
The Apple Family
The Bird Family
The Crane Family
Dagland
The First Step—Developing the Impact Goal Timeframe
Developing the ‘Impact Goal’—What Is Our Destination?
The Impact Goal for Dagland
A Snapshot of the Full Theory of Change Approach in the Examples
Notes
Chapter 2 Applying Circular Economy Principles to Family Business and Wealth Stewardship
The Opportunities Afforded by a Circular Approach to Family Business and Wealth Stewardship
Creating a High-Functioning Family
Sustainability and High-Functioning Families
Creating Alignment Between I and We
While Valuable, Individualism Can Threaten Family Unity
Time to Rethink Family Constitutions and Related Governance Approaches
Finding Value in ‘Waste’
How Paradox Thinking Supports Circular Economy Principles
Changing Demographics and the Roles That Family Elders Can Play
Circularity and Succession Planning
Notes
Chapter 3 Understanding the World of Taxation and the Realities of Tax Transparency
Avoiding the Tax Tail Wagging the Dog
Fast-forward to a World of Tax Transparency
Can We Blame It All on Bank Secrecy and the Ways of the Past?
Abuses by Banks and Others of the QI System with Consequences That Continue Today—and Led to FATCA
Attacks on Enablers of Tax Evasion Continue
Secrecy-Based Financial Centres Have Not Helped
Tax Compliance Works Better than Tax Evasion
Not All Countries Are Ready for Tax Transparency
The Need for a Proactive Approach
How Do Tax Authorities Find Out About Undeclared Money?
Automatic Exchange of Information Backed Up by Anti-money Laundering Rules—But Do Wealth Owners Understand How Far the Rules Go?
But Again—Are All Countries Ready for Automatic Exchange of Information?
For Countries That Are Not Ready for Transparency, What Kind of Alternative Tax System Could Work?
Tax Competition, Mobility, and Countries Not Ready for Full Information Exchange
Should Tax Be the Driver in Asset Protection and Estate Planning?
Tax Evasion, Tax Avoidance and Tax Planning—and the Years to Come
Different Kinds of Tax Systems
Will There Be One Global Tax That Applies or Will Tax Competition Survive?
Countries That Do Not Impose an Income Tax
Territorial Tax Systems
Worldwide Taxation on the Basis of Residence
Tax Treaties and the ‘Tie-Breaker’ Rules
There Are Many Differences Between Worldwide Tax Systems Based on Residence
Offshore Companies and Worldwide Tax Systems
The United States and Worldwide Taxation of Citizens and ‘Green Card’ Holders
There Are Many Kinds of Taxes
Mobility and Citizenship Planning, and Fixing Historical Tax Non-disclosure
Golden Rules of Undeclared Money
Getting Out—Exits May Become Increasingly Costly
Pre-migration Planning
Notes
Chapter 4 Is Society Optional? Better Ways to Tax Wealth and Business Owners and Moves Towards Global Taxation
What Might ‘Regenerative’ Taxation Involve?
Learning from the Lost Opportunities of Others—Again, the UK Example
Recognizing the Needs of Wealth and Business Owners—and Among These Are Governments That Can Be Trusted
What Could the United Kingdom Have Done and Lessons for Dagland and Its Opportunity
The Importance of Trust and Some Comments on Global Tax Systems
Broadening the Tax Base—Examples of and for Hong Kong and Singapore and the Attraction of Returning to Gift and Inheritance Taxation
Government Policies and Action Are Critical
Why Estate and Donation Duties?
But Would Imposing Estate and Donation Duties Be a Technical Nightmare?
Can Estate and Donation Duties Be Imposed in a Fair and Effective Way with an Eye to Ensuring That Hong Kong and Singapore Do Not Jeopardize Their Attractions as Wealth Management and Investment Destinations?
Information Exchange, the Common Reporting Standard and More
Many Hong Kong and Singapore Investors Are Already Subject to Donation and Inheritance Taxes in Other Countries—Why Should They Not Have Home Jurisdiction Obligations?
The Beginnings of Global Taxation—The Future Is Here
The Global Minimum Tax—Also Referred to as GloBE and Pillar Two
Private Capital and the Global Minimum Tax
Choices That Jurisdictions Will Be Making
More in the Way of Information Exchange
Things to Consider
A Global Minimum Wealth Tax and/or Other Uses of the Global Minimum Tax Concept?
Back to the Question of Whether Society Is or Should Be Optional?
Notes
Chapter 5 Any Amount of Wealth Is Enough to Destroy a Family—Some Thoughts About the Psychology of Wealth
The Wealth Creator
The Wealth Creator’s Spouse
Ageing Relatives—Alive … and Well?
The Second Spouse
The First Mistress or Paramour
The Second Mistress or Paramour … and the First Is Not Thrilled
The Children in the Second Family
The Sons
The Daughters
In-Laws—A Broad Spectrum
The Grandchildren
The Siblings
The Friends
The Eighth Culture
Notes
Chapter 6 The Derailers—Addressing the Many ‘What-ifs?’
Knowing Where the Assets Are—And Not Having a Plan Is a Plan
Succession, Wills (Including ‘Living Wills’) and Probate
Divorces (and Relationships Generally)
Second Families
Multi-jurisdictional Families
Changing Demographics
Family Conflict Resolution
Business Succession and Family Constitutions
Doing Good—Philanthropy and Families
Privacy and Confidentiality
Investments, Liquidity and the Diversification of Ownership Structures
Tax-advantaged Investing
Asset Protection and Preservation
Art, Jewellery, Classic Cars and Other Valuable Special Assets
Political Risk
Security and Kidnapping Risks
Do I Need Separate Structures for All These Things?
Notes
Chapter 7 Bridges and Tunnels—Using the Tools of Wealth Planning to Navigate the Derailers
Wills
Trusts
Foundations
Partnerships
Companies: Offshore, Onshore and Midshore
The Family ‘Bank’
Insurance Products
Derivatives and More
Note
Chapter 8 Advisors—We Need Them but Need to Control Them
Lawyers and Accountants
Private Banking and the Wealth Management Industry
Independent Asset Managers, Multi- and Single-Family Offices
Conflicts of Interest—Everyone Has Them!
Notes
Chapter 9 Getting It Right
Stress Tests and Understanding That No Plan Is a Plan
Knowing What You Have and Where the Assets Are
Advisors, the ‘Family Office’ and Who Will Be Doing What
Communication and Avoiding Surprises
How Far Do We Go to Minimize Tax and to Protect Assets from Claims of Creditors, Spouses and Others?
Women and Wealth
What Mum and Dad Meant
The Reality of Emotions, Psychology, Ageing and Communicating with Money
Can Private Banks, Trustees and Other Advisors Get It Right?
Education Is the Key
Notes
Chapter 10 The Apple, Bird and Crane Families—and Dagland—Their Theories of Change and the Process to Get There
The Families
Holistic Continuity and Legacy Planning
The First Step—Starting at the End—And Choosing a Date!
Developing the ‘Impact Goal’—What Is Our Destination?
Inputs and Resources
Activities, Outputs, Outcomes and Impacts
The Approach for Dagland and the Opportunity for a Country to Establish Itself as a Forward-Looking Centre for Responsible Wealth and Business Owners
Dagland’s Theory of Change
Some Final Thoughts on the Theory of Change and its Use in Family Business and Wealth Continuity Planning
Notes
A Few Extracts From The Transformative Power of Family Wealth
Glossary
Index
End User License Agreement
Guide
Cover
Table of Contents
Advance Praise for The Transformative Power of Family Wealth
Title Page
Copyright
Dedication
Preface
Acknowledgements
About the Author
Introduction
Begin Reading
A Few Extracts From The Transformative Power of Family Wealth
Glossary
Index
End User License Agreement
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Advance Praise for The Transformative Power of Family Wealth
Too often, wealth is seen as a pathology that ipso facto causes destruction to our individual, relational and collective well-being. Seasoned experts, such as Philip Marcovici, however, know that the power inherent in great wealth can be used to create exceptional returns when properly understood and channelled. In his most recent contribution to the field, Mr. Marcovici provides an honest, clear and well researched roadmap for families of wealth and the professionals who serve them to use their wealth in ways to maximize their individual, relational and financial well-being.
—Dr. Paul Hokemeyer, Author of Fragile Power: Why Having Everything Is Never Enough (Hazelden, 2019) and Fragile Power 2.0: Wealth, Narcissism & Mental Health (2024, in print)
Thank you for reaching out and sharing your superb new book The Transformative Power of Family Wealth. I read it and find, as I expected, that the depth of your experience and the wisdom you have earned from your career, sing out. I am sure that for families and advisors all over the world the book will be a classic, a Rosetta stone that clarifies in a field of opacity. Please use this statement as an encomium from me for your career, not only the book.
—James(Jay)E, Hughes, Jr, Author of Family Wealth: Keeping It in the Family; co-author of The Cycle of the Gift and co-author of Family Trusts
For wealth and business owning families and their advisers, this is the ultimate guide to getting it right.
—David Chong, Group President, Portcullis (Singapore) Pte. Ltd., described by the Singapore Academy of Law as The Guru of Asian Family Offices
This fluent guide, outlining the many challenges to the successful transmission of family wealth and a variety of constructive solutions, should be helpful reading for wealth and business owning families and their advisers.
—Paul Stibbard, Former Co-chair of Baker McKenzie’s Global Wealth Management Group
In this, his latest offering, Marcovici brings his many years of experience and deep expertise to an overview not only of how families with complex wealth challenges may navigate the many issues that arise for modern wealth management but understand how individual family issues sit within a dynamic, changing world of tax policy, asset management, structured investment opportunities, and long-term planning for inter-generational wealth stewardship. By outlining a vision of strategic wealth management at the family level while connecting that vision to the global context of today’s families, Marcovici walks the reader through a variety of aspects and opportunities to be considered not only by families but those advisors and professionals working to ensure the challenges of wealth are well addressed to the benefit of today and tomorrow’s generations.
—Jed Emerson, Chief Impact Officer, AlTi Tiedemann Global
It is timely to address the “purpose of wealth” as author of The Purpose of Capital Jed Emerson said: “Human societies are now dominated by financial capitalism” and the implications of that dominance reminds us that financial capital is a social construct.
As social and environmental challenges grow, the role of wealth is evolving. Often, investors and philanthropists tend to focus on investing with returns with lesser attention to how such investment will create impact in their own, the community and the world lives. Realizing the need to first define one’s wealth with purpose, integrating in how they make investment that create the right impact, aligning it to the philanthropic endeavours is an awakening to recognise how best to using their resources for lasting impact thus shifting and reflecting with new vision and role of wealth as a tool for change and not being the servant of one’s wealth.
Philip is best placed with his vast knowledge in tax and advising global families in wealth planning over his long career and this would be another book not just a worthy reading but an inspiring tool to provoke your thinking to reconsider how you would like to set your pathway in a purposeful, mindful way in managing your wealth.
—Anthonia Hui & Leonardo Drago, Singapore
It is trite to say that our world seems more complex today. The challenges for many families (and not just the wealthy) involve a myriad of factors, including wealth preservation, succession planning, family responsibility and involvement in societal and economic development, and they are increasingly apparent.
It is not often that we read a book where what should be self-evident truths, in this instance relating to family wealth and responsibility, are highlighted and explained in a way that peels back unconscious bias that too often obscures such truths and vigorously challenges adherence to the maxim ‘‘if it ain’t broke, then don’t fix it.’’
If the reader is looking for a roadmap in this context, Philip Marcovici’s book emphasises clearly that one size does not fit all. But Marcovici does, through informed argument and numerous practical examples, provide guidance and a comprehensive structure to deal with those matters which should inform family members and their advisors of the means and actions they may take to realize the ultimate goals that the family wishes to secure for its ongoing prosperity and happiness.
In short, this book is not just about money (although finance considerations inform many decisions made in relation to family business and relations). Rather, Marcovici’s book ultimately aims to guide families in their efforts to strive towards a better life for all of their existing and future members and to consider the role they may play in helping develop a better and fairer society from which we all may benefit.
—Andrew Halkyard, Adjunct Professor, Law Faculty (retired), Hong Kong University
Building on his previous work, Philip Marcovici’s The Transformative Power of Family Wealth is packed with insights and offers wealth owners powerful tools for channeling their resources into a force for good. Must reading not only for those stewards of family wealth, but for all those striving to serve them.
—Amaury Jordan, CFA, Co-founder of Avalor Investment (Switzerland) and TriLake Partners (Singapore)
Philip’s book is a very worthwhile read for those who work with wealthy families. In particular, the paradigm of the Theory of Change as a mechanism to help to shape a succession planning strategy is fascinating. It is also refreshing to read a positive exposition of the role that private businesses can play in regenerating society.
—John Riches, Partner RMW Law and President of the International Academy of Estate and Trust Lawyers
The Transformative Power of Family Wealth is the perfect guide for wealthy family, wealth managers and family offices. Philip is a man of paradox, not a man of prejudices, which makes his views and advice unique and extremely valuable. After having identified the “Destructive Power of Family Wealth,’’ he is showing us the silver line where wealth and public good are no longer incompatible.
—Pascal Saint-Amans, Former director of the OECD Centre for Tax Policy and Administration, Professor at HEC Paris and Lausanne University
Unlike most sequels, Philip Marcovici’s second volume on family wealth does not disappoint. This time he focuses on the regenerative power of wealth for families as opposed to the destructive power covered in the first volume. And this time he broadens the scope to include countries as well as families, all with a rich intellectual underpinning in theory of change and the circular economy. It’s a compelling handbook for all those involved in building businesses, creating wealth or managing and advising on it. Drawing on his lifetime’s experience in advising global wealthy families there is both an optimistic vision of how positively things could turn out, as well as cautionary warnings on the inevitable pitfalls
—Michael Morley, Independent Non-executive Director Financial Services and Luxury Brands
With his extensive experience and deep insights, Philip’s latest book is required reading, not only for wealthy families and their advisors, but also for policy makers and thinkers as they ponder the role of wealthy families in tomorrow’s world.
—Edmund Leow S.C., Senior Partner, Dentons Rodyk & Davidson LLP, Singapore Senior Partner
Here is a book full of wisdom for wealth holders, their families and even the countries in which they reside. How fortunate to have the thoughts, strategies, and insights of a person who has had a remarkable career spanning generations of clients, a multitude of cultures, and situations as diverse as families of wealth can find themselves addressing. He addresses the fundamental questions of figuring out what your wealth is for, dealing with the dynamics of family, and recognize the benefits wealth can bring not only to families but to communities. I recommend this book to any family looking at how it can prosper and any advisor or government trying to understand the challenges and benefits of wealthy clients and citizens.
—Charles A. Lowenhaupt, Chairman & Partner, Lowenhaupt & Chasnoff, LLC, St. Louis, Missouri
An impressive work, reflecting Philip Marcovici’s deep knowledge and experience. It offers a comprehensive understanding of the broader context of policy making, the needs of wealth owners and their advisors, and proposes thoughtful, practical solutions for the systemic changes needed to create a more just and equitable world.
—Stefan Liniger, Founding Partner, Conduct, Zurich
Another Tour de Force by the author, this book comprehensively addresses all relevant issues international wealth owners and their families face. Its clear language and powerful illustrative story telling make the topics not only highly digestible but actually fun to read. Wealth owners and their advisors alike will be grateful for the existence of The Transformative Power of Family Wealth.
—Dr Britta Pfister, Founder, Britta Pfister Advisory
Wealth and business owning families, and their advisors should keep this important book close at hand. It will serve as a precious and practical guide as to how to do things the right way. Thank you Philip Marcovici for this thoughtful and comprehensive work.
—Gary J Gartner, Managing Director, Alchemy Capital Planning LLC
Philip’s new book The Transformative Power of Family Wealth is a logical continuation of his former book The Destructive Power of Family Wealth. Highly inspiring and constructive Infotainment for wealth and business owning families, their advisors and policy makers.
Wealth means responsibility – this book is perfect to get you up to speed, both technically and philosophically. A very nice read.
—Benedikt Kaiser, Kaiser Partner, Vaduz, Liechtenstein
An insightful, thought-provoking and eminently readable traverse of the key issues surrounding family wealth succession and structuring. For anyone with an interest in this area, definitely worth reading.
—Bernard Rennell, Principal, InterGen Capital Partners Limited. Former CEO HSBC International Trustee Limited and former Regional Head, Asia-Pacific, HSBC Private Bank
For wealth and business owning families and their advisors, this is the ultimate guide to getting it right. And for policy makers interested in the transformative power of family wealth an invaluable resource.
—Jefferson VanderWolk, Former Head of Tax Treaty, Transfer Pricing and Financial Transactions Division, OECD Centre for Tax Policy and Administration and former International Tax Counsel, US Senate Committee on Finance
This book is an ultimate guide to how to get it right. It is a must read for business owners, private wealth advisors, tax and estate practitioners. The book is an excellent refresher for practitioners who have been practicing for decades and a primer for young practitioners who are just starting out.
—Jacqueline Loh, Global Head of Private Wealth, Ogier Global
I have had the privilege of knowing Philip for over two decades, dating back to the early days of my legal career at Baker McKenzie. When I first heard him speak at a conference, it was clear that Philip is far more than a lawyer—he is a true thought leader. His remarkable ability to transcend the confines of his expertise in wealth management, tax, and law allows him to connect disparate ideas and anticipate emerging trends with a visionary perspective. Even then, I recognized him as a futurist, someone who intuitively grasps what lies ahead. This same foresight makes his latest book both compelling and thought-provoking yet pragmatic and helpful.
—Elena Zafirova, Founder & CEO, Dionz
Through working with wealth owning families and governments over many years, Philip shares his unequalled experience by providing a roadmap towards the goal of sustainable family models. In showing the interdependency between these families and society, Philip makes a compelling case as to how they can contribute to a better society for all, addressing issues which include wealth inequality. This book will undoubtedly serve as an enlightening guide to both professionals in the wealth management industry but also young inheritors of wealth who seek to identify the purpose of their wealth and in so doing, pursue their own sense of self-fulfilment.
—Xavier Issac, Chief Executive Officer, Accuro Trust Group
For wealth and business-owning families and their advisors, this is the ultimate guide to getting it right… By offering practical strategies and introducing frameworks such as the Theory of Change, Marcovici shows how to navigate the complexities of wealth while focusing on long-term family and societal goals. From addressing governance challenges to understanding tax systems and much more, this book provides a comprehensive roadmap for ensuring that wealth supports the family’s legacy and helps accomplish their most important objectives across generations.
—Suchi (“Shi-Chieh”) Lee, Senior Business Advisor, Retired PwC partner and former Global Leader of PwC’s International Tax Services Network
The Transformative Power of Family Wealth is a magnificently written book addressing the specific areas and needs wealthy families must address to create their Theory of Change.
Marcovici outlines the legal and practical approaches to sustain families and their business interests. Plus, and most importantly the different characteristics reflective of high functioning families.
Each chapter communicates a guide for families to embrace the sustainability of all individuals, family values and the family Road Map, including the necessary planning tools.
This is a must read to all advisors seeking to fulfil the holistic needs of the families they serve.
—Lesley Lewis, Founder, Culture3Counsel
Wealth is a magnifying glass! It shows up our weaknesses and, sometimes, our strengths. Wealth can be a positive or a negative but is never neutral. The Transformative Power of Family Wealth does not only demonstrate how wealth can be protected by reasonable means but provides a lot of advice on how families can ensure that their wealth will be uplifting. However, The Transformative Power of Family Wealth is not only for the rich. Political decision-makers and anybody interested in how tax systems can be made simpler and fairer, loopholes closed, and constructive dialogue with wealth owners undertaken, should read this book. It is an extraordinary work by an extraordinary expert! There are lessons for us all!
—Peter Hulsroj, Co-author of Essays on the Optional Society - and a Letter Concerning Inclusion
The Transformative Power of Family Wealth brilliantly captures the dynamics shaping family wealth today. With candour and insight, Marcovici thoughtfully addresses how wealth management must evolve to meet contemporary needs, offering practical strategies for resilience and prosperity in an ever-changing landscape. It is a must-read for those dedicated to effective and responsible wealth stewardship!
—Gina M. Pereira, B.A.(Hons), LL.B., TEP, Founder & Principal, Dana Stewardship Advisory
Philip Marcovici’s The Transformative Power of Family Wealth offers a compelling and practical roadmap for families to leverage their wealth in ways that benefit both their legacy and the broader society.”
—Veit de Maddalena, Former CEO of Rothschild Private Wealth and Global Partner, Non-Executive Board Member/Chair for Family Enterprises, Zurich, Switzerland
This book is the ultimate guide for all wealth and business owning families and their advisors. A dispassionate view on how to avoid the pitfalls and dangers of wealth
—Adrian Braimer-Jones, Ensof Advisory Group, London
This is an important, constructive book both for families of wealth and the societies they live in. Following its guidance will help business and wealth-owners thrive, contribute and be sustainable.
—Tom McCullough, Chairman and CEO, Northwood Family Office, and Adjunct Professor, Rotman School of Management, University of Toronto
To navigate a world of uncertainty and rapid change, a wealth and business owning family needs both a north and a compass to guide its decisions. This new book offers constructive advice as well as an innovative ‘‘Theory of Change’’ approach that can help both the family and their advisors to gain clarity on both the here and now.
—Etienne Eichenberger, Managing Partner, WISE Philanthropy Advisors
Complementing Philip’s previous book (The Destructive Power of Family Wealth), The Transformative Power of Family Wealth explores the symbiosis and positive potential of private wealth both for wealthy families as well as functioning society. Borne from a career of experience working with some of the wealthiest global families as well as governments, Philip’s easy writing style combined with frank analysis, references to real-life situations and (importantly!) humour, makes his book not only invaluable reading for industry professionals but also (and perhaps more critically) to members of wealth and business-owning families themselves.
—Simon Michaels, Vice Chairman, CEO and shareholder of Camelot Trustees, Singapore
I cannot imagine a more complete, authoritative and common sense overview and guide to all the key issues and challenges facing wealth and business-owning families and their advisors around the world, and how to address them.
—Markos Komondouros, Founder and partner, Investing For Purpose
For wealth and business owning families and their advisors, this is the ultimate readable in depth guide to getting it right. Unlike other publications in the field, it’s truly all embracing, covering not just the essential legal and tax factors but even more importantly the vital steps needed to make sure that the family’s collective aims and members’ well-being are properly determined, articulated, implemented and protected. It truly is a tour de force.
—John K. Connor, Former long-time Baker McKenzie International partner, Sydney, Australia
A must read for wealthy families and their advisors, especially where impact goals and supporting strategy is not yet clearly defined. We have applied the approach of the author with a number of families and it is simply a game-changer.
—Roman Marti, Zurich, Switzerland
The Transformative Power of Family Wealth
HELPING FAMILIES AND THEIR COMMUNITIES CAPTURE ITS REGENERATIVE POTENTIAL
Philip Marcovici
This edition first published 2025
© 2025 Philip Marcovici. All rights reserved
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To my own family and to the many families I have been fortunate to work with and learn from over the years.
Preface
Eight years ago, I completed a book entitled The Destructive Power of Family Wealth: A Guide to Succession Planning, Asset Protection, Taxation and Wealth Management.1 Published by Wiley, the publisher of this new book, my earlier book was my opportunity to share my experience in working with wealth owners around the world and their advisors. The Destructive Power of Family Wealth was also an opportunity to put into writing some of the thoughts that I had been sharing with students in my teaching over the years.
This book is designed to provide both an update to my earlier work and a roadmap to not only how the destructive power of family wealth can be avoided but how family wealth and business ownership can be constructive—for the families involved, for their business and wealth interests, and for their communities, firms and planet. In relation to the latter, my focus is not only on how wealth-owning families can themselves navigate towards a happy and successful future, but how our societies can benefit from the ability of wealth-owning families to contribute to a better world.
I strongly believe that holistic sustainability can be achieved by both wealth and business owners and the societies with which they interact. If planning focuses on the longer term and specific steps are taken by stakeholders, not only can the destructive power of family wealth be contained, but benefit can be achieved for individual family members, families as a whole (including their business and investment interests) and society.
While this book retains content from The Destructive Power of Family Wealth, it purposely provides less of a technical focus on tax and other regulatory areas—leaving my earlier book as a resource on these, among other, topics.
Now retired from practising law, I spent my career as an international tax and private client lawyer, working with families, businesses and the wealth management industry, first in New York and Vancouver, and then in Hong Kong and Zurich. I have also worked with governments seeking to address the global problem of undeclared funds, and have taught widely in Asia and Europe, learning while sharing my views on the potentially destructive nature of wealth and the failings of the wealth management industry and of advisors to truly help the families they are meant to serve.
Since retiring, and from bases in Hong Kong and London, I have continued to work with global families on their holistic continuity planning. This involves helping families to formulate their vision for the future and take the steps necessary to help make that vision a reality.
I have also continued to work with governments, now more on approaches that might be taken to better engage with wealth-owning families to the benefit of society. In my teaching, I have, among others, been collaborating with Cambridge University and the Cambridge Institute for Sustainability Leadership (CISL) on programmes oriented to helping wealth and business-owning families identify the roles they can play in the development of sustainable economies and how a focus on sustainability can help families and their business and investment interests be better positioned to achieve long-term continuity and success.
A concern I have had for many years relates to the misunderstandings that exist in relation to the positive role wealth and business owners can and do play in society. I have observed a number of countries, particularly in recent years, failing to evidence an understanding of the benefit effective engagement with and support of wealth and business owners can result in. My teaching and writing are increasingly oriented to the considerable opportunities that are being missed. It is my hope that this book will be read not only by wealth owners and their advisors, but also by those concerned about growing inequality and sustainability generally, and who might benefit from a better understanding of the positive contributions wealth and business owners can make to societal wellbeing.
Journalists, governments and many others can themselves contribute to a better world through an appreciation of the force for good that wealth and business-owning families can be. It is easy to bash the wealthy, but it is more effective to harness their ability to contribute—and not only financially.
I began working with wealth-owning families on their succession and other needs early in the 1980s, in Hong Kong. Having studied law in both Canada and the United States, I had started out as a corporate tax lawyer in New York, and then moved to Hong Kong where I spent twelve years practising law. The 1980s and early 1990s were interesting times in Hong Kong. Pretty much the most capitalist place in the world was soon to revert to pretty much the most communist place in the world. China was negotiating the return of Hong Kong to China by the United Kingdom, which had been governing Hong Kong under treaties that, in part, were coming to an end after a term of ninety-nine years. The handover of Hong Kong to China was ultimately agreed between Margaret Thatcher and Deng Xiaoping and took place in 1997.
In the run-up to 1997, many of Hong Kong’s wealth-owning families began restructuring their businesses in view of perceived political risk and sought second (and third and fourth) citizenships and places of alternative residence. My work moved from being work for companies on their tax affairs to work for the owners of companies looking more comprehensively at their situation, mixing in issues of political risk and asset protection with tax exposures in the United States and elsewhere associated with cross-border investment and new residences and citizenships. Many of the wealth owners in Hong Kong came from families who had fled China on the arrival of the communists and who suffered the expropriation of their businesses and many other challenges. They were not about to let themselves lose everything again.
My work with families in relation to their personal and business assets and the protection of wealth led me to work with the wealth management industry—the providers of asset management services, trusts and other ‘tools’ of wealth planning. Something I learned early on is that the industry all too often does not meet the comprehensive needs of the clients it serves. This led me to become active in training and education and to work on strategies for private banks and others interested in greater alignment with the needs of their clients. But overall, I was working in a major growth industry that was to me surprisingly chaotic (and often unethical) in its management and delivery of services.
In the mid-1990s, I moved to Switzerland, where I spent 15 years working with private banks, trust and insurance companies and the global families that use their services. With young children, we were looking for a clean place to live given growing pollution in Hong Kong. A partner of an international law firm, I had the opportunity to look at a map and broadly choose where I wanted to spend the next years of my career. We arrived in Zurich and found the clean place we were looking for—air that was broadly unpolluted, a lake that could be swum in and a population surprisingly obsessed with cleanliness. One of our many challenges in adapting to Switzerland related to the complexities of throwing out garbage, navigating a system that combined charges for unsorted waste and the encouragement of free recycling.
But while Zurich and Switzerland were certainly clean places, this was pretty much only from the point of view of the environment. While I was not naïve when arriving in Switzerland, I was still shocked at the unclean nature of the Swiss financial centre and, in particular, its wealth management industry. Now forced to change, the Swiss were, to me, clearly abusing their role as global champions of privacy, ignoring the real needs of their clients, which in my view include ensuring that families play by the rules of their home countries of residence and investment—including by the tax rules of those countries. While tax evasion is a global problem and the role of the wealth management industry in facilitating tax evasion is and was by no means limited to Switzerland, I believe that Switzerland, as the dominant player in the wealth management industry, had the opportunity to take leadership in addressing the issue. Instead, Switzerland and many other secrecy centres misled their clients into believing that secrecy could be the solution to all problems.
Today, we are in a changed world. Not only in Switzerland, where tax compliance and transparency are (or certainly should be!) at the top of the agenda in the wealth management industry, but around the world. Data leaks have contributed to change, but the shift from an opaque world to one that is increasingly transparent is taking time, and the road for many wealth owners continues to be a rocky one. Switzerland failed to take the global lead it could have on the issues of undeclared money, and today there remain, surprisingly, advisors and other intermediaries who continue to mislead families into thinking that hiding money is good planning. The United States is a particularly egregious offender, particularly given the way it has sought to protect its own tax revenues through aggressive attacks on Switzerland and others while preserving the ability of its banks and corporate service providers to market secrecy over substance. In the years that have passed since the writing of my earlier book, the misuse of the United States by those seeking to hide wealth has, in my view, only increased, to the detriment of the countries the tax laws of which are being evaded.
I believe that the misuse of bank secrecy and the now somewhat historical focus on tax evasion practised by key wealth management players globally has cost our society dearly and in many ways. Rather than helping to focus attention on the benefits societies can achieve through close collaboration with wealth and business-owning families, the interests of each diverged. The wealth owners increasingly feared governments and the political landscape moved increasingly to a bashing of the wealthy and to a focus on the realities of growing income and wealth inequality. Would a more transparent world and one where wealth owners could really trust governments have produced a better result? Are there ways to get on to the right track to more effective collaboration and the symbiosis that can be achieved through alignment of interests of wealth owners and society?
In my experience, too many families have failed to understand their own planning needs and the conflicts of interest their advisors and banks have. Many of the families I have come across have neglected to focus on the critical issue of succession—in part due to an obsession with secrecy and an over-emphasis on tax exposures. Tax enforcement is a reality, with many developments that have changed the ways of the past and continue doing so. Notwithstanding these changes, I continue to have a real concern that families do not put enough emphasis on the key issue they need to address—will wealth destroy their family?
In the 1980s, a common line of thinking among my clients and friends in Hong Kong and the region was that things were different for Chinese families. I was told that I did not understand that the Chinese were close and loving families, where succession would never be something that would end up destroying the family and relationships, unlike the case of litigious Westerners lacking the respect for the older generation that the Chinese have. I later ran across Latin American families arguing a similar theme of love and devotion (and music) making them different. The sad reality, proven over and over again by the many disastrous fights among Asian, Latin American, Middle Eastern and other families of late, is that all families are the same—the children, holding hands, arrive at their parents’ home for dinners and lunches, and after the passing of their parents all too often end up enriching lawyers happily fuelling the flames in disputes over murky succession arrangements left by the older generation.
There is no question that religious and cultural issues impact how families work and the succession process ensues. But no family is immune to the dangers that wealth can result in, or the relatively new challenges associated with all of us living longer and the demographic changes that result. If Mum or Dad lives to 105, does that mean I inherit when I am eighty? And what of the growing incidence of dementia and all the problems that come with it?
Are these only a problem of the ‘wealthy’? For me, the answer is no—all wealth owners, meaning anyone who owns anything of value that may pass to the next generation or to others, have the potential to destroy their families through the succession process. In fact, families who have relatively little in the way of assets have a particular responsibility to ensure that what they have and hope to use to enhance the lives of the next generation does not end up in the wrong hands or result in the destruction of family relationships.
Who really is wealthy is, in any case, a very subjective thing—what is a fortune to one person may be a pittance to another. And there is a sad reality that human nature seems to make people think they always need more than they have to really be ‘rich’. In the end, we do need money to survive, but how much is ever enough? Does wealth really create happiness? Or does it too often create unhappiness?
Perhaps the comedian Spike Milligan was right in saying ‘money can’t buy you happiness… but it does bring you a more pleasant form of misery’.
Was Spike Milligan too cynical? Is there a way to avoid the destructive power of family wealth? This book will explore possibilities for success—not only for the families involved, and for their businesses and investments, but for society as a whole.
Note
1
.
The Destructive Power of Family Wealth: A Guide to Succession Planning, Asset Protection, Taxation and Wealth Management
(Wiley, 2016).
Acknowledgements
I have many to thank for their support and input in my writing of this book. Over the last forty odd years, I have enjoyed a career that has allowed me to learn from the wisdom and experience of others and for this I am most grateful.
I shared an early draft of this book with a number of friends and colleagues and am most appreciative for the time and attention that was invested in providing me with comments that helped shape this book. While I have reflected many of these comments in this book, any errors are mine alone.
I have to particularly thank Peter Hulsroj, my law school classmate and himself an author, for his very careful review of my draft and the precise and useful input he provided. Good to know that Danes are better at writing English than Canadians like me.
Among others who provided me with great insights and edits were Stefan Liniger, with his emphasis on the need to explore the necessity for wealth-owning families to critically reassess their social role and responsibilities; Jed Emerson, for his plea that I turn the book into a call to arms for change and a reflection on the connection between how families experience the world and how the world policy framework is established; Jay Hughes, for his inspiring leadership in the field of family business and his insightful comments; Sammy Lee, for his brilliant ideas on how family businesses can learn from each other and from Asian perspectives in particular; Paul Stibbard, for his clear explanations of Islamic law; Pascal Saint-Amans, for his friendship and for his work in helping to address the challenges in fair taxation for our world; my childhood friend, Gary Gartner, for his thoughtful insights and deep knowledge of international taxation and for inspiring me to take up tax law; Amaury Jordan, for complaining about the length of the book (and more seriously, for the value of his input); Adrian Braimer-Jones, for his emphasis on the importance of families keeping it simple; Tom McCullough, for his helpful edits and advice; and Dr Paul Hokemeyer, for sharing his experience in dealing with the complex mental health issues families of wealth face.
Markos Komondouros, Britta Pfister, Andrew Halkyard, Simon Michaels, Lesley Lewis, Suchi Lee, Edmund Leow, Charles Lowenhaupt, Benedikt Kaiser, Bernard Rennell, Jeff VanderWolk, Jacqui Loh, Elena Zafirova, Xavier Issac, Roman Marti, Etienne Eichenberger, Veit de Maddalena, Gina Pereira, David Chong, Anthonia Hui, Leonardo Drago, John Riches, Michael Morley and many others also provided input on my early draft of this book.
John Connor, a mentor and friend, provided me with the opportunity to develop as an international tax lawyer and I thank him for this as well as for his insightful comments on my draft of this book. In 1982, John, an inspirational leader and the founder of a number of Baker McKenzie's Asian offices, had me join the Hong Kong office of the firm and embark on my journey as an advisor to wealth and business owning families.
And particular thanks to my wife, Peggy, for not only reading and commenting on my drafts, but for her well-founded challenges to some of my thinking. Peggy, and my sons Joshua and Luca, are inspiration and support.
About the Author
Philip Marcovici is retired from the practice of law and consults with governments, financial institutions and global families.
Philip practised in the area of international taxation in Hong Kong and Zurich as well as in New York and Vancouver.
The author of numerous publications, Philip is also the author of The Destructive Power of Family Wealth, published by Wiley.
A graduate of Harvard Law School and the law school of the University of Ottawa, Philip is a member of the Advisory Committee of the Hong Kong University of Science and Technology’s Roger King Center for Asian Family Business and Family Office and a founding advisor to the Cambridge Institute for Sustainability Leadership in relation to programmes oriented to business and wealth-owning families and the contributions they can make to a more sustainable society.
Philip is a consultant to the CFA Institute in relation to private wealth management matters and is a co-author of readings on the subject in the CFA curriculum.
Introduction
This book is designed to share my experience in working with families and their advisors around the world. The book also reflects my work over the years with governments on tax and other policies relating to wealth and business owners and is designed to assist in necessary conversations about how our societies might better engage with wealth and business owners to help address, among other things, the realities of income and wealth inequality. The symbiotic relationship between wealth ownership and society is under constant challenge and questioning—something that is unhealthy in the absence of a clear vision of the end goal and what can be achieved if outcomes are optimized.
Wealth and business-owning families have much to contribute to society and where the family itself is strong and sustainable over generations, this contribution can be all the greater. The synergies that can be enjoyed where a family works on its own sustainability through a focus on what the family can do for others—stakeholders including employees, community and society—are exciting and real.
While my professional experience has been primarily oriented towards families at the upper end of the wealth spectrum, I am absolutely convinced that wealth can and does destroy any family, no matter what the level of wealth involved. A single asset, whether a piece of jewellery, a sum of money or a small property, can carry with it enormous importance to the younger generation—whether due to its value or for sentimental and emotional reasons or, as is more likely, both. How wealth transfers from one generation to the next, who gets what and when, carries messages that are remembered, rightly or wrongly, as being what the transferor ‘meant’. Gifts of one asset to a son and another to a daughter may be well intended but may also end up leaving one of the children with a wrong sense that they were less loved than their sibling.
I hope that this book will also be a guide to those beginning their careers in the wealth management industry, and that it will help them understand the real needs of their clients, leading them to become effective, trusted advisors. For the more experienced advisor, this book will, hopefully, help make them even more effective in their work with families. And for advisors to wealth-owning families, I hope to encourage a way of thinking that supports the notion that wealth-owning families have responsibilities to society that go along with the benefits of wealth. This does not need the resistance that the idea might give rise to: wealth-owning families can come to the realization that a focus on what they can contribute to societal wellbeing can be critical to the family’s own long-term success and sustainability.
This book begins in Chapter 1 with an introduction to the Theory of Change as a methodology that can be used to help address the destructive power of family wealth. The Theory of Change is about working hard to develop a clear vision for the future and then work backwards to identify the steps necessary to ensure that the desired outcome and destination will be reached. In the context of families, this means developing clarity on the envisioned ecosystem for both the family and its business and investment ‘engine’ in the future. We then work backwards, identifying the derailers that can block the progress of the family—internal disputes, political risk, taxation, lack of adequate preparation of family members for their roles, poor succession planning and many other challenges. The focus is then on the actions, inputs and outcomes that can lead to long-term positive outcomes for both the family and its wealth and business interests.
The Theory of Change can also be a methodology for governments to use to help focus on what can be done to capture the symbiosis that can be achieved between society and wealth and business owners. A focus on the end goal can provide a clear roadmap to the inputs and actions that need to be put in place today.
Once I have introduced the Theory of Change as a methodology, the balance of the book fits into discussion of some of the relevant actions, inputs and outcomes that might be considered. This begins in Chapter 2 with a look at how circular economy principles can be applied to family business and wealth. The circular economy, in large part, is about focusing on manufacturing processes and ensuring that resources are not only not wasted, but that value be found in resources that might otherwise go unused. This chapter of the book discusses how this thinking can apply to families and their wealth and business interests and how important it is that a family focus on its own sustainability before considering how the family can best contribute to society and wider community sustainability objectives.1
In Chapter 3, the book then addresses the world of taxation and the realities of tax transparency—an area that is often so complex that, despite its importance, those affected do not sufficiently understand how tax systems work. My intention is not to turn readers into tax experts, but rather to help them better understand not only how tax systems affect them, but how tax systems could evolve, for better or for worse. There are risks for wealth and business-owning families given the direction of tax systems. And there are even bigger risks, in my view, for our societies if more effective (and simpler) ways of taxation that respect the constructive power of family wealth are not developed.
A discussion follows in Chapter 4 on the possibility of there being better ways to tax wealth and business owners given, among others, the realities of growing inequality and the need for responsible wealth and business stewardship. Here the question of whether society is optional for anyone comes up. While it is true that those with meaningful resources can choose where to live and work, there is a reality that our small planet does not allow society to truly be optional, even for the wealthiest among us. But optionality is a critical check on governments that must be maintained—how do we find the right balance and determine what is and what is not optional?
In this book, I attempt to address the topic of taxation in a less technical way than I did in The Destructive Power of Family Wealth. I also extend the discussion to outline the past, present and possible future of taxation, with suggestions for both those owning wealth and governments seeking better ways of addressing their policy and revenue needs. But in a discussion of taxation and more effectively taxing wealth and business owners, the important question of whether governments are failing to meet the needs of these taxpayers, to the detriment of their economies, arises. Tax policies might benefit from thoughtful approaches to providing value to the wealth and business-owning community in exchange for that community’s important contributions to a well-functioning society and economy.
International taxation was the primary focus of my career, and clearly tax issues are relevant to most families considering the succession process and the protection of their wealth. Tax laws are ever changing, and in too many countries unfair approaches to taxation are part of the political risk, making the navigation of the tax world
