{"id":3406,"date":"2024-06-28T14:22:23","date_gmt":"2024-06-28T14:22:23","guid":{"rendered":"https:\/\/www.iuf.li\/?p=3406"},"modified":"2024-06-28T14:23:07","modified_gmt":"2024-06-28T14:23:07","slug":"wealth-preservation-in-a-new-world-of-intensifying-regulation","status":"publish","type":"post","link":"https:\/\/www.iuf.li\/en\/publications\/wealth-preservation-in-a-new-world-of-intensifying-regulation\/","title":{"rendered":"Wealth preservation in a new world of intensifying regulation"},"content":{"rendered":"\n

On the occasion of this year's Wealth Solutions Forum in Singapore, organised and hosted by Hubbis<\/a>, H.S.H. Gisela Bergmann, Princess of Liechtenstein,<\/a> CEO and Managing Director of Industrie- und Finanzkontor<\/a>, addressed the significance of private wealth. We are pleased to share her speech below, kindly summarised by Hubbis: Michael Stanhope<\/a>, Michelle Stanhope<\/a> and Linh Nguyen<\/a>.<\/em><\/p>\n\n\n\n

In the ever-evolving global wealth management landscape, the challenges around preserving wealth across generations have never been more pronounced. H.S.H. Gisela Bergmann, Princess of Liechtenstein and CEO and Managing Director of Industrie-und Finanzkontor Etablissement provided a fascinating exploration of this topic at the Hubbis Wealth Solutions Forum in Singapore on June 5. Her presentation was replete with historical perspectives informing the current advice and services her firm offers. She provided delegates with an insightful talk focusing on contemporary relevance and solutions for preserving and transitioning family wealth in the \u2018new\u2019 world of intensifying and ubiquitous global regulation.<\/strong><\/p>\n\n\n\n

The Timeless Challenge of Wealth Preservation<\/strong><\/p>\n\n\n\n

Princess Gisela began her talk with a poignant reminder. \u201cMany people have the ability to amass a fortune,\u201d she said. \u201cHowever, it is of little long-term use and benefit to society if one does not have the wits and ability to preserve it.\u201d This adage set the stage for her narrative on the multifaceted nature of wealth preservation, drawing on her own family\u2019s nearly 900-year history and the principles upheld by the House of Liechtenstein.<\/p>\n\n\n\n

Historical Lessons and Modern Realities<\/strong><\/p>\n\n\n\n

To illustrate the challenges of wealth preservation, Princess Gisela contrasted her family\u2019s long history with that of the Vanderbilts. Cornelius Vanderbilt, once one of the wealthiest individuals in the US, saw his fortune dissipate within a few generations. One of his most famous quotes was: \u201cAny fool can make a fortune. It takes a man of brains to hold on to it.\u201d But that wisdom did not endure through the generations \u2013 by the sixth generation, the once-vast Vanderbilt wealth had all but vanished. This sort of decline, she noted, often stems from a lack of responsibility and overreliance on existing wealth\u2014a phenomenon sometimes referred to as the \u201cspoiling effect\u201d.<\/p>\n\n\n\n

Similarly, the \u201cBuddenbrooks Effect,\u201d a concept derived from a fictional German family saga, echoes this theme. The story depicts how the first generation builds wealth, the second manages and grows it, and the third squanders it, leaving the fourth with nothing. Despite its fictional origins, this narrative resonates with many real-world families, highlighting the crucial role of strategic wealth preservation.<\/p>\n\n\n\n

Holistic Wealth Preservation<\/strong><\/p>\n\n\n\n

Princess Gisela observed how wealth preservation therefore needs to extend far beyond mere asset management. It should involve a holistic approach that addresses both material and immaterial aspects of wealth. This comprehensive view includes family values, education, health, and culture, which may have a more enduring impact on wealth preservation than financial assets alone. Drawing on her own family\u2019s experiences, she noted that these \u2018immaterial\u2019 assets enabled them to rebuild material wealth despite historical challenges such as expropriations.<\/p>\n\n\n\n

The Threats to Wealth in Today\u2019s World<\/strong><\/p>\n\n\n\n

Wealth preservation today faces numerous threats, both internal and external. Internally, among other risks, the spoiling effect and misunderstandings about wealth responsibilities can erode fortunes. Externally, economic and political risks, such as high national debt levels and potential state expropriations, pose significant threats. Additionally, the increasing demand for transparency and the declining value placed on privacy can jeopardise wealth in a world where it is increasingly often met with envy rather than admiration for the work that lead to a fortune.<\/p>\n\n\n\n

\u201cUnfortunately, therefore, our world is no safe haven for wealth, but with the correct measures it can be,\u201d Princess Gisela explained.<\/p>\n\n\n\n

\u201cPrivate wealth is an important cornerstone of economic and societal well-being whereby family businesses are the backbone of any prosperous economy.\u00a0On a personal level, wealth also provides freedom as long as one understands that wealth also requires you to take responsibility.\u201d<\/strong><\/p>\n\n\n\n

The Role of Liechtenstein in Wealth Preservation<\/strong><\/p>\n\n\n\n

She explained that Liechtenstein today stands out as a premier hub for wealth preservation, thanks to its stable and flexible legal framework for foundations, trusts, and holding companies. With nearly a century of foundation and trust law, coupled with economic, political, and social stability, she believes Liechtenstein offers an unparalleled environment for safeguarding wealth. The absence of a law against perpetuity, the country\u2019s AAA rating as well as no national debt further underscore its suitability for long-term wealth preservation.<\/p>\n\n\n\n

Foundations and Trusts: Tailored Solutions for Wealth Preservation<\/strong><\/p>\n\n\n\n

Princess Gisela highlighted the importance of trusts and foundations in modern wealth preservation. These structures provide flexibility, allowing for estate planning that spans several generations and mitigates both internal and external risks. Each trust or foundation is bespoke, and tailored to fit the specific needs and circumstances of the family and assets involved. This customisation ensures that founders can maintain control (if so wished) and governance, protecting their wishes and assets against risks, such as divorce, social turmoil, and more.<\/p>\n\n\n\n

Conclusion: The Path Forward for Wealth Preservation<\/strong><\/p>\n\n\n\n

Princess Gisela concluded her presentation by reiterating the critical need for a holistic and strategic approach to wealth preservation. As wealth managers and fiduciaries, understanding the interplay between material and immaterial assets is crucial. Long-term wealth preservation is about managing assets and fostering family governance, legal and tax planning, and philanthropic initiatives that align with the family\u2019s values and legacy.<\/p>\n\n\n\n

In a world where private wealth faces unprecedented threats, the insights shared by Princess Gisela offer a valuable framework for navigating these challenges. Her emphasis on the principles of responsibility, education, and cultural values provides a roadmap for families seeking to preserve their wealth across generations. As the conference attendees reflected on her words, it was clear that the multi-generational experience of the House of Liechtenstein<\/strong><\/a>, coupled with contemporary fiduciary practices, offers a robust perspective and foundation for enduring wealth preservation.<\/p>\n\n\n\n

View the article and additional insights at Hubbis' website<\/strong><\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

On the occasion of this year's Wealth Solutions Forum in Singapore, organised and hosted by Hubbis, H.S.H. Gisela Bergmann, Princess of Liechtenstein, CEO and Managing Director of Industrie- und Finanzkontor, addressed the significance of private wealth. We are pleased to share her speech below, kindly summarised by Hubbis: Michael Stanhope, Michelle Stanhope and Linh Nguyen.\u2026<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_seopress_robots_primary_cat":"none","_seopress_titles_title":"The crucial role of strategic Wealth Preservation","_seopress_titles_desc":"H.S.H. Gisela Bergmann, Princess of Liechtenstein, addressed the significance of private wealth at the Wealth Solutions Forum in Singapore on June 5, 2024.","_seopress_robots_index":"","footnotes":""},"categories":[57,61,62,60,58],"tags":[],"class_list":["post-3406","post","type-post","status-publish","format-standard","hentry","category-asset-protection-c","category-foundation","category-industrie-und-finanzkontor-c","category-liechtenstein-financial-centre-c","category-wealth-preservation-c"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.iuf.li\/en\/wp-json\/wp\/v2\/posts\/3406","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.iuf.li\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.iuf.li\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.iuf.li\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.iuf.li\/en\/wp-json\/wp\/v2\/comments?post=3406"}],"version-history":[{"count":0,"href":"https:\/\/www.iuf.li\/en\/wp-json\/wp\/v2\/posts\/3406\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.iuf.li\/en\/wp-json\/wp\/v2\/media?parent=3406"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.iuf.li\/en\/wp-json\/wp\/v2\/categories?post=3406"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.iuf.li\/en\/wp-json\/wp\/v2\/tags?post=3406"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}