Episode 61: Philip Marcovici on Why Family Enterprise Fails Across Generations

R. Adam Smith: A warm welcome today to Philip Marcovici, principal of the offices of Philip Marcovici in London. Philip, it's great to have you here today. Thank you so much for joining.

Philip Marcovici: Thanks for inviting me. R. Adam Smith: So Philip is one of the world's leading advisors to global families on wealth governance and intergenerational stewardship. Philip consults with governments, financial institutions, family owning families around the world on various topics including taxation, wealth management, family governance, and long-term strategy.

Philip worked extensively with ultra net worth families, helping them design family constitutions, governance frameworks, trust structures, and succession systems that protect both capital and family cohesion over time. Philip is the author of two influential books in the space, published by John Wiley. One is The Destructive Power of Family Wealth, and the other is The Transformational Power of Family Wealth. Both explore the risks of unmanaged wealth and also its regenerative potential for families and communities for generations to come.

Philip serves as a founding advisor to the multi-generational leadership program at the University of Cambridge Institute for Sustainable Leadership. There he worked with some of the most influential families on shaping leadership ahead. Philip has a career spanning law, academia, advisory, and board roles globally and brings a rare combination of expertise across legal, rigor, practical experience, and deep human insights. It's really great to have Philip on the podcast today.

Philip, I'd love for you to talk about your organization a bit based in Hong Kong and London, and what you do at the organization. Philip Marcovici: Sure. I spent my career as an international tax lawyer, most of it with Baker McKenzie, an international law firm. I spent about half of, close to 30 years with Baker McKenzie in Hong Kong, and then the other half in Zurich in Switzerland.

And about 15 or 16 years ago, I retired from big law firm practice. Not to do nothing, but to focus on teaching, and writing, and working with a few families around the world. So The Offices of Philip Marcovici, it's basically just me, and an assistant. Basically what I do is, as I said, some teaching, some writing, and then with a few families around the world I get involved in assisting with the kind of things that we're gonna be discussing today.

Also in relation to my background, I should point out I'm not American. I'm Canadian. R. Adam Smith: Mhm Philip Marcovici: I grew up in Canada.

I went to law school in Canada. But I did study law in the US and started my career in New York as a corporate tax lawyer before moving to Hong Kong at the end of 1981. R. Adam Smith: Wonderful.

Well, actually being in Hong Kong since 1981 is quite fascinating. We've had several Asian family ops experts on the podcast the last two years, including this month. The colleague, you may know. And it would be interesting as we discuss today to talk about the different, structures, and characters of family offices around the world.

And particularly comparing the Asian system and the Western system. I'd love to hear about how you specialize in governance in particular and working with families across different cultures. Can you talk a bit about that approach to governance, and how you approach it as a practitioner, but also more philosophically and strategically? Philip Marcovici: So the big picture to what you've asked for me, is that culture is often overplayed in relation to planning within the families that I work with.

When I first moved to Hong Kong, there were many families who say to me, "Philip, you don't understand Chinese families We all love each other. We don't fight, we don't need lawyers." Indian families would say, "we all live together in the same compound, we never fight." Middle Eastern families would tell me, "We have Sharia Law.

Our culture is different. We do things in a different way." Over the years, what I've come to very much appreciate is that culture, religion come into planning for families. However, both are overplayed as key issues.

The reality is the families in Hong Kong who said they never fight, are all today at each other's throats and in the courts. Same thing for families in mainland China, in Taiwan, India, Middle East, all over the place. At the end of the day, there are more similarities in my experience between different cultures, than differences. So culture, religion, come into the picture.

But the reality is for families all around the world of every culture and every religion, wealth can be destructive of the family, and it can be destructive of the family business. As a result, they do need to pay the same kind of attention to the kind of things that we're gonna be discussing today. R. Adam Smith: Yes, I agree with that, and that there are common patterns across family systems, particularly for the large families on this podcast, we cover the family enterprise.

More so than the family business. The title we're focusing on the larger family offices and family enterprises, just because they're more complex, and they're more impactful, and they're cross border and the impact society. I'd love to talk about that with you, what you see as some of the common patterns across the systems and specifically as the systems become more relevant. This becomes more urgent as the organizations grow in the sense how the financial capital, the wealth, can sometimes outgrow the, let's say the emotional intelligence or the governance capabilities in, the family firms as an organization.

You talk a bit about that framing of wealth as, as an asset and a liability as well to the families? Philip Marcovici: Sure, one of the things that I see with the families that I work with and, this really crosses all geographies. Very often there's not enough focus on where the family is going. In other words, planning very often is addressing immediate issues that the family is facing.

Mom or dad is leading the family in the family enterprise and is getting older and there are issues about succession, or somebody in the family has died or there's a divorce. Or there's been a tax change, or a legal change, or a residence change triggering the family looking at their succession and asset protection structure. What I encourage families around the world to do is to actually pause and look into the future and ask themselves, where is it we're actually going? What I mean by that is it can be useful for a family to say, we're gonna choose a date, let's call it 30 years from now, or a hundred years from now.

And we're gonna look at what the ecosystem of our family and our family enterprise would look like in ideal circumstances in 30 years. How's this gonna be governed? How is this gonna be run? How do we ensure that family members are happy and healthy?

How do we ensure that the family business, enterprise and investment enterprise is running well? And when the family has agreed on, "Wow, that's a beautiful ecosystem that we'll be part of." Also focusing on community, and planet, and employees, that's really what we're shooting for. What the family is then able to do is to step back and say, okay, that's where we're going, or we'd like to go in 20 years, or 30 years.

Where are we today and what do we need to do to ensure that we make it to our destination? The reality is that that then forces the family to, in a sense, do a continuity audit. They need to take a look at the trusts, and foundations, and companies, and all the instruments that they're using. The wills and things like that, relation to structure.

They've gotta ask themselves, are those in shape to bring us to the destination that we're going to? And very importantly, are the structures that we have in place and are the steps we've taken. Such that we can avoid the derailers, and things that can go wrong both internally in the family and in the external world that can affect our ability to get to where we're going. That's the approach that I like to take.

R. Adam Smith: We'll move into stewardship and decision making systems next, including charters and constitutions. But, I would like you to continue talking about the value of service providers in general in the industry. Obviously it's essential in many, many areas, not just tax.

I'd like you to cover the areas of the entire family enterprise that you think are relevant to external input and advice. Just going through that, matrix. Philip Marcovici: My philosophy, for the families behind the enterprises that we're talking about here, they have to be of course aware that they need external advice. It's a very complicated world and you have a lot of different specialty areas.

As you said, the families that you're addressing are families who have cross border issues and have meaningful levels of assets and, complexity. Of course they all need advisors, but what's very important in my experience is to have a bit of a sense of not trusting anyone and not letting advisors kidnap the overall planning process and the structures that families adopt. In other words, it is vitally important in my experience that the family itself understands its own succession structures.

And while family members don't have to be expert on every topic, they do need to be well prepared to ask the advisors the right question. R. Adam Smith: But that relates to education, and education can be internal and external. It's an evolutionary process.

And it's tricky because the knowledge of the family to know what to ask is not just necessarily inherent, right? It has to grow over time and learn externally and bring in the very people you're talking about. Philip Marcovici: Absolutely, and it brings in also an issue that a lot of families struggle with sometimes. They tend to focus the preparation of family members on those family members who are actively and full-time engaged in the family business or the family investments.

And family members who may be more on the periphery because they have their own independent careers are neglected in this. Albeit that they play a very important governance role in the stewardship of the family assets going forward. All family members in whatever roles they have should be the subject of development frameworks. Which are designed to support them in their learning.

Not, again, how to have all the answers. But learning how to raise the right questions and really play effectively that stewardship role. And coming back to what you said about, experts and outside advisors, absolutely they're needed. But for safety of the family, the family has to know how to use those advisors carefully.

R. Adam Smith: Thank you. So let's talk about what governance really means in practice. Looking at the roles of structures around governance, we've had some really incredible talks on the podcast around governance.

As you may know discussing it with Merrill Lynch, discussing with Deloitte, discussing with RSM, James Gruman from Alternate Worth Institute, Alfredo Damasas, a superstar in the industry, and our friend Masimo Bao and Christina Wing, Martin Roll. We've had some really amazing people, very much focused on governance and the structures and utilization and utility. And importance of governance. There's lots of different views on it, right?

What the mechanisms are and how to use them. How heavily to use them, how formally to use them. As a lawyer can you talk about, balancing the legal utility of governance structures, with let's say the psychology and the softer power elements. Philip Marcovici: Governance is a critical issue for families, and can get complicated when you have lots of asset baskets in different countries, different companies, different entities, different things.

Understanding your own governance within the family is absolutely critical, but let me make a couple of points. There are no black and white, right and wrong answers. But, generally what I find works well within families is a cooperative approach to governance. In other words, not for the future, having in mind that it's gonna be the oldest son or you know, one specific sibling in the family who's gonna be the boss.

But developing a governance approach that is really teamwork and cooperation among the next generation. R. Adam Smith: And also evolutionary though, right? Not just cooperative.

Cooperative makes the conversations more fluid and more teamwork and collaborative, but then the evolution of it also. Can you talk about how it needs to grow and, and change over time as scale grows? Philip Marcovici: It becomes representative. I mean, it depends on the family structure.

We're not gonna have time to get into the sort of the, you know, per capita and branch ownership and things like that. But very common would be when you have a branch ownership structure, or stewardship structure for a family where the different family branches have a vote. Each one might be able to put somebody forward to sit on a kind of stewardship committee, and then we might have a rotating chairmanship. But the idea is to really have a philosophy that the family stewardship, whatever vehicle or whatever approach that stewardship takes, should really for everyone in the outside world, including employees and others.

The family should always be, unanimous in their view. But internally, as they discuss things and as they properly should, and they won't always of course agree. There needs as part of the governance structure, to be very clear approaches to how do you deal with voting and making decisions? How do you deal with disputes?

How do you resolve any disputes? So all of this comes into governance. To give you a simple example, some of the families that I work with, what they do is they say family members must be unanimous in making their decision. And if they can't come to a unanimous decision, they just roll the dice.

And whatever the dice says is ultimately the unanimous decision that they need to put forward to the outside world. Now, governance also carries with it other issues that families need to pay attention to, including reporting and information requirements. To just give you an example, the protector of a trust, that's a form of governance. If you're a protector, your name is then reported to the tax authorities of where you're living.

That means that the families must understand that it's important for them to ask themselves what governments have, what information about what assets within our family. And as you design the governance, being aware of what reporting requirements are can influence how the governance is actually done. So sometimes we don't have family members as protectors. We have the stewardship committee that has family members on it, have the power to pick who the protector will be and to remove the protector.

Having that power is not a reportable power under the common reporting standard, just as an example, whereas being a protector would be. Again, that comes into this question of governance and how governance is set up. Maybe a last comment that I'll make, Adam, is that for some families what becomes very interesting is to use what I'll call a governance plugin. Where, for example, they create a company, the purpose of which is simply to provide governance for all the different structures that the family has.

So we could have a company, the board of which is made up of the family members that are part of the stewardship committee of the family. Then you plug in that company into all the trust foundations and other structures the family has, where you simply say the power to do certain things or to give certain guidance is given to this governance entity, so that the family has common governance across all their different assets and approach. R. Adam Smith: Okay.

Is that like a proxy, like a - Philip Marcovici: It's a way of organizing the input of the family, because there's a reality for a lot of families. They don't understand their own governance and they have a lot of different structures and assets where the governance may not be the same for all the different corporate and investment interests that they have. So it's just a way in which to design the governance. But simple terms in governance is, you need to be asking yourself throughout, the what ifs - what if this happens, what if that happens?

You need to anticipate in advance, and ensure that the governance is well designed to withstand the things that can go wrong. R. Adam Smith: Okay, great. Let's talk about tax briefly but not too extensively so you don't give away all the answers to this topic.

In the meantime for listeners that want to reach you could you just mention your website, any other ways that you want to be contacted? Philip Marcovici: On my website you've got my email address, www.philipmarcovici.com is the website.

So you'll find my email address there if anyone wants to get in touch with me. Most interesting is for anyone to get information, is to read actually the books that I've written or to join the program at Cambridge that you mentioned. The Cambridge Institute for Sustainability Leadership. We have a multi-generational program that focuses exactly on the issue of the role of wealth in business owning families in society.

Given growing and urgent income and wealth inequality, given climate change and all the other developments, where do families fit in? It's a good segue to your question about tax, and of course tax is a big subject. We won't be able to discuss that in any detail at all. But what I do wanna say about tax in a nutshell is that we're in a mess in the world at the moment.

There are very few, if any, countries that are really getting it right. And there are also many wealth and business owning families that themselves think society is optional. We have families that move around from country to country as a way of managing their tax exposures. We have economies in the world that, the pendulum shifts from being very protective of wealth and business owners to seeking to detach them from their wealth through wealth taxes, and very high inheritance taxes.

What I'm a huge advocate of, is dialogue between governments and wealth,and business owning families, and the development of an understanding that wealth and business owning families have a huge contribution to make to economies. They already do make huge contribution to the economies around the world, but they can actually do even better. But wealth and business owning families need governments that understand this value to the economy and can come up with simpler, more effective and more fair ways in which to tax.

So just to give you an example. The United Kingdom, where I'm sitting at the moment in London, is a place that hosted for many, many years, many, many wealth and business owners from around the world who were attracted to the UK for safety and security, for good education, for lots of reasons. But also, they were taxed in a very gentle way because of something known as the non-dom tax system. That was not, in my view, a good system.

I was in favor of that system going away. What I wasn't in favor of is what the labor government did, which was to remove this non-dom system and fail to replace it with something interesting to attract and retain wealth and business owners to the UK. As a result, the UK has lost among its best future taxpayers and those taxpayers have been harmed because they would've liked to stay in the UK. It's just one example from around the world of the failure of a government to understand the value of wealth and business owners.

R. Adam Smith: Just more broadly tax is, I think, an under-appreciated topic in the sense that the tax revenues really from individuals, are very large portion of GDP globally. Your view on that, how it differs in emerging markets versus OECD countries, but also just philosophically - the individual, especially the large individuals, contribute a high concentration of wealth to economies, right? 70, 80%.

And there is an obligation for an opportunity, an obligation for individuals to support their own society. In the US we see a moving together under the Trump administration with business and government. I mean, do you ever see a time when very wealthy, very impactful people feel like they can make a more direct contribution to society, to the government in a more custom or collaborative way? Philip Marcovici: There's, a lot to be done in this area.

Tax is such a complicated area that very few people really are able to engage in a good dialogue about what a tax system should really look like. And based on what you've raised, Adam, I would say first that it's not just the tax revenue from individuals that has to be taken into account, but also the tax revenue from corporate entities. That in reality are controlled by families at the end of the day. And, they really need to be counted as part of the benefit to an economy of having wealth and business owners attached to that economy.

In Asia, it is even more common that you have families behind even publicly listed companies. So you know, family, business and wealth ownership is a huge contributor around the world to economies, a hundred percent huge contributor. What we need are governments that really understand that and can work together with those families. The US at the moment, we're seeing a bit of a pendulum swing in the US.

I'm troubled that in the US, we're in a situation that it may be a little bit too good for wealth owners, at the moment in terms of how the system is being operated, and that means that the pendulum may swing even stronger the other way in due course. Extreme wealth and income inequality is real in the United States and it's real around the world, and it's something we have to do something about. It's not about taking something away from wealth and business owners. It's about creating smarter, better ways in which to encourage them to engage with society, including in relation to tax.

R. Adam Smith: Okay. Moving to the future of family wealth, since we're talking a forward-looking mindset of the evolution of, tax revenues to affect the society, the country, the balance sheet, right? Family wealth is getting quite large.

We are looking at over 5 trillion of wealth, probably 10 trillion, probably 10 thousand family offices that according to, Deloitte and UBS, JP Morgan and Camden, et cetera. So most people know this by now. But there is still more to discuss, and to do in terms of the impact as I think about it and talk about it, of the impact of these large families on society as social actors. And moving from just preservation of capital, which is very much a G1, protect the house mentality to more regenerative influence, of course incorporating the next gen.

But just thinking about legacy and the power of their organizations as institutional forces in society. This is super important and one of my core topics. Can you talk about that please? Philip Marcovici: Well, you said a few things.

I think the word regenerative requires me to sort of mention that I'm a great believer that we can develop regenerative tax systems, regenerative economies. John Forgeham is an economist who has written about regenerative economy. And I believe that we can build that in and around wealth and business owners. So it's not something that I fear when you say there are X number of family offices and this amount of family, owned wealth.

I think family owned businesses and investments generally in my experience, are much more responsibly stewarded than when you have short term CEOs who are not looking at a family legacy, who are looking at short term returns, and when you have publicly listed companies that are being run quarter to quarter in terms of what they're announcing. So family businesses have the ability to transform our economies in very positive ways. If there is a good relationship between the family businesses and the governments that are involved, the economy can also be designed to support and grow new family businesses and new family wealth.

That's what regeneration is really all about. So I see that as being very positive and families themselves who are involved in being part of a family that is running a family enterprise. The more that they understand the reality that unless the planet survives, their family and their enterprise will not survive. As soon as they've understood that, there begins to be an approach towards responsible wealth and business ownership, that becomes a very, very positive thing for society.

R. Adam Smith: Amazing. What are the industry institutions that are focused most on sustainability for and by the, the billionaires and large families in the world. We have the Giving Pledge, we have organizations like Cambridge, and Oxford, and Harvard, and Stanford, and Chicago, and Borton, and INSEAD, and Singapore.

Then of course there's, the private banking layer. Then there's the super club layers like FBN, the Bill Gates side foundations. Who are the big players in the world that are focused on this for and with the billionaires? Philip Marcovici: What I don't see much of, Adam, is the connection between the internal and the external.

Let me just explain that. So, you mentioned the Harvards and the Whartons and the different FBN and all these organizations. There are a lot of organizations and universities that focus on family business stewardship, and who do a lot of information exchange and run training programs and otherwise for families in and around - how can a family ensure that the family itself is sustainable? Then there are a lot of organizations, universities as well, that talk about philanthropy and climate change and the needs of the world.

But don't connect what they're doing to the internal that's being done within family businesses. What I'm a great believer in is that a family business enterprise that is sustainable over generations can be hugely positive to economies over generations. And that's the interesting synergy, when you see that balance between the external world and the internal world of the family are synergistic. Then everyone in the family gets excited about stewarding the assets for the future.

In a lot of the families I work with, the younger generation is passionate about philanthropy and impact. And what I do with those families is to encourage the family to embed impact and philanthropy into the long term construction of the family enterprise and business, so that the younger generation are really keen to work hard to prepare themselves to manage and steward the family business, because it produces the revenue that then drives the philanthropy and impact projects of the family.

So it's a long answer to your question. You know, what are the organizations in the world that are really looking at this internal balance and the external balance and putting them together? I'm not aware of that many. We have a lot of silos of education that is looking at the internal, and we have a lot of silos that are also focusing on the external, but it's the link between the two that I'm really keen on.

R. Adam Smith: Great. We've covered this topic in different ways in the podcast with leaders, and authors, and academics. We have had guests from hippocampus and from the elite in philanthropy and ESG, and sustainability on the show.

We had Elizabeth Bagger, and Sonder Hopsberg, and the next gen leaders like Jason Ma. So we've talked about it, but I like that we've covered this, internal-external conversation. It's kind of ironic that we have someone like you as a tax expert talking about sustainability, and not to mention there is a branding gap essentially for the world itself to talk about sustainability, because it's very fragmented. That's kind of ironic because it's so topical.

Typically you would look to, a president or the UN or something, a World Bank to cover that, right? Philip Marcovici: Yeah, it is unusual to hear a tax lawyer talking about some of the things that I discuss. But it's because of that intimate knowledge of how tax systems work, that I'm absolutely convinced that we need to do something about how tax systems are operating and also how families structure themselves going forward if they want to navigate, and become a multi-generational family.

Not all families should or want to be multi-generational, even if there's a lot of wealth involved. But those that are really looking to be multi-generational, they will not survive over multiple generations unless they are looking at the outside world, employees, community and planet. Equally governments, as I've said a couple of times in this interview, they need to understand a lot better that there's a lot more benefit to the economy, to working with wealth and business owning families encouraging their growth.

Rather than doing the sort of short term political thing of bashing the wealthy. As opposed to embracing them as part of the economy. R. Adam Smith: Again, it's a branding issue.

The wealth need better branding for the importance of their wealth and their impact, not just the greed and ego that's underlying the creation of the wealth. So that's a problem. Governments are too busy to focus on banging the drum to brand themselves as a force of society, and they actually need the taxes. Not so bad of a thing to have lots of taxes, because that actually fixes the bridges, and education, and healthcare.

It's just recycling, essentially a capitalist society and moving it back into, the system and the most efficient spending mechanism. Philip Marcovici: Spot on, and we have to make people feel happier about paying their taxes, and there are things that can be done to achieve that for sure. And coming from your comment, we have to accept the reality that there are plenty of irresponsible wealth and business owners. Who think that society, as I said earlier, is optional.

Somehow their mission is to pay zero or the least amount of tax possible. And they'll move around from place to place in order to achieve that. They'll do all kinds of things which may not be in the long term best interest of their family enterprise, or the mental health of members of their family. You want happy and healthy family members.

That's one of the objectives that, or at least it should be one of the objectives of any wealth and business owning family. R. Adam Smith: I mean that's a natural human instinct of selfishness, essentially. Short and long-term thinking and selfishness.

Philip Marcovici: That's right. We need to adjust that thinking, and that's what I enjoy about what I do at Cambridge University. Because a light turns on when families and multiple generation understand that the more responsible they are to society, the more resilient their family members and the family business and enterprise itself becomes. So in other words, the older generation is, very comforted that the younger generation is super enthusiastic about taking care of things in the future.

And the younger generation is super enthusiastic because the whole plan has had them involved. They know that their involvement is not only for the good of the family financially, it's for the good of the environment, it's for the good of communities and others. And it really creates a purpose for the family wealth and business going forward. So that's what becomes really, really interesting.

And maybe that's something I didn't get a chance to emphasize earlier on. Something that, for me, is critical in planning in families is the plan has to belong to the younger generation. Your succession plan is simply not gonna work if mom or dad dictates what that succession plan is gonna be. If you want it to work, you need the stewards of the future, the younger generation, to be fully part of that planning process.

R. Adam Smith: Thank you. So we're wrapping up here. I wanna talk about the, EQ quotient, the softer power quotient.

This is mentioned often in the podcast talking about soft power. We see it within the family capital circle of the Ultra Networth Institute, and the emotional intelligence quotient, which of course is different across cultures. Let's talk about that next as our last topic. But just one more thing.

Back to the, importance of taxes at the government country level. Again, as families get super large and let's say the top 1% of wealth of societies might contribute 30, 50% of tax revenues. I'm not sure what the number is, but the concentration of wealth has grown in the world, in this general bull market that we've been in, liquidity driven market that we've been in, gets back to supplies and economics. So I think that generally assets are overflated, especially publicly and there is, too much wealth concentration.

Which again gets back to taxes in a sense. So there is a, broader topic there of wealth inequality and how tax systems can improve that inequality through redistribution of wealth, into a more fair system, particularly the middle class. Do you think there's ever a time like you see, sometimes on your tax form or a charity tax form, or if in a philanthropic sense you can choose a bit where you put your wealth? So do you think there ever could be a time, where the tax authorities of a country could say to the super wealthy as an encouragement - let's say backing the branding and the carrot of giving taxes.

Do you think there's ever a time where government could allow big chunky tax, let's say a top 1% program. Do you think there's ever a time where the government could say, you have the ability to allocate part of your wealth and your taxes? Philip Marcovici: The answer is yes. That's called hypothecation.

In other words where the taxpayer is able to say I want this part of my tax, if we were free to do that, to go for the following purpose. That's hypothecation. Economists don't like it because they say countries should have the freedom to spend the tax revenue as they wish. That said, we have lots of evidence of countries not doing a good job of spending their tax revenue.

In the UK an example, the US and others who, government wastage of resources in different circumstances. So I actually, I'm very supportive and a great believer that we should have elements of taxation that do allow for the kind of choice that you've just mentioned, and even allow for some elements of governance. So if in the UK, which you gave as an example, they allowed me as a taxpayer to hypothecate 25% of my taxes, that might allow me to say - okay, I want to have 25% of my tax go to fund the National Health Service.

And because I'm such an important contributor, I want to make myself available to be involved in the governance and stewardship of the money that's gonna be spent by the National Health Service. In other words, wealth and business owners can be closer involved in how the money is actually spent. And that could be one of the ways to help make people feel better about paying their tax, because they know where the money is going and they know that they're involved in ensuring it's doing the good that they're doing.

I'm not a believer in taking away from the wealthy to address inequality, by increasing hugely an inheritance tax and taking money away, or introducing a wealth tax and using it for redistribution. What I'm more in favor of is an understanding in society of responsible wealth ownership. Broadening the tax base for wealth and business owners, but simplifying it at the same time so that you're actually giving more to the wealth and business owner as a service from the relevant government in exchange for higher revenues that you're getting from wealth and business owners.

If I, as a wealth and business owner feel that I can really, really trust the UK government for the long term, I don't mind paying a lot more tax to the UK than to other countries and base my business and my family in the UK. Because I'm getting something of real value in exchange. That's really what I promote and, in my book, what I talk about very broadly. R.

Adam Smith: Wonderful, thank you Philip. Today we've had Philip Marcovici of his own firm as a global expert in tax, covering a wide range of all the key tax issues the world faces. Both for governance, and corporations, and individuals. And here we've talked about governance over control and the different mechanisms, importance of governance.

We talked about stewardship, and the importance of inheritance and next gen. The value of the tax revenues, and of course designing government systems and thinking about the personality issues within the large billionaire and family office organizations. I really enjoyed your, comments on the internal-external factors, and how to utilize those levers in creating future family leadership. We've really covered a lot today.

I really enjoyed it, and there were some new topics that we touched on today. I'd like to continue talking about them with you and I hope that people reach out to discuss them as well. Philip Marcovici: Super. It was a very interesting conversation.

Look forward to staying in touch. R. Adam Smith: Thank you. Philip's work reminds us that sustainable wealth is not just about accumulating it in the first place, but also about stewardship across generations and the importance of tax in that process.

It was really great to have his insight today with us. This is R. Adam Smith, signing off. Stay tuned for the next episode of the Family Business Audiocast.