Poor you. To hear the wealth
management industry talk, you are likely to be assailed by all manner of
calamities and misfortunes in the near future. As a member of one of the world’s loftier demographics, you
have a huge target painted on your back, and forces both seen and unseen are
conspiring to dissolve your wealth.
Two conferences I’ve recently attended side-by-side with family
office executives, private wealth managers and insurance professionals have been
rife with dire predictions. I’m sure these well-meaning folks will pass them on
to you very soon. Just to highlight the U.S. macroeconomic hazards would take
more space than this magazine provides me: We suffer a halfway-decent chance of
a recession in late 2007 or early 2008. Home prices could continue to plummet as
banks attempt to unload foreclosed homes on the open market at fire-sale prices.
The U.S. equities and bonds markets may well generate nothing better than
mediocre returns . . . for the next decade or so.
Even more sinister are the risks that affluent families face.
As baby boomers prepare to plan for the greatest intergenerational wealth
transfer in the history of the United States (some $41 trillion by 2053,
according to researchers at Boston College), they struggle with how much is too
little—and how much is too much—to leave their children.
We in the media, including those of us at Worth, are
quite complicit in creating this climate of anxiety. An old media adage holds
that greed and fear almost invariably capture eyeballs. And, to borrow from
Gordon Gekko, if greed is good, then fear is even better.
Danger is a constant drumbeat in Worth. In
April, we ran a three-page article on the top 10 concerns of ultrahigh-net-worth
families, which ranged from the muddying of a family’s legacy to exposure to
opportunistic lawsuits. In May, we published an in-depth look at the risks board
members and investors face when once-hidden environmental liabilities hammer the
companies they back. In June, we detailed how Iran’s maladroit mullahs are
threatening to sink that country’s oil industry and throw the world into a true
petrocrisis. In July, we argued that your pursuit of wealth could cost you your
health and your family ties if not properly managed.
It’s a familiar refrain, and one we will continue to sing in
coming months. Our December cover story is tentatively headlined: "Risks to Your
Wealth in 2008." And we have no plans to change it.
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