Jenny Tozer, Partner
“It all began with Homer, 500 years BC….” That’s not your stereotypical introduction at an evening gathering of wealth managers and clients. Sitting in the serene and stunning Kallos Gallery in Davies Street London, amongst a collection of Ancient Greek and Roman art works, we were warming up to discuss the issue of legacy. I guess in a way, all that we do at Vestra Wealth is about legacy. Creating, structuring and preserving a legacy for generations to come. Or not, as the case may be for some families.
At The Kallos Gallery we were in the presence of two specialists. An Oxford based classicist, Dr Liz Sawyer and Dr Mark Vernon, philosopher, author and writer for the School of Life.
Liz began by drawing us back to the works of Homer, to the beginning of literature. Through Homer and his works, Liz questioned what a legacy means. How do you preserve a legacy that is created by someone, often many years prior (or centuries in the case of Homer), without knowing what the creator originally intended? In wealth management, multi generational family trusts are often structured to ensure the beneficiaries can share in the income of a family legacy, without accessing or changing the legacy itself. Many endowments are also structured in this way – to provide ongoing income to support scholarships for example, the original legacy to provide for future academic study, is preserved. But for many, the legacy, especially if that involves wealth, is whittled away over the generations – from rags to riches and back again.
Perhaps as interesting, as Dr Mark Vernon pointed out, is what happens when you are the beneficiary of a legacy where there are unintended consequences. Caesar most likely did not intend for his death and legacy passed on to his sole heir, Octavian, to lead to the end of the Roman Empire, the very Empire he spent his life building. Today, clients often ask, how much they should leave to their children for fear of them leading hedonistic and unproductive lives. They don’t want their wealth to be their undoing. This can often be the case when family legacies pass from an operational concern (building a family business) to a financial concern (e.g. the sale of that business). Suddenly wealth (or liquidity) is available and this new found wealth leads to poor decision making. An extreme case was the recent tragic death of Eva Rausing, heir to the Tetra Pak business.
Perhaps because of Homer and 2500 years of history behind us, we are now making better informed decisions with whatever legacy we choose to create. There is increased interest from our clients to set up charitable foundations to align legacies with family objectives, sometimes as specific as creating a portfolio of impact investments. It might include funding for companies that reduce waste, provide educational reform, or research into child protection. A well known example is the Bill Gates Foundation which invests directly to improve child health and immunology, but it could also be as simple as supporting the local homeless shelter. Clients want their legacies to work for them, just as they have worked hard to create them in the first place.