Page 3 - CEG Advantage - The Super Rich Stress Test - February 2018

When it comes to estate planning, for instance, a wealthy individual might ask questions like:

• What will actually happen to my assets when I pass on?

• How, precisely, will my family be affected?

• Who will be tracking the hard assets such as artwork and jewelry to make sure they go to
the designated heirs as opposed to vanishing?
• Who is going to make sure my estate plan is being executed as it’s supposed to be?

Stress testing is a very powerful form
of a second opinion—and getting
6.5%
second opinions is very characteristic
of successful family offices. More than
nine out of ten single-family office senior
executives we surveyed had stress tested EXHIBIT 2
financial services and products they were Single-Family
Offices Stress
considering for their affluent family clients
Testing Solutions
over the past five years (see Exhibit 2). Within the
Past Five Years
The impact of these stress tests on the
financial lives of the Super Rich has been
93.5%
powerful:

Have stress tested
• Reaffirmed service or product. For
Have not stress tested
90 percent of the single-family office
senior executives, the stress testing
confirmed that certain financial services
or products they were considering N = 199 single-family office senior executives.
Source: Russ Alan Prince and John J. Bowen Jr., Becoming
were indeed applicable to them and Seriously Wealthy, 2017.
appropriate for their situation.

• Went in a different direction. For four out of five single-family office senior executives,
stress testing resulted in their choosing to go in a different direction—opting not to use the
financial services or products that had been recommended to them.

• Chose a different provider. For nearly three out of five single-family office senior
executives, getting a different perspective prompted them to implement the solution—but
with a different provider.
• Modified approach with original provider. About half of the single-family office senior
executives, after stress testing, modified the service or product but chose to implement it
with the initial professionals making the recommendations.
2