Partner Patricia Woo unravels the intricacies of family dynamics and the psychological implications of inheriting vast wealth. This article was originally published in Hubbis on August 16, 2023 and is reposted with permission.
The opulence of the ultra-wealthy often overshadows the intricate fabric of challenges they face behind closed doors. While investments and succession plans take center stage in public discourse, there's an underbelly of intergenerational conflict and emotional turmoil that remains largely unspoken.
We've often heard about the investment and succession plans of the ultra-wealthy, but beneath these topics lies a more intricate issue: intergenerational conflict. At the heart of these disputes could be differences in ideologies, divergent perspectives, or simply familial squabbles. So, what draws Woo to this area of research? And why should it matter to any wealthy families or their advisers?
Woo recalls a poignant moment when one of her long-standing clients, also a close family friend, approached her seeking guidance. The client felt overwhelmed by the immense wealth bequeathed to her and felt ill-equipped to handle it. Sensing her distress, Woo saw an opportunity, not just for academic exploration but for personal connection. She proposed a research collaboration, offering her client the chance to share her experiences in hopes that the process might also help her self-reflect and fill the gap of this under-researched area.
Sharing her own story, Woo remembered when, at the age of 26, her father had entrusted her with money to invest in a well-known mould-making and die-casting company in Hong Kong. Unfortunately, the investment soured, and she bore the burden of the loss. Her father's understanding response was a balm, but the weight of that failure stayed with her for years. This personal experience resonated deeply with her client's struggle, emphasizing the universality of such challenges and the emotional toll they take.
While there's research on wealth from a quantitative perspective, often undertaken by banks and financial institutions and academicians, there's a palpable absence of qualitative, human-centered research. Woo emphasizes the importance of deeply engaging conversations which not only unpack the situation but the emotions, intuition and life-impacting ramifications as well. Through her research, one of the many findings she discovered is that many inheritors of family wealth often felt unprepared or overwhelmed by the responsibility thrust upon them.
Looking more closely at the impact of family dynamics
In this study conducted by Patricia Woo using the transpersonal method of Heuristic Inquiry, she delved into the complex dynamics of high-net-worth families and the challenges faced by individuals inheriting substantial wealth. The study, although involved only six participants based in Hong Kong, shed light on the intricate web of family relationships influenced by affluence.
“Four out of six participants identified family dynamics as the root cause of their negative experiences,” Woo noted. “Whereas the others cited external events tied to the family business or wealth.” One concerning observation from the research was the potential negative impact of wealth on family relationships. This disruption often manifested in the form of intense sibling rivalry, a phenomenon exacerbated in families with both full-siblings and half-siblings.
Woo emphasized the primary issues these inheritors confronted.
“The recurring themes were competition for family resources, high expectations from the wealth generator or controller, and a distant emotional bond with parents,” she explained.
This often led to feelings of resentment and isolation among the heirs.
The emotional turmoil was palpable. Woo shared, “I was struck by how anger emerged as the predominant emotion, especially among those subjected to forced competition and demanding expectations.” Many participants expressed their frustration with the strategies employed by their parents, perceiving them as tactics to exert control or instil drive.
Woo's study also ventured into symbolic, intuitive associations. When asked to liken their perception of wealth to animals, a majority of participants leaned towards aggressive creatures. However, a glimmer of positivity shone through as some drew parallels with empowering spiritual animals, like the Phoenix.
Reflecting on her findings, Woo remarked, “Despite the challenges, it’s heartening to see that by the study's conclusion, most participants believed the benefits of wealth overshadowed the negatives.” Moreover, many expressed a resolve to handle their inheritance more adeptly and pass down healthier financial perspectives to the next generation.
The study underscores the need for a nuanced understanding of wealth's impact on familial relationships, emphasizing the importance of fostering healthier dynamics in affluent families.
A more nuanced approach
When individuals encounter a need in the realm of investments, legal challenges, or tax considerations, the route is relatively clear. As Patricia put it, “when a client needs investment advice, they typically approach an investment advisor, and for issues like divorce or wealth structuring, lawyers or tax advisors are the go-to professionals.”
However, when it comes to the more nuanced emotional and relational challenges tied to wealth, the path to assistance becomes murkier. Addressing this, Patricia Woo, a seasoned advisor, said, “A significant portion of my clientele brings these softer issues to me. Our discussions often delve deep, shedding light on negative patterns.”
Woo, who has been trained not only in transpersonal psychology but also individual and family psychotherapy, emphasizes the importance of adopting a holistic approach, combining formal family constitutions with introspective sessions. She explains,
“It’s about understanding underlying emotions and working to improve familial ties. Not every advisor may be inclined to provide this depth of service, but it's crucial.”
Highlighting the importance of personal introspection and professional support, Woo suggests, “Individuals could greatly benefit from therapists, counsellors, and even spiritual healers.” She further encourages individuals to engage in practices such as mindfulness and focusing. “These are powerful techniques to understand oneself better, requiring no external consultation fees. Ultimately, cultivating self-awareness not only benefits the individual but can also positively impact familial relationships.”
This perspective underscores the significance of addressing both the tangible and intangible challenges associated with wealth, advocating for a blend of professional guidance and personal growth. Woo mentions that even though we regularly use the term Know Your Client (KYC) in private wealth, in her experience most advisers don’t ask enough questions and really have no real understanding of the clients actual issues.