Succession Planning: The Stoics Rule Book

The following article is a brief overview of how we can apply the philosophy of stoicism to wealth succession planning, to overcome emotional bias in order to better plan for financial wellbeing.


The past 3-years have been a period of real uncertainty, bringing unprecedented change to the wealth management industry.

With Brexit, a global pandemic and more recently the fog of war which has drifted across much of Europe causing rapid inflation, there is no doubt that many of us have experienced one of the most challenging times in modern history.

These challenges have created extreme turmoil for many High Net Worth Individuals (HNWIs), for whom external influences outside their control may bring real risk for their future wealth planning.

However, during times of uncertainty there is also an opportunity for reflection.

Being thrown out of our comfort zone and normal routines, raises useful questions in how we might minimise the impact caused when faced with external challenges, together with the importance of making the distinction between the changes we can control and those which are outside of our influence.

To this effect, the philosophy of Stoicism provides a useful guide.


What is Stoicism – Brief Overview

Stoicism is an ancient Greek philosophy first founded by a man named Zeno, who on a voyage found himself shipwrecked in Athens, losing all his possessions. Instead of bemoaning his fate, Zeno took the opportunity to begin learning philosophy, leading him to develop the thinking and principles that we now know as Stoicism.

Stoicism teaches the basic concept that ‘there is separation between the way the world happens to be and our emotional response to it.’

In short, it’s the notion that there are only two things we can control – our thoughts and our actions.

Stoicism may have been founded over 2,000 years ago, but the principles still apply to today.


Rule 1 – Learn to understand what you can control and what you cannot

In a Manual for Living, Greek and Stoic philosopher, Epictetus, wrote: “Happiness and freedom begin with a clear understanding of one principle: Some things are within our control and some things are not.”

Never has this statement been truer than today, following the events of the past few years.

Many of us have experienced or witnessed obstacles which are beyond our influence, such as the closure of boarders and everyday freedom as a result of the Covid-19 pandemic (Coronavirus).

Granted, simply accepting that certain external events are out of our control is easier said than done, sometimes feeling negative emotions can be unavoidable.

However, incorporating some of the Stoic thinking into our daily lives, especially with regards to proactive planning and responding with positive actions rather than emotion, can help in controlling the impact, minimise risk and see if we might correct them.

Having preparation tools in place such as mapping out future financial goals, what we can control – for instance proactive estate and financial planning – and factoring in the ‘what ifs’ like ill health or global threats, can help minimise the blow when faced with such a scenario.


Rule 2 – Prevent emotional bias from making costly decisions

Stoicism teaches the concept that it’s not the events that occur that cause our problems, but rather our reactions to those events, the stories we tell ourselves. The Stoics wrote ““We suffer more often in imagination than in reality.”

We can all think back to a time in our lives where we have made a costly decision based on our emotion, for instance, the emotional impacts of regret, pride, greed and panic tend to result in excessive taking or avoidance of risk.

Overthinking things is a very normal human trait, everyone does it, but more often than not this can mean our reactions are based more on feeling than practical decision making.

Learning to control your emotions in order to make rational choices and having an advisor at the heart of your planning to filter emotional bias and external noise to a manageable level, will ensure you achieve the best possible outcome.


Rule 3 – Accepting time is limited

Although considered gloomy by many to think about our final days, Stoicism preaches that this can also be empowering.

By accepting the reality, we have no control of the time that is passing and sadly one day this time will come to an end, allows us to invest our time more wisely.

The Stoics wrote on the shortness of life, “You will hear many people saying: ‘When I am fifty I shall retire into leisure; when I am sixty I shall give up public duties. And what guarantee do you have of a longer life?” “How late it is to begin really to live, just when life must end!”

Thinking about the end is difficult but not having a plan in place can be self-destructive.

We often find putting things off is the biggest waste of life, snatching away each day as it comes, denying us the present by promising the future.

Having a dedicated professional to help guide you through the technicalities and create a plan to allow you to live a more fulfilled life, while ensuring future generations are looked after, can liberate you to enjoy the time spent for living.

The Stoics wrote “People are frugal in guarding their personal property; but as soon as it comes to squandering time they are most wasteful of the one thing in which it is right to be stingy. Unlike money which can be squandered and regained, time is a precious resource we can never get back.”


How a succession plan can help

Many of Stoic principles apply today when considering succession planning needs, although we cannot control much of the events around the world, we can put a plan in place to reduce the risk and damage caused.

Succession planning is your opportunity to be proactive with your long-term goals and form a financial strategy to ensure that your assets allow you to live a fulfilled life and go to the right people, when the time comes.

An effective succession plan is designed to be your strongest ally in times of need and to help soften the impact of life’s unpleasant events.

An effective inter-generational plan can not only protect your family’s wealth, but it can also preserve your family’s financial confidentiality, consolidate your assets, as well as any potential opportunity for the mitigation of inheritance tax, probate fees, other related costs.

To help have an effective plan in place, speak with an advisor to start a conversation on what the vision for your wealth is, what is important to you, such as planning for retirement, investing in your family’s future or realising lifestyle aspirations and ensure you have a trust, will and inheritance plan developed and in place.