Research Shows Hidden Emotional Risks Threaten Family Firm Legacy
- Paul Andrews - CEO Family Business United
- Mar 27
- 3 min read
Veritage International has published a new global research report highlighting significant, often overlooked risks facing business families during wealth and ownership transitions.
Titled The Missing Link in Family Business Transitions: How Emotional Disconnection Threatens Family Legacy, the report reveals a substantial disconnect between founders or current owners and the rising generation. The findings point to persistent gaps in communication, trust and emotional alignment that undermine effective succession planning and long-term family cohesion.
Drawing on patterns reported by families of wealth worldwide, the research explores how both generations prepare — or fail to prepare — for the transfer of wealth and ownership. It examines concerns around letting go and taking over, alongside the emotional challenges that frequently remain unaddressed within affluent families.
The report stresses that success in family enterprises cannot be measured by financial performance alone. Instead, it argues that enduring success depends equally on family wellbeing, unity and a shared long-term vision. According to the research, a family’s vision and its wealth strategy are inseparable, and both must be intentionally designed to support and reinforce one another.
Veritage’s analysis identifies several categories of risk, including inadequate succession preparation, strained family relationships, unclear individual roles, questions of personal value, and low emotional engagement across the family system. These pressures, the report warns, can distort decision-making as family members react from unresolved emotional wounds rather than shared objectives.
The study introduces the concept of “emotional governance” — the ability to regulate emotions so they become an asset rather than a liability — as a critical factor in sustaining both business continuity and personal wellbeing. It also highlights the consequences of generational disconnection, noting that a majority of next-generation members do not feel that a clear role has been defined for them in future ownership or wealth decisions.
The findings suggest that families in which members feel heard and respected experience less internal friction and are better equipped to manage complex transitions and disputes with confidence and alignment. Veritage positions the report as a practical resource for advisers, family offices and business families seeking data-driven insights and tools to create safe environments for meaningful intergenerational dialogue.
Veritage International says the research is intended to spark open discussion around the emotional challenges that are frequently avoided in families of wealth, particularly during periods of transition. The firm plans to share its findings through events, private briefings and educational sessions with families and advisers worldwide.
Francesco Lombardo, Founder and Managing Director at Veritage International, described the report as a catalyst for change. “The biggest message is that there is a clear disconnect in communication between the generations,” he said.
“A lack of honesty and integrity in these conversations due to a lack of emotional safety — or the absence of conversations altogether — is one of the greatest enemies of family businesses and family offices.”
He added that, despite an unprecedented wave of intergenerational wealth transfers on the horizon, families are struggling to discuss what inheriting wealth truly means.
“Both the retiring and rising generations often see the other as unprepared for the transition, yet the conversations needed to address this are simply not happening.”
According to Lombardo, traditional governance structures alone are insufficient. “Governance systems do not handle emotions thoroughly enough to facilitate these transitions successfully,” he said.
Thomas Clark, COO at Veritage, echoed this view, warning of a growing sense of disenfranchisement among next-generation family members. “The result is a generation that does not feel listened to,” he said. “There is a broader issue for the family business community in understanding the scale and impact of the emotional challenges currently at play.”
Clark argued for a balanced reliance on conventional governance and greater focus on emotional dynamics.
“By addressing the emotional layers and bringing generations together, advisers can then build detailed plans rooted in shared values, alignment, purpose and mutual respect.”
The report concludes that a meaningful shift in advice and practice is needed, beginning with greater personal awareness of emotions and a willingness to address them openly. In some cases, it notes, families may need specialist support to move conversations forward constructively.
“As advisers, we must help families feel safe to express what they truly want,” Lombardo concluded."
“The first step is admitting there are communication issues, putting them on the table and being willing to address them honestly."
"Only then can families put emotional governance into action and successfully navigate the intergenerational wealth transfers that will define the coming years.”
Download the research report here:
