Terrorism, climate change and pandemics are among the risk factors wealthy families should include in their strategic planning in today's environment, according to a study by the Family Office Exchange (FOX).
Those are a few of the elements that wealthy families and their advisors should consider in developing a family enterprise plan, a strategic plan covering all aspects of their lives, including family succession planning, according to FOX, a global networking and education organization that promotes best practices for planning for wealthy families and their advisors.
The other elements now included as risk factors by FOX are such things as aging populations and banking crises.
Having a strategic enterprise plan in place that considers global risk planning, as well as other family matters, helps families prepare for the future, said the study Building a Family Enterprise Plan to Deal with Future Uncertainty.
"FOX has long observed that one of the defining characteristics of families that maintain their wealth on an intergenerational basis is that they come together periodically along with their advisors to analyze their goals and shared assets in a strategic manner," the report said.
FOX has developed a risk-mapping tool to identify and prioritize the risks, and a risk roadmap that provides a checklist across four layers of risk: global/systemic, family, financial and business, and assets.
The risk-mapping tool lets family members rate such things as leadership transition and market growth or decline on scales of level of influence and level of impact to generate discussion.
"In the absence of an enterprise plan, families run the risk of not developing adequate leadership in future generations, or misunderstandings may arise about the end goals and objectives," the study said.