In a real-life simulation from Sanlam Private Wealth five wealthy South African heirs were given a major reality check when they realised their entire fortune could easily be squandered in minutes.
Conceptualised and executed for Sanlam Private Wealth by the King James Group, the simulation aimed to provide a fresh, relatable take on traditional financial education. It highlighted the importance of careful wealth management for the next generation of high net worth families.
Jamey Lipschitz, Head of Wealth Management at Sanlam Private Wealth says, “Our aim was to encourage families to have crucial conversations about the passing of wealth from one generation to the next. It was based on an insight from a 2016 PwC survey report that globally, 70% of inheritances are squandered in less than five years. The research states that 60% of family fortunes are lost due to poor communication and a lack of trust between relatives.”
In a high quality video production, the Sanlam Private Wealth simulation showed five offspring from two wealthy Johannesburg families locked in a bank vault. Their sizeable inheritances were laid out in front of them in cash. Asked to follow prompts on a screen, they systematically threw away bundles of notes for taxes, estate duties, start-up costs for business ventures, cars, houses, clothes and holidays. Within minutes, the vast majority of the fortunes were ‘spent’, leaving the now deflated children facing the prospect of a far more modest lifestyle.
Far from leaving the simulation at just compelling viewing, Sanlam Private Wealth and the King James Group developed a virtual vault, an interactive online tool that allows users to calculate how much of their inheritance can be consumed by, for instance, estate duty (20%) and capital gains tax (18%). The tool also gives users access to expertise from multidisciplinary professionals.
Matt Ross, Executive Creative Director at King James, says “We wanted to bring our message home to clients and prospective clients through experience, far more powerful than simply telling them that their lifetime fortune is more likely than not going to be wiped out by their own children.
“Firstly, we allowed them to watch other families go through the experience of how quickly a fortune can be lost in a single generation. Two films showed two South African families’ fortunes represented in actual cash. Their children were exposed to these large stacks of money in a bank vault. An impressive amount and something very few people ever see. We asked these kids to begin removing money based on tax and common inheritance statistics. What was soon left was a soberingly small fraction of the inheritance.
“We didn’t want to leave it as only as a passive experience. We knew we needed to give our audiences the ability to experience this for themselves. So we created a digital journey. By entering their own fortune amount, they can see how rapidly it is swallowed up by tax and common inheritance statistics. Sanlam Private Wealth’s clients and prospective clients can see just how rapidly an inheritance disappears. The process is narrated and guided by a Sanlam professional making salient points along the way. An astoundingly powerful and personal experience.”
To view the Family Fortune simulation video and interactive vault tool visit www.thefamilyfortune.co.za