When it comes to advisors, I have two simple rules:

1. Get good advisors
2. Listen to them

Family advisors need additional skills because they must work with the various members or governance structures of a family, and key people & structures may change with time. They need to know about communication, in order to help the family members themselves communicate well.

They need to understand family dynamics, and get to know the ins and outs of the families they deal with. They may need to act as facilitators of family discussions and formal meetings, to help the family develop the ability to have open discussions and make collective decisions. To do this effectively, they need to be independent, and have the ability to say things that the family needs to hear (even though they may be difficult or confronting).

They, or their firms, need to be able to talk to multiple generations within the family, so as to maintain a parallel transition – as generational control passes within the family, the advisor relationships may also change. As part of that transition, it may be helpful to bring younger family members into advisor discussions.

In addition, they may want to be across emerging trends like impact investment, cybersecurity, and online reputation management.

A family advisor is so much more than a wealth manager, or the family lawyer or accountant. It can be rare to find all the skills needed in a single individual.

Consider This: Do you have an independent family advisor? Are you able to discuss anything the family needs with that person? Does that person have a relationship with multiple family members or across multiple generations? When did you last do an audit of your advisor relationships to ensure they are meeting the family’s needs now and in the future?

Original articles: https://www.forbes.com/sites/francoisbotha/2019/10/18/the-top-5-new-generation-advisors-every-family-office-needs/#586314691369, https://www.investmentnews.com/article/20191118/FREE/191119941/ria-consolidation-could-put-2-4-trillion-in-play-over-next-decade, https://www.ftadviser.com/your-industry/2019/11/29/advisers-urged-to-include-clients-families-in-meetings/, https://www.fa-mag.com/news/the-ultra-wealthy-prefer-multi-family-offices-to-wealth-managers-53825.html, https://www.forbes.com/sites/dennisjaffe/2020/03/18/family-wealth-advisors-need-skills-in-family-dynamics/#34154180ecb2

If you are a business owner, lawyer or accountant to them, my advisory services may be the perfect match to navigate the tough decisions in strategizing #intergenerational relationships.

There are a number of use cases where I have worked with families that may be adjacent to your practice. Let me help you:

· help family develop shared vision, charter etc
· mediate family conflict management
· mentor rising generation
· coach family through the emotional side of business sale – before, during, after
· help family businesses with ‘soft’ aspects of succession planning

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 Consider these Family Advisor Traits appeared first on David Werdiger.

source https://davidwerdiger.com/2022/11/traits-family-advisor/

There is more to maintaining family wealth through generations than getting the best financial advisors and managers for operating assets.

Families of wealth must learn how to work together in the sharing of assets. A key part of that is to integrate their wealth management with their values. That means the values need to be articulated within the family. Then, the family needs clear and open dialogue discussing values as well as financial assets, and why preserving wealth matters to the family and the world around us. That is the foundation upon which successful transition is built.

To raise the next generation responsibly with wealth may require adapting the family’s middle-class orientation to add new strategies where solid values are taught and demonstrated. Large sums of money can have damage on children’s ability to craft their own lives and break out of their parents’ shadow.

When people base their self-worth on financial success, they experience feelings of pressure and a lack of autonomy.

Few families who come to wealth have been prepared for these tasks. They often don’t know these new strategies are even necessary. That is where external advisors can be helpful.

Consider This: Has your family articulated its values? Does that include the values of the rising generation? What is your family’s approach to educating the rising generation with the appropriate values so they can be comfortable in their own skin and good custodians in the future?

Original articles: https://www.coastalbreezenews.com/articles/the-value-of-your-values/, https://bigthink.com/politics-current-affairs/great-wealth-transfer, https://www.valuewalk.com/2020/02/family-wealth-planning/, https://www.scmp.com/presented/business/topics/defining-family-office-landscape/article/3076183/what-chinese-family, https://nypost.com/2020/04/10/investing-life-in-money-leads-to-lack-of-community-study/

[reposted with permission]

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 Values of a Successful Family Business appeared first on David Werdiger.

source https://davidwerdiger.com/2022/11/family-business-values/

Family businesses aren’t just businesses that happen to be owned and/or managed by a family. Factors like a long-term perspective, and the multiple/overlapping roles of owners, employees and family members are both strengths and weaknesses. These factors mean that family businesses need another set of principles to help them stay strong.

Because many stakeholders have multiple hats, separation of powers is very important. Everyone needs to understand what their roles are (employee, manager, owner, etc) and the scope of each role.

Because family business transitions fail most often because of poor communication, a governance structure that includes independent director(s) is essential for mature family businesses. This helps the business and family stay true to its values, put policies in place to manage conflict, and maintain open communication and accountability. Good governance ensures that issues are dealt with in the appropriate forum at all times.

Another reason for failure is lack of strategic renewal. External voices on a board can ensure regular strategic planning happens, established ideas are challenged, and all stakeholders’ voices are heard.

Consider This: Does your family operating business have a board? Does your family have a council (or similar), separate from the governance of any operating businesses? At family meetings, who is the chair? Does everyone who attends genuinely have a voice?

Original articles: https://www.forbes.com/sites/forbescoachescouncil/2020/01/17/15-tips-for-navigating-family-business-challenges/#462bab2b8a92, https://www.smartcompany.com.au/business-advice/family-business-constitution/, https://hbr.org/2020/01/managing-the-trickiest-parts-of-a-family-businesses, https://hbr.org/2020/01/every-family-business-needs-an-independent-director, https://hbr.org/2020/02/should-your-family-business-have-a-no-in-laws-policy, https://hbr.org/2020/02/what-makes-a-family-business-last, https://www.forbes.com/sites/rochellemclarke/2020/02/29/6-tips-for-working-with-family-and-friends/#4de7af5612f9

[Reposted with permission]

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 Strength of Family Business appeared first on David Werdiger.

source https://davidwerdiger.com/2022/11/family-business-strength/

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 Family Business Succession appeared first on David Werdiger.

source https://davidwerdiger.com/2022/10/family-succession/

Family wealth can be a double-edged sword. With few financial burdens or limitations, one can live a very comfortable life, use the family wealth and connections to create almost any career of life path, and make the world a better place through philanthropy and impact.

But there is a dark side, particularly to inherited wealth: guilt and shame at ‘unearned privilege’ (I don’t like the term, but it works for this), how the wealth was created which may not sit comfortably with contemporary environmental thinking, and the challenges of finding purpose. Wealth can also be an amplifier and source of family conflict.

Most often, family members deal with a mix of these feelings.

In the Tale of the Two Wolves, the grandfather uses a metaphor of two wolves fighting within him to explain inner conflict to his grandson. When his grandson asks which wolf wins, the grandfather answers that whichever wolf he chooses to feed is the one that wins.

To paraphrase Henry Ford, whether you think family wealth is a positive for you or a negative, you are right.

Consider This: What are your family’s narratives about wealth? Have these ever been discussed or articulated? How are they different across generations?

Further reading: https://www.shreveporttimes.com/story/money/2022/08/05/your-wealth-culture-why-matters/10239286002/, https://www.ft.com/content/26806bc4-ff1b-4c7c-b4b0-168486c64ab8

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 Two Wolves appeared first on David Werdiger.

source https://davidwerdiger.com/2022/10/two-wolves/

How to deal with family members by marriage poses significant challenges to wealthy families. Should they be allowed to work in the family business? If so, should there be a ceiling on their authority (stock, voting rights, etc)? Do they have a seat/voice at family meetings? What if the only person in the rising generation with the skills to be involved in the family business is a child-in-law? What to do when a marriage is on the rocks (and the child-in-law has a role)?

There are no clean-cut answers to these questions and not even best practice, because each family is different. It comes down to a few general guiding principles, together with the family’s own culture and beliefs regarding the role of children-in-law (some families have blood line rules that have existed for generations and challenging them is near impossible).

Here are some of my favourite aphorisms:

• You enter a family by birth or marriage, and leave by death or divorce (and divorce is not as final as death).
• If a child-in-law doesn’t have an actual voice at the table, their partner may be their proxy voice.
• Don’t hire whom you can’t fire (applies to any business, and any person)
• What works or doesn’t work in another family is no guide to what will work or not work in your family.

Rather than be reactive, develop and articulate your own family’s guiding principles and then setup governance to ensure they are applied as equally and fairly as possible.

Consider This: Does your family have a culture regarding how in-law children are treated? Have you ever had to fire a family member? How do you deal with pillow talk about family business/wealth? Do you have any (formal or informal) induction process for in-laws?

Original articles: https://www.forbes.com/sites/francoisbotha/2019/11/30/when-families-welcome-new-family-members–cultures-what-to-consider/#766fa5ca3f1e, https://www.jdsupra.com/legalnews/family-matters-can-a-family-business-78318/?, https://www.chroniclelive.co.uk/special-features/look-family-businesses-divorce-17022880, https://www.heraldtribune.com/business/20191028/nepotism-is-keeping-it-all-in-family

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 Office by Marriage appeared first on David Werdiger.

source https://davidwerdiger.com/2022/10/family-office-by-marriage/

The family office space is constantly evolving. This is driven in part by the investment flavour of the month, global economic/political trends, wealth transition within families, the family follow-me-go-round (families looking at what others are doing), and the general competitive environment amongst FO offerings.

Essentially, a family office is a set of services used by a wealth family to manage its wealth and other associated needs. There are no rules for how a FO can or should operate; it ought to be driven by demand and need. The other important issue is market segmentation: the FO needs of a family with 5B+ of assets are very different to those of a family with 500M, and these differences are qualitative as well as quantitative.

Because the SFO and MFO models have expected structures and associated constraints, new service models are being developed, like the virtual family office. Offerings like this evolve to meet demand, and are needed because so many families are global, because technology can deliver such an offering in a distributed and secure manner, and because no single solution can incorporate the best of everything.

Consider This: Do you have/use a family office? Do you know why? Have you mapped the set of services you need against your set of providers and scored/benchmarked them? Have you considered the changes that your family may face over the next 5-10 years and whether the set of services you have now will meet your ongoing needs over that period?

Original articles:
https://www.forbes.com/sites/francoisbotha/2019/10/11/why-family-office-advisors-are-fast-becoming-extinct-and-how-to-avoid-it/#6547275049cf, http://www.campdenfb.com/article/family-office-principals-unconvinced-next-generation-readiness-succession, https://www.forbes.com/sites/robclarfeld/2019/10/28/what-is-a-family-office-and-do-i-need-one/#34c6e8395da1, https://www.forbes.com/sites/francoisbotha/2019/10/30/family-office-insights-10-trends-that-will-affect-family-offices-in-2020/#5a9ad1123fb8, http://www.campdenfb.com/article/big-shifts-family-office-succession-and-recruitment-2020, http://www.businessworld.in/article/Multi-Family-Office-Over-Single-Family-Office/04-01-2020-181434/, https://www.forbes.com/sites/francoisbotha/2020/01/08/opportunities-abound-within-the-family-office-space/#57a083828693, https://www.fa-mag.com/news/russ-prince–innovations-in-the-family-office-model-53377.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 Navigating Family Office Trends appeared first on David Werdiger.

source https://davidwerdiger.com/2022/10/navigsting-family-office-trends/

“How do I transfer wealth to my children without spoiling them?” That would be the most common question I am asked, and for most people, stands at the heart of the challenge of wealth transition.

But often this question masks what parents really want, e.g. “how do I get my children to do/be what I want?” That question is not about wealth, but about parental power and control. And when parents say “I don’t want to rule from the grave”, often they actually do, but just don’t want to make it quite so obvious.

There are no simple answers, nor even a set of tactics that can be applied. Rather, these questions are the starting point of a family relationship journey, which can lead to a stronger and more robust family that understands its purpose and shared values, and is well governed.

As much as wealth creators and incumbent controllers of family wealth want to control the future of their family, an important part of the journey is learning how to let go, which is often needed to help your children to become everything they can be.

Consider This: Do you (incumbent generation) have a clear understanding of your family’s (wealth) goals? Is there consensus on this amongst those now in control of the wealth? What steps have you taken to (a) find out what the rising generation want, and (b) communicate what you want to them?

Original articles: https://www.forbes.com/sites/rochellemclarke/2019/11/22/top-holiday-conversations-for-families-in-business/#6f82c4a52486, 

https://www.forbes.com/sites/forbesfinancecouncil/2019/11/25/keep-thanksgiving-about-thanksgiving-by-connecting-wealth-and-purpose/#642db627799c, 

https://www.thinkadvisor.com/2019/10/02/how-a-ubs-exec-gets-families-to-open-up-about-wealth-transfer/, 

https://www.nytimes.com/2019/11/06/your-money/tips-to-ease-family-inheritance-tensions.html, 

https://www.theatlantic.com/family/archive/2019/10/big-inheritances-how-much-to-leave/600703/, 

https://www.wsj.com/articles/trying-to-control-your-heirs-behavior-from-the-grave-often-backfires-11571623620

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 Transition Planning – Letting Go appeared first on David Werdiger.

source https://davidwerdiger.com/2022/10/transition-plan/

Women are at least 50% of the population, yet historically have been poorly represented in the wealth industry – as custodians and managers of family wealth, in family business, and as advisors. But that is changing on all fronts.

The percentage of wealth in the world held by women is steadily growing – as a result of inheritance (females generally outlive their husbands), divorce and entrepreneurship. In the Middle East, 20-40% of wealth is held by or for women. In Asia, there has been a surge of wealth creation by female entrepreneurs. A new female-led multi family office in San Francisco is taking a different approach to wealth management by incorporating socially-minded investment and personal branding.

Males and females have different investment strategies: for women wealth is a means to an end, while many men see the accumulation of wealth as a goal unto itself. We raise girls to be savers and boys to be risk-takers. Finally, there is significant talent within the female members of wealth families which is waiting to be unlocked, and potentially wasted if not given the right opportunities.

Consider This: What roles do female members have in your family (business, wealth management, philanthropy)? What if anything is holding them back? Are there cultural barriers in your family to their advancement? Are they sufficiently educated to be effective wealth custodians?

Original articles: https://www.worth.com/a-new-kind-of-family-office/, https://international-adviser.com/women-changing-the-wealth-landscape-in-the-middle-east/, https://www.ft.com/content/9bb4d056-d928-11e9-9c26-419d783e10e8

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 50% wealth custodians appeared first on David Werdiger.

source https://davidwerdiger.com/2022/10/50-50-wealth/

Family philanthropy can be a very effective way to bridge generations and engage the rising generation. However, according to a recent poll from Key Private Bank, there are significant differences between parents and children on matters of giving.

Most parents are not discussing philanthropy with their children, let alone agreeing on causes. 82% of advisors say very few clients involve the next generation in family philanthropy. Faith-based causes represent 73% of interest from parents, but only 3% from children. On the flip side, ESG causes are 3% from parents, and 59% from children.

It is self-evident that a lack of communication would only feed a further divergence of interests between generations. With increasing life expectancies and therefore a greater overlap between parents, children, and grandchildren, there are two likely outcomes: find common ground across generations, or fall into conflict.

Consider This: Who makes the philanthropy decisions in your family? To what extent are younger family members informed about choices or engaged in the decision making process?

Original articles: https://www.forbes.com/sites/francoisbotha/2020/07/29/how-the-worlds-next-generation-of-ultra-wealthy-are-redefining-what-it-means-to-give-back/#112919c85aad, https://www.prnewswire.com/news-releases/lack-of-family-conversations-about-philanthropy-fuels-differences-of-opinion-finds-key-private-bank-poll-300920068.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 Family Led Philanthropy appeared first on David Werdiger.

source https://davidwerdiger.com/2022/10/family-philanthropy/