Family offices (FOs) come in so many shapes and sizes that the term ceases to have specific meaning. It’s simply a set of services provided for a family.

The origins of the FO often determine their primary focus: there are plenty of FOs that are simply vehicles for co-investment, or glorified reporting platforms.

Having a FO essentially means taking a professional approach to managing the affairs of the family. It’s interesting that 92% of FO leaders believe the most successful FOs have external hires in key leadership positions.

What your FO will include depends on with your goals, so it’s important to consider them before you set one up (or start searching for a suitable MFO), and then to review against goals regularly.

The stuff everyone seems to look for are financial and investment services, but it’s hard to truly differentiate in those services.

The most ‘value’ you will actually get from FO services are the things that are the hardest to measure: creating continuity, cohesion and engagement across families for generations, helping the family define its purpose, and promoting family unity, harmony and happiness.

The rising importance of sound formalized investment management governance goes hand-in-hand with enhanced family governance.

Consider This: Does your family office have clearly articulated goals (both financial and non-financial)? How often do you measure performance against those goals? How often do you review the goals to ensure they are relevant to the family as it evolves?

Original articles: https://www.forbes.com/sites/forbesfinancecouncil/2021/07/19/how-a-family-office-can-uncover-goals-with-a-family-meeting/?sh=7b59ff99c1f5, https://www.forbes.com/sites/forbesrealestatecouncil/2021/06/29/how-to-build-a-family-office/, https://www.forbes.com/sites/paulwestall/2021/06/08/family-office-to-keep-it-in-the-family-or-not-to-keep-it-in-the-family-that-is-the-question/?sh=1cfe05b53f70, https://www.finews.asia/services/advertorials/34441-trust-administration-fiduciary-services-estate-planning-wealth-structuring-family-office-family-governance-trusts, https://www.kiplinger.com/retirement/estate-planning/602492/do-i-need-a-family-office-a-guide-for-the-rich-and-not-so-famous, https://www.campdenfb.com/article/rising-importance-social-capital-family-offices, https://www.lexology.com/library/detail.aspx?g=8b8eae4c-061f-47c9-8399-c5468b03e742, https://www.forbes.com/sites/johnjennings/2020/08/04/how-to-decide-what-your-family-office-should-outsource/#20f2c87e221c

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

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Wealthy people are a soft target at the best of times. The media revels in sensational stories about wealthy families, especially when things go wrong. And if that wasn’t enough, neo-socialists in the US preach redistribution and question whether the world should have billionaires.

The emerging “wealth minimisation” movement encourages inheritors to redistribute “excess wealth” for the betterment of society. In some cases, this is about making up for the “harm” done by the wealth creation in the first place, which plays to feelings of guilt. There is some overlap with those who advocate destruction of statues that are no longer politically correct.

What does all this mean to someone born into a wealthy family? Forming a positive identity about their wealth can be a huge challenge. The “acquirer’s and inheritors dilemmas” can lead to feelings of shame.

Families need to get ahead of this, and have open discussions about their family’s wealth to encourage positive feelings. Family philanthropy and impact investment can be framed as ways to serve the wider community, rather than being an act of penance.

Consider This: At what age did you start talking to your children about the family wealth? Do they have the tools to be comfortable with their wealth in dealings with with friends, colleagues and advisors? Are they able to discuss concerns within the family?

Further reading: https://www.yesmagazine.org/issue/how-much-is-enough/2021/08/10/rich-redistribute-money, https://www.kiplinger.com/personal-finance/603205/ok-boomer-vs-avocado-toast-how-to-talk-money-across-generations, https://www.rgj.com/story/news/money/business/2021/02/18/8-important-money-conversations-have-your-family-brian-loy/6793796002/, https://www.forbes.com/sites/rainerzitelmann/2019/12/16/the-six-most-overrated-factors-in-getting-rich/#59a7f68e7f75, https://www.kiplinger.com/article/retirement/T064-C032-S014-wealth-shame-when-wealth-changes-your-life.html, https://www.nytimes.com/2019/08/02/your-money/parenting-wealth-discussions.html

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 Wealthy; Pride, Guilt or Shame appeared first on David Werdiger.

source https://davidwerdiger.com/2023/05/wealth-guilt-2/

Family business succession plans (or the ideas for them that are embedded in the minds of the incumbent generations) are often loaded with assumptions. For example: that the “presumed/nominated successor” wants to join the family business, that they are a like-for-like replacement of the incumbent, that the business should largely keep doing what it does for the foreseeable future.

Any robust business (or organisation such as the family that controls the business) should be prepared to challenge assumptions on a regular basis. Unfortunately, family business do this less than other businesses for several reasons. Firstly, the attributes of grit and self-belief so essential for any founder make it hard for them to adapt and change. Also, family members stay in executive roles in family businesses for much longer, which can lead to them becoming stale.

Rather than using terms like “succession” which can carry assumptions like the ones mentioned, it’s more helpful to think of “continuity” and to do so in the broadest terms (i.e. not just the business in its present form, but the family as a evolving system).

In many fields, education has shifted from training people for specific occupations to teaching people the skills to learn new skills, and to take on jobs that don’t yet exist. One of the most important skills the rising generation must learn is to be adaptable and open to regular strategic renewal, rather than to be carbon copies of their parents.

Consider This: what assumptions are implicit in your family’s (documented or not) succession plan? what skills is the rising generation in your family learning that will serve them in future leadership roles?

Original articles: https://www.campdenfb.com/article/generational-handover-family-business-it-better-appoint-internally-or-externally, https://www.entrepreneur.com/leadership/heres-why-your-children-should-not-inherit-your-business/446621, https://www.campdenfb.com/article/redefining-wealth-succession-comes-fore-family-businesses, https://business.inquirer.net/371556/succession-in-family-businesses-heres-the-perfect-solution-if-the-next-generation-doesnt-want-to-take-over, https://www.forbes.com/sites/mindydiamond/2021/01/27/choosing-a-successor-5-lessons-learned-in-our-own-succession-planning-process/?sh=2657968c15c8, https://www.inc.com/christine-lagorio-chafkin/carlson-family-business-gold-bond-stamps.html

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” & Strategic Renewal appeared first on David Werdiger.

source https://davidwerdiger.com/2023/04/succession-strategic/

David will be speaking at Prestel & Partner’s Family Office Forum in Singapore on 16-17 May.

Topic: Pruning the Tree
Many families that share significant assets may at some point consider whether to continue managing their wealth, business, or philanthropy together or going their separate ways. These questions can arise when a conflict or crisis hits, and they are forced to make decisions.

The post Speaking at Prestel & Partner – Singapore appeared first on David Werdiger.

source https://davidwerdiger.com/2023/04/speaking-at-prestel-partner-singapore/

The question “how much is enough?” and its corollary “how much should I give my children?” is one many families ask but very few consider how to go about answering. I’ve gone as far as modelling decades of projected expenditure for a family, and the returns needed to provide for it. To be sure, such a model makes many assumptions, but it’s a starting point and one that does roughly put a family’s financial assets and liabilities in perspective.

Economist Ben Graham, known as the father of value investing, was an inspiration for Buffett and Munger. But while the latter continued investing as a full-time occupation well into old age, Graham retired to pursue his passions: literature, and the arts. When asked by a journalist why he quit investing, he replied: “Why should I try to get any richer?”

Graham reached an understanding few people do. He had enough money, but he didn’t have enough time. So he refuse to invest more of his most valuable asset to create ‘just’ more money. For Graham, investment was a means, not an end – an occupation but not a life-long passion. Graham knew the answer to “how much is enough?”

Consider This: Do you know how much is enough for you and your family? How much do your children think is enough? What is the best use of your most precious resource – your time?

Further reading:

https://www.forbes.com/sites/forbesfinancecouncil/2022/08/25/purposeful-wealth-transfer-planning/?sh=3f57240d6588, https://www.forbes.com/sites/forbesbooksauthors/2021/08/25/your-legacy-how-to-create-a-multigenerational-estate-plan/?sh=344df5943e27, https://www.bizjournals.com/charlotte/news/2019/09/16/planning-for-the-business-transition-keeps-owners.html, https://www.fool.com/retirement/2019/07/28/15-downsides-to-being-rich.aspx

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 How Much is Enough? appeared first on David Werdiger.

source https://davidwerdiger.com/2023/04/how-much/

Wealthy people broadly come in two flavours – wealth creators and wealth inheritors – and each have very different characteristics.

Attitudes to money and wealth are usually established as we grow up and largely remain with us for the duration of our lives. Creators often grow up without a lot of money and therefore have different attitudes to spending and the value of a dollar, are uncomfortable talking about it with their children, and often look at the wealth they created through an “ownership” rather than a “stewardship” lens. If they have created the wealth through starting a business, they also have a set of beliefs (resilience, confidence, sense of invincibility) common among business founders and entrepreneurs.

Inheritors view the world very differently, sometimes feeling conflicted or guilty for the “sin” of not having to earn it like most others. Depending on their upbringing, they may not have a sense of the value or spending power of money. They are often challenged to develop their own identity – not wanting to be known as “the child of …”, and needing to make their own mark. Their mark may often be in the non-financial arena (because their parents already made it financially).

In order to effectively transmit or transition the wealth to the next generation, both creators and inheritors need to understand their difference, and learn new skills (raising children with healthy money attitudes, adopting a “stewardship” approach, finding meaning beyond money).

Consider This: Have you considered how your attitudes to wealth might differ compared with your parents or children? Have you had family discussions about these differences and what they mean to each of you?

Original articles: https://edition.cnn.com/2019/07/23/success/financial-enabling/index.htm, https://www.fa-mag.com/news/russ-prince–among-super-rich–self-made-wealthy-and-inheritors-think-differently-45566.htm, https://www.fastcompany.com/90372281/5-lies-youve-been-told-about-generational-wealth, https://www.forbes.com/sites/forbesbooksauthors/2019/08/06/better-together-stewarding-wealth-and-wisdom-to-prevent-affluenza/#2e9f03807a58

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 Are you a Wealth Steward appeared first on David Werdiger.

source https://davidwerdiger.com/2023/04/wealth-steward-2/

Family business has positives and negatives – our aim should be leverage the positives and seek to mitigate the negatives. One important distinguishing feature of family businesses is that they can embody a sense of purpose.

The original purpose of the business founder may have been wealth creation. However, as the business evolves and additional family members join, it’s an opportunity for the family as a group to discuss and articulate their collective values and purpose, and then make them an essential part of the family business.

Purpose and profit are not mutually exclusive; purpose must drive profitability. It need not be political either. While early thinking was that purpose of the corporation is to “maximise shareholder value”, more recently this has broadened into thinking about “stakeholders” which includes employees and society at large.

This can be challenging for many corporations. But a business that is owned by a small group who are connected by familial ties are in a better position to both articulate their purpose, and take a long-term view in terms of how they manage and operate the business. That way, the business is just one piece of the family’s “social capital” that helps it achieve the broader family mission.

Consider This: To what extent is your family business “values driven”? Has your family discussed and considered your shared purpose? and how that translates into how you use the family capital (both operating and non-operating assets)?

Original articles: https://www.campdenfb.com/article/nine-principles-purpose-why-doing-good-good-family-business, https://www.entrepreneur.com/article/364853, https://www.forbes.com/sites/dennisjaffe/2021/02/24/from-shareholder-primacy-to-stakeholder-primacy-how-family-businesses-lead-the-way/?sh=c477f2321ede, https://www.rte.ie/brainstorm/2020/0623/1149060-family-business-ireland-coronavirus/, https://www.industryweek.com/leadership/article/21119925/does-your-family-business-have-what-it-takes-to-endure

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 The Purpose in Family Business appeared first on David Werdiger.

source https://davidwerdiger.com/2023/04/family-business-purpose/

It’s a most quoted statistic – “just 13% of family businesses survive the third generation” – and it has finally been challenged. It comes from a single study of US manufacturing companies in the 1980s, and for some reason it has stuck and become almost axiomatic.

But it is deeply flawed. Most importantly, it never compared family businesses to non-family businesses (family businesses on average do last longer), and it also never considered the reasons why those businesses did not continue. Besides, not all businesses are meant to last that long – among other things it’s a function of their industry and their ability to do regular strategic renewal (and for some family business, the latter is a huge challenge).

The other issue is the conflation of this trope with the well-known “shirtsleeves to shirtsleeves” proverb. Enduring family business is not the same as enduring family wealth. Plenty of families have been able to parlay an operating business (which is usually how the wealth was created) into a healthy mix of diversified assets that can support the family for decades.

So forget blanket generalisations about family businesses and focus on their unique attributes that are a mix of strengths and weaknesses.

And view the proverb as a statement about the culture of wealth and how it affects those who created it, those born into it, and those well removed from its creation.

Consider This: How do attitudes to wealth in your family differ between generations? How long do you think your business (or any business) ought to last?

Further reading: https://hbr.org/2021/07/do-most-family-businesses-really-fail-by-the-third-generation, https://www.thinkadvisor.com/2021/05/25/what-wealth-really-means-to-4-different-generations/, https://www.forbes.com/sites/dennisjaffe/2021/04/28/how-family-business-leaders-make-room-for-new-generations-the-right-time-and-the-right-way/?sh=45833f283933, https://www.kiplinger.com/retirement/estate-planning/601798/how-to-help-your-family-wealth-last-for-generations, https://thriveglobal.com/stories/what-successful-family-businesses-do-to-survive-beyond-the-three-generation-curse/, 

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 The 3-Generation-Trope appeared first on David Werdiger.

source https://davidwerdiger.com/2023/04/3-generation-trope/

Research has shown that in HNW families, daughters were rarely encouraged nor received support to pursue entrepreneurship education. Entrepreneurial families often prepare their daughters and sons differently for their careers. Cultural factors and their associated gender biases may result in the problem being far more pronounced.

Things are changing. Some 82 per cent of women from wealthy families expect to inherit substantial wealth over the next 20 years, but 41 per cent of women are currently not involved in family financial decision making. They need to start preparing themselves. The role of women within wealthy families is also shifting, in part due to the rising generation having a less traditional outlook on life. Family businesses are able to play a critical role in helping break glass ceilings that perpetuate gender roles.

There are changes in the wind on the investment and advisor spaces too. Millennials and women value investment principles that have a positive impact on challenging issues. HNW women are often less confident about making family financial decisions, prompting the need for investment relationship dynamics to change. To remain competitive, advisors must consider a truly consultative approach; female advisors are well-suited for the job. Women – more of whom will control significant wealth over the next 10 years – prefer to work with female advisors.

Consider This: Does your family treat male & female children differently? Are they given the same choices & opportunities within the family enterprise? Are there cultural or historical gender biases in your family? Is this a source of intergenerational conflict?

Original articles: https://www.eurekalert.org/pub_releases/2021-06/uoo-gbi060721.php, https://www.greenqueen.com.hk/women-prefer-to-work-with-female-advisors-now-is-the-moment-for-esg-customisation/, https://www.forbesindia.com/article/bharatiya-vidya-bhavan039s-spjimr/addressing-the-novel-fault-lines-in-family-business/67115/1, https://www.jdsupra.com/legalnews/cracking-the-glass-ceiling-empowering-6627462/, https://www.campdenfb.com/article/how-raise-your-succession-game-next-gens-family-business, https://www.bnamericas.com/en/news/almost-25-of-family-businesses-have-a-female-presence-on-their-boards, https://www.wealthadviser.co/2020/12/15/293551/growing-financial-power-next-generation-wealthy-women-prompting-change-within

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 The future is female appeared first on David Werdiger.

source https://davidwerdiger.com/2023/04/future-female-2/

Research has shown that 60 per cent of failed intergenerational family wealth transition are due to problems with trust or communication. Communication isn’t important in families. It is everything. If a family cannot communicate, it cannot function as a group. It’s that simple.

What does poor communication look like? An absence or lack of communication (e.g. “it’s none of their business”, “they don’t need to know”, “we know what is best for them”) is patronising, infantilising, and leads to a loss of trust. There is often hesitance to discuss family wealth or estate planning with family members because of the conflict it might cause. But not discussing simply leaves the latent conflict to fester. Some cultures have a strong concept of strictly obeying the mature generation – this has the potential to create interpersonal and internal communication barriers. Negative, emotional, distracting and damaging interactions among family members can lead to the “Family Drama Vortex”.

What does good communication look like? Creating a space where family members can ask and answer difficult questions like “What is our wealth for?”, “What is our family’s purpose?”, “What is our true value?”.  To communicate effectively, we need to listen. This may sound like a platitude, but not everyone can do it, especially when talking to someone we think we know well, such as our children.

A history of poor communication in a family means you have to work extra hard to regain trust and learn now to communicate well. To address toxic situations like the Family Drama Vortex, we must recognize that the drama and dysfunction are rooted in underdeveloped communication and interpersonal skills.

Because communication is difficult, especially across generations and borders, it can help to have external guidance and facilitation. That is best coming from a specialist, and not necessarily the ‘default’ choice of lawyers and accountants.

Consider This: How would you rate your own family’s ability to communicate? Are there some issues that “we don’t discuss” or that are shut down whenever they are raised?

Further reading: https://sg.asiatatler.com/life/rise-and-fall-of-family-wealth-how-to-achieve-financial-longevity, https://www.coutts.com/insight-articles/news/2021/investments/speech-therapy–our-guide-to-talking-wealth-with-your-family.html, https://www.wealthadviser.co/2020/12/04/293097/asias-wealth-management-industry-needs-ready-itself-great-wealth-transfer, https://onwallstreet.financial-planning.com/opinion/how-to-keep-multigenerational-wealth-in-the-family, https://e.vnexpress.net/news/business/generation-gap-communication-a-concern-for-family-concerns-4106858.html, https://www.ft.com/content/825947e6-bf2d-11e9-9381-78bab8a70848, https://www.forbes.com/sites/forbescoachescouncil/2019/04/26/is-your-family-business-in-turmoil-the-solution-could-be-communication/#792eb2e525ec, https://www.clevelandjewishnews.com/features/special_sections/legal_affairs/succession-planning-big-part-of-family-businesses/article_6cd9a79e-45b6-11e9-ab20-ff24b4e7b8fd.html, https://www.wealthmanagement.com/high-net-worth/hardest-part-planning-hnw-families-hnw-families, https://www.marketwatch.com/story/breaking-the-taboo-how-to-prepare-your-heirs-for-your-death-2019-03-07

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 Is communication important? appeared first on David Werdiger.

source https://davidwerdiger.com/2023/04/communication-importance/