The post Why Australia’s wealthy hide their true riches from friends and family appeared first on David Werdiger.

source https://davidwerdiger.com/2023/09/why-australias-wealthy-hide-their-true-riches-from-friends-and-family/

Q. How much extra financial support should we give our children?

A. This is one of the great balancing acts parents need to perform. Too much and kids might end up spoiled or entitled. Too little and the wealth is not there for them when they actually need it (and if it’s not, then what’s the point of it?)

We all have a particular psychology of money, and these attitudes are formed in our early years and deeply ingrained, sometimes on a subconscious level. Children who see parents always fighting about money might end up feeling money is a source of conflict, and find themselves unable to hold on to it. Some wealth creators feel their children should struggle financially like they did because it made them tough and resilient. I’ve used the word “feel” deliberately as these views are more based on emotion than logic.

Warren Buffet famously said “enough that they can do anything, but not so much that they can do nothing”. Given this discussion is about additional support (rather than wealth transition), the bigger risk is around “doing nothing”.

My view is that children in wealthy families ought to learn an important life skill: making financial trade-offs. While at some point in the future, they may not have to, it’s a good thing to know as it’s healthier to treat money as a finite resource.

A financial trade-off means sacrificing some of X to get more of Y. That could mean a better vacation at the expense of a nicer car, or a restaurant dinner at the expense of an outing. Note that you may want policies to ensure your children do not make certain financial trade offs, such as for medical expenses.

It’s also important not to set policies in stone, and continue to monitor (while respecting our children’s autonomy) and adjust as needed.

Consider This: Does your family have formal policies on distributions to family members? How flexible are these policies? Do you have open discussions with children about money and spending? 

Actionable Generational Wealth Succession: 

For more in-depth, thought-provoking discussion points and further commentary on family and business conflict resolution, access my Familosophy newsletter archives by signing into our newsletter https://DavidWerdiger.com. We will send you the archive links from there.

#familyoffice #wealthmanagement #conflictresolution #strategicmanagement #nextgensuccession #intergenerationalwealth #governance #leadershipdevelopment
#entrepreneurship

The post Q&A. How much should we help? appeared first on David Werdiger.

source https://davidwerdiger.com/2023/09/how-much-help-2/

The recent Vanity Fair expose of the Ritossa FO conferences gives us pause to reflect on one of the most important sources of value for families: our networks.

Our networks are a source of deal flow – families like to co-invest and always look to what others are doing. They also are an important step-up for our children – helping them with education, employment and more.

Membership organisations and the event/conference circuit play an important role in helping us curate and extend out networks. While the companies that run these purport to filter who is allowed to join/attend, their due diligence may not be sufficient for family members who attend. Those who are “sell-side” will do whatever they can to gain access to “buy-side” families. And sadly, there are no shortage of crooks and predators in the world.

There is a principle in the security industry: always assume the first line of defence will be breached. And this one from the investment world: don’t rely on someone else’s due diligence (unless your criteria are fully aligned).

I was invited to speak at a Ritossa conference some years ago, and something about it felt a bit funny. I asked a couple of trusted friends (who are mentioned in the article) and they confirmed my suspicions. Phew!

Developing a ‘sense of smell’ takes years. Taking people into our trusted network should be done very carefully, and always considering the risks against the potential gains.

Consider This: What protocols and due diligence processes does your family have for new business and personal relationships? Are rising gen family members educated as to the value of their networks and the risks of networks and relationships being compromised?

Further reading: https://www.vanityfair.com/style/2022/10/inside-wealth-conference-con-man-anthony-ritossas-wild-web-of-lies, https://tfoatx.com/publication/family-office-networks/

Actionable Generational Wealth Succession: 

For more in-depth, thought-provoking discussion points and further commentary on family and business conflict resolution, access my Familosophy newsletter archives by signing into our newsletter https://DavidWerdiger.com. We will send you the archive links from there.

#familyoffice #wealthmanagement #conflictresolution #strategicmanagement #nextgensuccession #intergenerationalwealth #governance #leadershipdevelopment

The post Due Diligence; a sense of smell appeared first on David Werdiger.

source https://davidwerdiger.com/2023/09/due-diligence-sense/

The post Navigating Wealth Beyond Rich Lists appeared first on David Werdiger.

source https://davidwerdiger.com/2023/09/navigating-wealth-beyond-rich-lists/

In many countries, family businesses are a significant part of the economy and an engine room of economic growth. They carry certain attributes that are often a mix of positives and negatives. It’s important for owners and stakeholders to understand what distinguishes them from non-family businesses, and how to leverage the positives and avoid the negatives. Here are a few to think about:

Patient Capital. Businesses that are not slaves to public markets or private equity fund exit timelines. They can have very long timeframes for their target returns, and can ride waves that might cause other businesses to have to shift dramatically or even fail. However, they can lack the urgency sometimes needed, or the drive for regular strategic renewal.

Making Quick Decisions. With a small number of decision-makers who may live in close proximity and see each other regularly, family businesses are often not bogged down by the bureaucracy of larger businesses or corporates. But they may see governance structures, independent voices and oversight as a waste of money.

Employing Family Members. Being able to tap into talent that you know and trust is great. That’s only as long as family members join the business for the right reasons, and with the right preparation, and the family has appropriate policies and mechanisms such as codes of conduct to manage conflict.

Purpose. Being part of something bigger than ourselves (family, community, organisation) is something people find very fulfilling. Whether or not you are a family member, it can be a huge motivation to join and stay, and a great reason to get up every morning.

Consider This: What are the attributes that makes your family business different to a similar business that is not family owned? Are these strengths or weaknesses? How can you use them to your advantage?

Further reading: https://www.forbesindia.com/article/insead/a-career-in-the-family-business-duty-or-choice/82753/1, https://www.manilastandard.net/business/business-columns/green-light/314290834/why-is-individuation-important-in-family-businesses.html, https://hbr.org/2022/09/does-your-family-business-encourage-dissent, https://www.businessdailyafrica.com/bd/opinion-analysis/ideas-debate/dealing-with-an-echo-chamber-family-business-3684340, https://www.moneycontrol.com/news/trends/the-rise-of-purpose-driven-leadership-in-family-businesses-7550971.html, https://www.bizjournals.com/charlotte/news/2021/06/08/family-business-governance-what-to-know.html, https://www.campdenfb.com/article/why-do-you-really-own-your-family-business, https://www.forbes.com/sites/dennisjaffe/2021/01/14/how-to-be-both-a-business-and-a-family-role-challenges-in-a-family-business/?sh=3d7125fb68a0, https://hbr.org/2020/05/create-a-culture-of-generosity-and-communication-in-your-family-business, https://www.forbes.com/sites/francoisbotha/2019/11/28/the-5-cs-of-family-business-success/#74b1ba4dd281, https://www.forbes.com/sites/maryjosephs/2019/04/29/for-family-businesses-strong-governance-is-the-secret-to-managing-risk/#72a262e74461, https://www.forbes.com/sites/sanyinsiang/2019/03/15/reinvention-hylouie-family-business/#2e3c40f34672, https://www.nextavenue.org/benefits-multigenerational-family-business/

Actionable Generational Wealth Succession 

For more in-depth, thought-provoking discussion points and further commentary on family and business conflict resolution, access my Familosophy newsletter archives by signing into our newsletter https://davidwerdiger.com. We will send you the archive links from there.

#familyoffice #wealthmanagement #conflictresolution #strategicmanagement #nextgensuccession #intergenerationalwealth #governance #leadershipdevelopment
#entrepreneurship

The post Family Business Superpowers appeared first on David Werdiger.

source https://davidwerdiger.com/2023/08/family-business-superpowers/

In many countries, family businesses are a significant part of the economy and an engine room of economic growth. They carry certain attributes that are often a mix of positives and negatives. It’s important for owners and stakeholders to understand what distinguishes them from non-family businesses, and how to leverage the positives and avoid the negatives. Here are a few to think about:

Patient Capital. Businesses that are not slaves to public markets or private equity fund exit timelines. They can have very long timeframes for their target returns, and can ride waves that might cause other businesses to have to shift dramatically or even fail. However, they can lack the urgency sometimes needed, or the drive for regular strategic renewal.

Making Quick Decisions. With a small number of decision-makers who may live in close proximity and see each other regularly, family businesses are often not bogged down by the bureaucracy of larger businesses or corporates. But they may see governance structures, independent voices and oversight as a waste of money.

Employing Family Members. Being able to tap into talent that you know and trust is great. That’s only as long as family members join the business for the right reasons, and with the right preparation, and the family has appropriate policies and mechanisms such as codes of conduct to manage conflict.

Purpose. Being part of something bigger than ourselves (family, community, organisation) is something people find very fulfilling. Whether or not you are a family member, it can be a huge motivation to join and stay, and a great reason to get up every morning.

Consider This: What are the attributes that makes your family business different to a similar business that is not family owned? Are these strengths or weaknesses? How can you use them to your advantage?

Further reading: https://www.forbesindia.com/article/insead/a-career-in-the-family-business-duty-or-choice/82753/1, https://www.manilastandard.net/business/business-columns/green-light/314290834/why-is-individuation-important-in-family-businesses.html, https://hbr.org/2022/09/does-your-family-business-encourage-dissent, https://www.businessdailyafrica.com/bd/opinion-analysis/ideas-debate/dealing-with-an-echo-chamber-family-business-3684340, https://www.moneycontrol.com/news/trends/the-rise-of-purpose-driven-leadership-in-family-businesses-7550971.html, https://www.bizjournals.com/charlotte/news/2021/06/08/family-business-governance-what-to-know.html, https://www.campdenfb.com/article/why-do-you-really-own-your-family-business, https://www.forbes.com/sites/dennisjaffe/2021/01/14/how-to-be-both-a-business-and-a-family-role-challenges-in-a-family-business/?sh=3d7125fb68a0, https://hbr.org/2020/05/create-a-culture-of-generosity-and-communication-in-your-family-business, https://www.forbes.com/sites/francoisbotha/2019/11/28/the-5-cs-of-family-business-success/#74b1ba4dd281, https://www.forbes.com/sites/maryjosephs/2019/04/29/for-family-businesses-strong-governance-is-the-secret-to-managing-risk/#72a262e74461, https://www.forbes.com/sites/sanyinsiang/2019/03/15/reinvention-hylouie-family-business/#2e3c40f34672, https://www.nextavenue.org/benefits-multigenerational-family-business/

Actionable Generational Wealth Succession 

For more in-depth, thought-provoking discussion points and further commentary on family and business conflict resolution, access my Familosophy newsletter archives by signing into our newsletter https://DavidWerdiger.com. We will send you the archive links from there.

#familyoffice #wealthmanagement #conflictresolution #strategicmanagement #nextgensuccession #intergenerationalwealth #governance #leadershipdevelopment
#entrepreneurship

The post Family Business Superpowers appeared first on David Werdiger.

source https://davidwerdiger.com/2023/08/super-powers/

The post Navigating Wealth Beyond Rich Lists appeared first on David Werdiger.

source https://davidwerdiger.com/2023/09/navigating-wealth-beyond-rich-lists/

In many countries, family businesses are a significant part of the economy and an engine room of economic growth. They carry certain attributes that are often a mix of positives and negatives. It’s important for owners and stakeholders to understand what distinguishes them from non-family businesses, and how to leverage the positives and avoid the negatives. Here are a few to think about:

Patient Capital. Businesses that are not slaves to public markets or private equity fund exit timelines. They can have very long timeframes for their target returns, and can ride waves that might cause other businesses to have to shift dramatically or even fail. However, they can lack the urgency sometimes needed, or the drive for regular strategic renewal.

Making Quick Decisions. With a small number of decision-makers who may live in close proximity and see each other regularly, family businesses are often not bogged down by the bureaucracy of larger businesses or corporates. But they may see governance structures, independent voices and oversight as a waste of money.

Employing Family Members. Being able to tap into talent that you know and trust is great. That’s only as long as family members join the business for the right reasons, and with the right preparation, and the family has appropriate policies and mechanisms such as codes of conduct to manage conflict.

Purpose. Being part of something bigger than ourselves (family, community, organisation) is something people find very fulfilling. Whether or not you are a family member, it can be a huge motivation to join and stay, and a great reason to get up every morning.

Consider This: What are the attributes that makes your family business different to a similar business that is not family owned? Are these strengths or weaknesses? How can you use them to your advantage?

Further reading: https://www.forbesindia.com/article/insead/a-career-in-the-family-business-duty-or-choice/82753/1, https://www.manilastandard.net/business/business-columns/green-light/314290834/why-is-individuation-important-in-family-businesses.html, https://hbr.org/2022/09/does-your-family-business-encourage-dissent, https://www.businessdailyafrica.com/bd/opinion-analysis/ideas-debate/dealing-with-an-echo-chamber-family-business-3684340, https://www.moneycontrol.com/news/trends/the-rise-of-purpose-driven-leadership-in-family-businesses-7550971.html, https://www.bizjournals.com/charlotte/news/2021/06/08/family-business-governance-what-to-know.html, https://www.campdenfb.com/article/why-do-you-really-own-your-family-business, https://www.forbes.com/sites/dennisjaffe/2021/01/14/how-to-be-both-a-business-and-a-family-role-challenges-in-a-family-business/?sh=3d7125fb68a0, https://hbr.org/2020/05/create-a-culture-of-generosity-and-communication-in-your-family-business, https://www.forbes.com/sites/francoisbotha/2019/11/28/the-5-cs-of-family-business-success/#74b1ba4dd281, https://www.forbes.com/sites/maryjosephs/2019/04/29/for-family-businesses-strong-governance-is-the-secret-to-managing-risk/#72a262e74461, https://www.forbes.com/sites/sanyinsiang/2019/03/15/reinvention-hylouie-family-business/#2e3c40f34672, https://www.nextavenue.org/benefits-multigenerational-family-business/

Actionable Generational Wealth Succession 

For more in-depth, thought-provoking discussion points and further commentary on family and business conflict resolution, access my Familosophy newsletter archives by signing into our newsletter https://DavidWerdiger.com. We will send you the archive links from there.

#familyoffice #wealthmanagement #conflictresolution #strategicmanagement #nextgensuccession #intergenerationalwealth #governance #leadershipdevelopment
#entrepreneurship

The post Family Business Superpowers appeared first on David Werdiger.

source https://davidwerdiger.com/2023/08/super-powers/

(no spoilers) There’s a wonderful scene toward the end of the final season of the popular TV series Ted Lasso where team owner Rebecca Welton attends a meeting where a “Super League” is pitched. She’s the only female at a board table dominated by old white men, and was rightly apprehensive about even attending the meeting for a host of reasons.

But she speaks up against the plan, which is motivated entirely by its potential for huge profits. “Just because we own these teams doesn’t mean they belong to us.”

This succinctly speaks to the higher purpose of stewardship rather than ownership, and to the notion of considering other stakeholders in an enterprise. A sporting club is often an enterprise with a long history, and one that is expected to endure well beyond the tenure of whomever happens to own it or be on the board.

Whether a sporting club, a non-profit, a family enterprise or generational family wealth, the common thread is the intended longevity relative to the generation who find themselves in charge. In all of those cases, the enterprise does not belong to the owners or directors. Their role is to steward, and eventually step aside for someone else, leaving things in better shape than they found it.

Sometimes in families, it takes an audacious rising generation that might break with previous norms to remind everyone of this important principle.

Consider This: How do the incumbent generation in your family see their roles as leaders (or owners or directors or appointors)? How do the rising generation see their current roles and future roles? What discussions have been had across generations on these topics?

Further reading:

https://www.jdsupra.com/legalnews/why-family-enterprises-need-to-develop-8658356/, https://www.thepublicdiscourse.com/2022/11/86006/, https://international-adviser.com/when-should-families-start-succession-planning/, https://www.wealthmanagement.com/high-net-worth/whose-money-part-3-defining-values, https://www.wealthmanagement.com/estate-planning/whose-money-part-2-build-relationships-based-trust, https://www.forbes.com/sites/joshuastein/2020/05/19/the-long-term-burdens-of–family-owned-real-estate/#1f7e06967c5e, https://www.forbes.com/sites/forbescoachescouncil/2019/06/18/the-third-commandment-of-family-business-succession-understand-the-familys-rights/#134f34c354d5

Actionable Generational Wealth Succession 

For more in-depth, thought-provoking discussion points and further commentary on family and business conflict resolution, access my Familosophy newsletter archives by signing into our newsletter https://DavidWerdiger.com. We will send you the archive links from there.

#familyoffice #wealthmanagement #conflictresolution #strategicmanagement #nextgensuccession #intergenerationalwealth #governance #leadershipdevelopment
#entrepreneurship

The post Does it belong to us? appeared first on David Werdiger.

source https://davidwerdiger.com/2023/08/does-it-belong/

Family and business makes for a complex mix, essentially because of conflict of interest. At any time, those involved wear a mix of ‘hats’: family, owner and employee. This sometimes makes decision making very difficult: what comes first – family or business? Do we give family members a job even if they don’t deserve it?  What if they aren’t performing? How much do we pay them? At the appropriate time, do we gift the business to them, sell it to them, or just sell it for cash?

Depending on which ‘hat’ you are wearing, you may have very different answers to these and many other questions relating to the family business.

While it’s very hard to separate these parts of ourselves – for example it’s hard to just be the the boss and fire a family member who isn’t performing – we can maintain an awareness of the spill over effects to the others hats we wear, and to the family at large.

When approaching these complex decisions, it can be helpful to consider what they would be wearing each separate hat, and then weigh up which hat is most relevant, and the wider implications of the decision. Having externals at the decision table can help clarify which hat are influencing decisions, as family members are highly subjective.

Consider This: Does your family have policies regarding family members and any operating assets? Do family members have to pass a bar to gain employment? Are they paid market salaries? Do you account for the increase in value created by some family members working in the business?

Original articles: https://www.entrepreneur.com/growing-a-business/how-to-fire-a-family-member-in-a-family-run-business/248308, https://hbr.org/2022/09/merit-or-inherit-how-to-approach-succession-in-a-family-business, https://www.thomasnet.com/insights/10-reasons-why-your-kids-don-t-want-to-take-over-the-family-business/, https://www.businessdailyafrica.com/bd/opinion-analysis/ideas-debate/why-it-s-a-good-idea-for-family-businesses-to-form-boards-3719342, https://www.entrepreneur.com/en-in/leadership/12-family-business-heirs-on-navigating-their-way/387203, https://www.forbes.com/sites/theyec/2020/10/08/four-considerations-when-passing-the-family-business-to-the-next-generation/?sh=7a79932b4213

Actionable Generational Wealth Succession 

For more in-depth, thought-provoking discussion points and further commentary on family and business conflict resolution, access my Familosophy newsletter archives by signing into our newsletter https://DavidWerdiger.com. We will send you the archive links from there.

#familyoffice #wealthmanagement #conflictresolution #strategicmanagement #nextgensuccession #intergenerationalwealth #governance #leadershipdevelopment
#entrepreneurship

The post Succession of a Family Business appeared first on David Werdiger.

source https://davidwerdiger.com/2023/08/succession-of-family-business/