The desire to pass on family wealth to the next generation is the most natural human instinct, but the legal and financial practicalities are becoming ever more intricate, especially for wealthy individuals.
Succession planning needs to take into account a number of issues: families can be a large and complex web of relationships, with members living in several different countries; growing life expectancy means succession is delayed and wealth has to last for longer; and the wealthiest families may also want to secure the future not just of the next generation, but those following.
The complexity of these issues means that family heads need at their side financial professionals with the expertise and foresight to establish a sustainable wealth planning strategy, built on global, tailored life insurance with the greatest possible adaptability, using long-term solutions and monitored on an ongoing basis. The strategy must be flexible enough to accommodate whatever the future may hold for the client, both to protect their wealth and transfer it to the next generation.
Traditional life insurance is often limited to selling and servicing unit-linked life insurance contracts, but sustainable wealth planning is an integrated and holistic approach to accompanying wealth managers and their clients into the future.
Véronique Simonin, Head of sales & strategic key partner management at Swiss Life Global Solutions, says: “With enhanced life expectancy, planning for the future requires new perspectives. Wealth planning must be sustainable and flexible, always working toward freedom of choice. This becomes more difficult as personal and business finances are exposed to different and evolving legal frameworks and regulations.”
Swiss Life’s expertise and capabilities are geared to complex situations involving multiple jurisdictions. Says Simonin: “Our life insurance solutions help to secure the future that our clients want by protecting the next generations – this is sustainable wealth planning. We believe financial security and choice make people more confident and better able to meet the challenges of this complex world.”
Swiss Life’s insurance policies empower people to lead a self-determined life. With financial security in place, families will feel able to focus on the projects or passions they want to pursue. Simonin says: “Although not every high net worth family will be able to pass on a business, they can take measures to encourage the next generation to find a purpose for their wealth. For example, individuals can forge a career they genuinely enjoy, or use the funds they inherit as a force for good with charity work and campaigns.”
Ultra-high net worth individuals are taking this strategy to a new level, she says. “They are turning toward impact investing to create longer-term value that repays the investment and benefits society at large and the environment. We are seeing more high net worth individuals establishing charities, creating family foundations and investing in projects that align with their philanthropic values.”
Shaping a legacy
It is important to understand that the legacy an individual wants to leave behind is a personal decision. Simonin says: “Our clients should be free to decide how to use their wealth, and flexible succession planning is vital for shaping the legacy you leave behind.
"We enable choice in all of our insurance solutions. Our purpose at Swiss Life Global Solutions is to insure wealthy individuals, their families and their estates, and enable individuals to live their choices by reducing complexity, generating additional liquidity and creating solutions in a world of constant change.”
The Swiss Life philosophy is built on the idea that financial security and choice make people more confident and better able to meet the challenges of a complex world. Simonin adds: “This is the self-determined life, and everything we do for our clients is focused on protecting and securing it. Our high-end life insurance solutions are designed to help wealthy individuals and their families live with confidence and security, from generation to generation.”
Case Study: Estate planning that ticks every box
After making his fortune in the biotech business, our client has begun planning what will happen to his assets after his death. While he wants to leave his entire estate to his children, he also plans to contribute to two charities that he supports. He is already a significant contributor to the two organisations, one in Colombia and the other in Cambodia, donating €500,000 each year.
Is it possible to ensure that both his family and his chosen charities benefit after his death?
He wishes to give each association €2.5m, while making sure that his surviving children are not deprived in any way.
Our solution: Personalised estate planning
A large part of the financial freedom and security of our clients stems from making sure they have freedom of choice about how to pass on their wealth. We always aim for flexibility, while ensuring that clients and their families benefit from sustainable estate planning based around their own needs and choices.
By subscribing to a Swiss Life Generations policy with a death benefit of €5m, our client can name the two associations as beneficiaries. This policy generates additional cash to finance the donation, while leaving his assets to his heirs.
- Tailored: The Swiss Life Generations policy enables the client to set out exactly what should happen to his assets after he dies.
- Flexible: The policy’s death benefit can be changed at any time, as can the designated beneficiaries.
- Secure: Our client can live his life with confidence that the proceeds of the policy will be transferred directly to the beneficiaries he has chosen.
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Véronique Simonin is Head of Sales & Strategic Key Partner Management. She has extensive experience in private banking and life insurance in Europe and Asia where she has served as board member, in various senior management and front facing positions. Her areas of expertise include advising wealthy families in an international context, product and solutions as well as managing sales teams.