Personal Money/Maximise what you’ve got: The ways of Rockefeller and Carnegie are still relevant

09 Jul 2006
Yap Ming Hui

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Learn from the top businessmen who have been so successful — you need their kind of business management approach to maximise your wealth.

AT a wealth maximisation talk organised by a property developer for its exclusive clients, a woman rightfully commented: “Your suggestion for wealth maximisation is no different from the way a successful entrepreneur manages his business.”In my presentation, I had mentioned about strategic prioritisation, plan development, best practices, benchmarking, vendors’ management, key performance indicators and scorecards.”These are all jargons that business people use in their daily business operations,” said the woman.My response was: “You can never be more right. We need a business management approach to maximise your wealth effectively and efficiently.

“This is exactly the underlying principle of the family offices created by successful entrepreneurs like John Davison Rockefeller, Sr, and followed by Bill Gates, Michael Dell and others.

“Rockefeller’s family office is staffed by accountants, lawyers, investment advisers, book-keepers, tax specialists, real estate specialists and art curators to manage the family wealth. These professionals are paid by the family and work only for its members.

“Rockefeller’s belief is that the business management approach that has been successful in helping him to create his wealth should be the approach to maximise the created wealth as well.”

Taking a business management approach to wealth maximisation may be a new concept in Malaysia. But it started in the early 20th century in the US when entrepreneurs like Rockefeller and Andrew Carnegie made their fortune. It has been a proven model to maximise wealth for generations among the super rich.
Separation of tasks

When we examine the discipline of wealth maximisation, we will discover that there are quite a number of job functions in it:

• CEO (chief executive officer)

• COO (chief operating officer)

• Administration & IT manager

• Plan development manager

• Operations manager

• Review and control manager

• Research and development manager

• Various product and service specialists.

CEO

The CEO makes decisions that set the vision and direction for your wealth maximisation business. He makes decisions on the life aspirations and priorities that your wealth will work to support.

He makes decisions on the financial goals to support life aspirations and priorities. He is also the ultimate decision maker of whatever actions to be taken to achieve the financial goals.

COO

This man works closely with the CEO to provide him support to facilitate decision making and execution. He must understand the values and priorities of the CEO.

The COO plays the role of the devil’s advocate and provides second opinions to the CEO. He ensures that the whole wealth maximisation business functions as an integrated entity.

Administration and IT manager

This manager prepares the inventory of all family wealth and gathers, organises and files the relevant data for the CEO.

He also co-ordinates the meetings among various parties involved in the business of wealth maximisation.

Plan development manager

This officer develops the necessary action plans to achieve the CEO’s values and priorities.

He will develop a wealth maximisation intellectual framework and prepare various financial statements like income statements, balance sheets and strategic action plan.

Operations manager

This manager implements the strategic action plan developed by the plan development manager by identifying suitable specialists to work with him to support the implementation.

He will be the liaison man for the various specialists, and he will also review their performances.

Review and control manager

This officer plays the role similar to that of a quality control manager in a factory. He makes sure that the action taken by the operations manager achieves the results according to the plan.

He will call for quarterly review meetings, prepare action progress reports, the year-end journal and the year-end balance scorecard.

Research and developmentmanager

The manager updates the team on the latest developments in the wealth management industry. He will look out for the best practices of other wealth maximisation practitioners.

He will also study investment opportunities around the world.

Products and service specialists

These specialists provide the necessary products and services to support the plan implementation. They may include trustee companies, investment management companies, real estate companies, life and general insurance companies, legal firms, accounting firms, banks, private bankers, tax consultants and others.

CEO is the decision maker

As the CEO of your personal wealth, you have a major decision to make. You can choose to perform the maximum number of roles of your wealth maximisation business. You may even become an insurance agent or unit trust agent to perform some of the product specialist roles.

You may choose not to use the services of real estate firms but deal directly with the buyers of their properties. Or you may choose to delegate these functions. But as the major or only shareholder of your wealth business, you need to be at the helm to set the vision and direction.

This role should not be delegated at any time and under any circumstances.

You may pick professionals or professional organisations to take up the roles of COO, administration & IT manager, plan development manager, operations manager, review and control manager, or research and development manager.

These people have the expertise and the infrastructure and team to perform the tasks effectively.

Whatever decision you make, always remember that your personal wealth is your most important business. Therefore, it deserves a business management approach.

*Yap is the chief financial coach of Whitman Independent Advisors Sdn Bhd, a wealth maximisation coaching company for high-net-worth individuals. Contact him at yapmh@whitmanindependent.com.

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