Data & Research June 11, 2008

Succession Plans Collect Dust for Ultra-HNW Business Owners

Ultra-high-net-worth business owners might have succession and estate plans, but fail to implement or update them, a study says.
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A study by the U.S. Trust, Bank of America Private Wealth Management, which provides succession planning services, found that, although a large majority of owners of ultra-high-net-worth family businesses have wealth transfer plans in place, most of these plans—both professional and personal—have lapsed.

The study, Protecting the Family Fortune, said only 15% of family-owned companies by the ultra-high-net-worth last past the second generation. More than three quarters (76%) of the surveyed business owners have succession plans, but only 38% implement them, according to a press release from Bank of America.

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Estate plans are not much better off, as the majority of owners do not update their plan enough. More than three quarters (78%) of owners have personal estate plans; however, 89% have not updated them after a life-changing event, rendering it obsolete.

Most surveyed business owners (73%) do not have asset protection plans in place at all, which the release notes could be because owners have not been educated about them. Yet, almost nine out of 10 (89%) business owners were “very” or “extremely concerned” about protecting the family’s wealth.

Conducted by Prince & Associates, Inc., and Campden Research, the study surveyed 242 second- to third-generation business owners with interests valued at a minimum of $300 million, and mean value approaching $730 million.

More information about purchasing the study is available at http://www.campden.com//ptff


Products June 11, 2008

Money Management Firm Enters the Blogosphere

Navellier&Associates decided two new financial blogs will allow them to communicate more effectively with advisers and investors.
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Navellier & Associates, a registered investment adviser (RIA) that manages about $4.5 billion for institutional and individual clients, already publishes a weekly e-newsletter, Marketmail, with market analysis and commentary. However, the firm said it was looking for a medium to facilitate unobtrusive daily contact with investors and financial advisers—and so it turned to the blogosphere a couple of months ago.

The company’s blog posts are written by the firm’s researchers and Louis Navellier, the founder and CIO. The All Cap blog informs readers about what’s driving the stock market on a daily basis, and the Market Observations blog features charts and analysis on the market.

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Although a normal part of the daily lexicon, blogs are not always clear in definition—varying in meaning depending on who is writing it. News outlets often have different standards than do personal blogs. Merriam-Webster defines a blog as “a Web site that contains an online personal journal with reflections, comments, and often hyperlinks provided by the writer.’ The Navelllier blog (http://blogs.navellier.com) appears to be generally informative and provides links to important news of the day.

A press release points out that blogging in the financial industry has been difficult because of strict SEC regulations designed to protect the market from fraudulent hype and manipulation. Founder Navellier encourages and open dialogue “so that more investors understand the nuances of the market and his investment philosophy of embracing long-term investment strategies,’ the release says. In the blog comment feature, readers can join in on the discussions taking place.

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