When you get £56 Million from the lottery you need the services of a very clever wealth manager
With the recent news that 2 sets of people got around £56 Million each from the lottery and my visit yesterday to the City of London meeting wealth managers my thoughts turned to who you would choose as your wealth managers and where you would put your money ?
A quick Google of ” where would you put £56 million if you won the lottery ” revealed this from LotteryBuddy.com :
More than 240 winners of at least $1 million responded to surveys (42% of all such winners) by the Ontario Lottery and Gaming Corporation (OLGC) in 2003.
89% put money in the bank.
75% shared money with family or friends.
62% bought a new car.
58% paid off debts.
56% took a vacation.
47% donated to charity.
37% paid off mortgage.
34% bought a house.
28% paid for education for self/family.
15% changed their overall lifestyle.
6% bought a boat.
What was the experience like for the winners?
95% sought professional financial advice.
77% reported they had been contacted by the news media. 93% of those contacted said they received fair and courteous treatment.
47% of winners said they were solicited for donations. Among those solicited, 71% said it was “not a problem”.
42% of winners either retired, gave up their job, changed jobs, went to school or opened their own business.
I also quite liked these responses to the Linkedin question ” Why are 75% of all multi-million dollar lottery winners broke within 5 years? ”
It was good to see that 95% of the people who won the Ontario Lottery sought the advice of professional financial advisors. No doubt one of the first things that the lottery does is to offer financial advice ( although having never won the lottery I don’t know exactly what they do ).
A Google for ” do lottery winners get financial advice? ” revealed this:
which said, amongst other things
Find people you can trust.
“The most important financial decision to make initially is who’s going to be accountant, financial adviser and lawyer,” says Hartigan. “And I don’t think they should be the same person.” If you don’t have all of these people in your Rolodex currently — and how many of us do? — “talk to other people who use these kinds of services. Referral is the best way,” Hartigan suggests. If none of your friends or family can recommend a particular professional, Hartigan recommends going to a major accounting firm, a major brokerage and a large law firm. “Ask what they’ll do for you.” Garrison agrees with Hartigan’s advice and adds, “References are mandatory.”
The hardest part of this is the first sentence:
Find people you can trust.
because this will be your greatest challenge.
As I have said I think that the lottery would probably put forward a list of ( hopefully ) proven and trustworthy accountants, lawyers and financial advisers.
But can you imagine this situation ??
One day you don’t really know any lawyers, accountants or financial advisers – or if you do then they deal with relatively minor financial and legal issues – and the next day you have to choose ” trusted ” people that can handle £56 Million !!
Actually ordinary accountants, lawyers and financial advisers are probably not the right people – even if they are from big firms. What you actually need is a Wealth Manager. Now, again, I imagine that with it’s experience of handing out £millions to lottery winners the lottery would have evolved to the position where it had a recommended list of Wealth Managers who really knew how to manage £56 Million rather than accountants, lawyers and financial advisers.
I’ll be developing this theme further over the next few weeks.