This month’s interview is with Lucy Birtwistle. Lucy Birtwistle is a Relationship Manager in Stonehage Fleming’s Family Office team. She assists families with their family governance and succession planning – be it regarding family wealth or family businesses.

Does communication play a big role in succession events?

Lucy: Based on our experience working with families, communication is the most important element of succession planning. Effective communication ensures family members understand each other’s perspectives, helps manage expectations across the family, and enables each individual to achieve their own personal aspirations whilst factoring in the family’s shared purpose. It’s also essential for communicating plans—where appropriate—to wider stakeholders, being aligned, and speaking with one voice as a family.

What are family constitutions?

Lucy: Constitutions—or Charters—are family documents that keep a record of agreements made by the family. But it is very much the conversations and open dialogue, or ‘journey’ that is more important than the end document. For families who wish to have a Constitution, most are morally binding documents, rather than legally binding, and it’s important to revisit them regularly to confirm they’re still relevant and that the family is living by the rules that they agreed together.

They’re particularly useful for families who own businesses together. Sections within the document might include rules on family employment within the business—what requirements and experience they need before being considered, whether they are remunerated the same as non-family employees, and who they report to—and what governance structure is in place for the family interacting with the business as family members, as shareholders and as employees.

How important is reputation?

Lucy: Reputation is crucial. It’s incredible what power the media has to influence public opinion regarding wealthy families. At Stonehage Fleming, we put a significant focus on educating the next generation about brand management and social media presence. A key example is prominent multi-generational families who have a well-known name, but possibly not the liquidity and wealth that the public perceives. This opens another question for when families may sell a business and they are therefore no longer involved in decision-making for a business that bears their family name.

How has the global pandemic influenced families?

Lucy: The pandemic has definitely prompted more conversation and better communication. It has given families more time to talk. Not only has it made parents question their mortality and encourage more open succession conversations with their children, but it’s also made them see how capable their children are whilst working from home. Additionally, it’s pushed families to focus on their social capital, helping their communities, and generally giving back to society.

What challenges could an individual face after a succession event?

Lucy: Being respected as a new ‘leader’ can be hard; families become used to patriarchy or matriarchy. It’s important to equip the future generation of leaders with the skills to handle their role, and also to demonstrate to others that they’re the right person for the job—brand management as an individual and as representative of the family. Leaders can come in many forms; people typically imagine the financial leader. But there are leaders for the family too, a vital role to bring the family together at events, manage the family brand and ensure everyone has their own voice within the family, whilst speaking externally with one voice.

Why is it important to communicate transition events to a wider audience?

Lucy: Plans usually work better when they’re well communicated and carefully thought through. Succession planning is the same—the wider stakeholders generally don’t like surprises. It’s better for them to meet the family, understand how the next generation is involved, see that they’ve got the appropriate experience, training, and education before any transition takes place. A succession event should never be an ‘event’—it should be a process, with an emphasis on overlap and learning throughout.

What risks do families face without expert guidance?

Lucy: A lack of communication risks expectations not being managed correctly. This can swing both ways. On one hand, family members can have over-inflated expectations, which might be the case when it comes to a well-known family brand with no liquidity and little inheritable monetary wealth. On the other extreme, it might mean having no expectations and therefore having no idea where to start when managing vast levels of wealth, brand, and reputation.

Lucy Birtwistle is a Relationship Manager in the Family Office team at Stonehage Fleming, working closely with international ultra-high net worth families, assisting them on a range of aspects from their everyday needs to their longer-term succession plans. Lucy is a Chartered Accountant and won the Society of Trust and Estate Practitioners ‘Young Advisor of the Year’ award 2017/18.