It can be hard for rising gens to have the space to pursue their passions.

What if their family has zero appreciation for what their passion even is?

Oscar award winning movie CODA (2021) is the beautiful story of high school student and talented singer Ruby whose parents and brothers are deaf.

Her music teacher encourages her to sing, while her parents struggle to make ends meet in their fishing business. As the only hearing member of the family, she is needed on the boat and to interpret for the family.

Ruby’s internal conflict is core: do what’s best for her family or pursue her dreams?

After a setback where it becomes clear that she cannot do both, Ruby decides to forgo music school and join the family business full time. This ignites friction with her brother Leo, who tells her not to give up on her dreams.

 

The turning point comes when the family attend her choir recital.

The film shines in portraying how Ruby’s family gain an appreciation for her singing talents, and Ruby reciprocates. The scenes are brilliantly done.

You can guess how it ends; this isn’t a thriller with plot twists.

If you haven’t already seen it, please do.

 

The title CODA – children of deaf adults – refers to hearing children who are born to deaf parents. These children often experience communication, social, and cultural challenges because of the unique difference between the deaf and hearing worlds.

This is a helpful metaphor for family enterprises.

Sometimes, parents and children seem to live in different worlds.

That is not a signal that something is wrong with your family.

It’s just the way each are wired: physically, emotionally or socially.

 

That was certainly my lived experience.

It culminated in an exchange with my father, weeks before he passed, which highlighted the huge bridge between how we viewed the world.

I view it as a special moment – one of acceptance for me that acknowledged our differences.

 

The film demonstrates how efforts from both generations can bridge the gaps between them.

Ruby knew her parents could never hear her sing.

Yet they each found a way to convey what it meant.

Understanding the perspective of someone with a very different lived experience is hard at the best of times.

The emotional bonds of family can make it even harder.

Tension can come from implied obligations to the family enterprise.

 

This is where external and independent advisors can help.

They can mediate between generations within a family to build a bridge.

Help them develop a common language despite their differences.

 

Conversation Starters:

Does if feel like your parents/children are “deaf” to your needs and talents?

How does this manifest?

What have you done to bridge things between generations?

PS Watch the movie as a family then talk about it.

 

Further reading:

We Are the Generation That Doesn’t Want Relationships
Cook: Every generation has accomplishments, shortfalls
Is the Chinese succession model doomed to fail?
NEXT GENERATION ANXIOUS OVER SUCCESSION OF FAMILY FORTUNES
Family meetings: An important strategy for preserving wealth
The weigh-in: Should the next generation be obliged to continue their family business or legacy?

 

 

“Shirtsleeves to shirtsleeves in three generations” is the oft-quoted adage. It’s been called a curse.

The adage exists in many other cultures: instead of shirtsleeves, it’s clog or rice paddies.

It stands as a warning to families: you make it, your kids spend it, and your grandchildren lose it.

But recently, the research that purports to prove this has been debunked.

Advisors are adopting a more positive view of family wealth and what it can achieve both for families and society.

 

It’s time to go one step further and turn the curse into a blessing.

 

To do that, we first must understand this “curse”:

The third generation of wealth carries risks.

    –  They grew up with plenty, while their grandparents grew up with little.

    –  They may not understand the journey of wealth creation.

    –  They have a very different psychology of money to the wealth originators.

Because of this, they may lack resilience and may not have as good an understanding of risk and reward.

An opulent lifestyle and poor decision making can the road to ruin.

 

How can families flip this narrative?

By three generations working together to compound their respective strengths.

 

The pattern works like this:

• First generation takes a certain approach
• Second generation wants to do it differently – “their way”
• Third generation looks at both and finds a middle path

My late father was a micromanager. My response to that was to over-delegate. My children learn from both of us to strike the right balance.

 

What is the difference between “shirtsleeves …” and the compounding formula?

In the compounding formula, parents:

    > Allow their children the space to experiment and learn

    > Give their children autonomy and choice

    > Let their children individuate

    > Communicate openly

    > Convey the lessons of their experience in a non-judgmental way

    > Tell stories – warts and all – to convey their values

    > Remain humble, recognising they too can learn

    > Allow the third gen to learn from the two previous gens

    > Encourage a culture of stewardship (not ownership)

 

Of course, it takes two (in this case three) to tango. The rising generation need to maintain a healthy respect for the past, and reciprocate the good will shown to them.

The incumbent generation need to take the lead on this.

Done well, the third generation will understand the journey of wealth creation their grandparents took, learn from their parents who challenged the status quo, and together design a sustainable future for the family.

 

Every curse has a corresponding blessing.

While it can take three generations to lose it, three generations working together can build a foundation that is enduring.

 

Conversation Starters:

How do you deal with children who want to “do things their way”?

 

Further reading:

The ‘Shirtsleeves-To-Shirtsleeves’ Curse: How Family Wealth Can Survive It
Intergenerational wealth – the importance of key conversations
100 Families’ Secrets to Staying Wealthy for 100 Years
Next-gen billionaires are breaking away from their family businesses as they inherit wealth
Breaking The Third-Gen Curse: How Family Offices Are Evolving Today

 

David will be speaking at the Prestel & Partner Family Office Forum in Dubai on 18-19 Feb 2025.

His topic is bound to be provocative: Attention Rising Gen – It’s Not All About You! Why The Principal Should Never Retire. In his entertaining and contrarian style, David will challenge the current focus on the ‘rising generation’, and the idea of ‘retirement’.

This will foster a better understanding the journey of the incumbent principal (whether in operating business or family office) to today and beyond 15-20 years.

Prestel & Partner’s Family Office Forum is a two-day conference exclusively for leaders in Family Offices, Family Members, and a select few sectoral experts, to connect and converse, in complete privacy. It provides a forum to exchange experiences and know-how on best practice in government and investments.

 

When we think of wealth transfer, it’s commonly from parents to children.

But what about “horizontal” wealth transfers?

The “Great Wealth Transfer” is about the Baby Boomer generation retiring and passing their wealth to their children.

A “vertical” transfer goes down generational lines.

A “horizontal” transfer goes across generations.

These typically occur in divorce, or after death to the surviving spouse.

In most of these scenarios, the recipients are women – divorcees or widows.

They differ from vertical transfers in several ways:

• Divorce is often laden with conflict and other agendas, some of which can endure way after settlement
• Losing a spouse can be far more difficult than losing a parent – bereaved children usually return to their own families, while the bereaved spouse is left alone
• Wives are too often at a knowledge disadvantage in respect of family wealth
• They may need to build new relationships with advisors

Vertical transfers – done well – can be smooth and orderly.

The family can invest time and resources into planning.

There can be overlap as control passes from one generation to the next.

Horizontal transfers often feature a discontinuity.

Much of what used to be may not be relevant or helpful.

They may need a reset or a restart.

It took three acrimonious years for Jane’s* divorce to settle. She got the house, cash consideration for her share in the business, and a listed equities portfolio. The kids were 19 and 13, the younger one living with her.

She was emotionally spent. After settlement, she treated herself to a week at a health spa. But she couldn’t relax.

She had more money than she would ever need.

There was a trust established for the kids so they would also be looked after financially.

But a part of her was petrified as she had no idea what to do next.

Horizontal transfers can leave the recipient of wealth in a vulnerable position.

• What does the next stage of life look like?
• Who is looking out for them?
• Whom can they trust?

For Jane, it started with building a trusted team – a group who worked together with her (and each other) with a clear North Star: “what is best for Jane”. With that team, she articulated her goals and consciously designed the next stage of her life.

There was no urgency or time pressure.

With time, Jane found her groove and is living a life of her own creation. She sleeps well at night because she has the support infrastructure in place for herself and her children.

Dealing with a horizontal wealth transition has unique challenges and involves a lot more than the more common intergenerational wealth transition.

Things usually proceed at “the speed of trust” so building a trusted team to look after you is an essential first step.

Ensuring that your team understands the nuances and sensitivities of your situation is key to delivering a successful outcome.

* Name and some details have been changed

 

Conversation Starters:

To what extent can/should you prepare for family “discontinuities”?

If a horizontal wealth transfer is coming up, what will you need to stop, start and continue doing?

 

Further reading:

Neglected heirs: widows who take over the family finances

The downsides of the $4.9tn intergenerational wealth ‘tsunami’

Green on how Ellevest is changing the game for women and wealth

 

David has been recognised in Passion Vista magazine‘s Top Men Leaders of 2024.

The feature showcases his multifaceted career: from software developer to tech entrepreneur and now a globally recognized family enterprise advisor, author, and speaker. The article highlights David’s passion for creation, his innovative approach to business, and his dedication to helping ultra-high-net-worth families navigate complex intergenerational challenges.

Read the feature here.

 

At this time of year, aren’t you itching to know about family office trends for 2025?

Don’t waste your time. There aren’t any.

Morgan Housel explained this through the difference between cumulative and cyclical knowledge. In some fields, such as medicine, what we know builds on the knowledge of our predecessors. That way, the body of knowledge continues to accumulate and improve.

But in the realm of money and wealth, the same themes have been regurgitated for hundreds of years:

• Anxiety around maintaining wealth
• How not to let wealth spoil us and our children
• Economic bubbles and crashes

The classical Jewish work Ethics of the Fathers (written around 2000 years ago), put it very succinctly: “The more property, the more anxiety” (2:7).

These challenges are not new, and will never get old.

You will not read about a family office trend of age-appropriate rising gen education about living a good life with significant wealth.

Why?

Because unlike medicine or mathematics, our relationship with money and wealth is as much emotional as it is rational.

What drives us to create and sustain wealth goes to feelings about power, our place in society, and our relationships.

My favourite quote on this was from the mobster Tony Montana in the movie Scarface (1983): “In this country, you gotta make the money first. Then when you get the money, you get the power. Then when you get the power, then you get the women.”

No trends there.

Just eternal truths about the human condition.

Our attitudes to wealth are established in our formative years. They are a product of our upbringing and experiences. They remain with us for most of our lives, usually buried deep in the subconscious.

Appetite for risk, attraction to certain asset classes, approach to diversification, scarcity or abundance mindset.

They can usually be traced back to baked-in beliefs rather than anything scientific:

• “Property never goes down”
• “Shirtsleeves to shirtsleeves in three generations”
• “Debt is bad”
• “Debt is good”
• “Giving children money will spoil them”

So what to do instead of embracing the latest “family office trend”?

Firstly, skim those “trend” articles with a heaped tablespoon of salt.

Read a “trend” article from a few years ago and laugh at it.

Then, start this during the holiday season (preferably with your family):

• Articulate your own money beliefs and challenge them.
• Understand where they came from and why.
• Think about how your children’s (and your parent’s) beliefs may differ and why.
• Decide what you want to keep, and what you want to change.

Our greatest risk lies in the things we don’t know we don’t know.

The first step to changing anything is self-awareness.

Thriving families focus on communication, learning and growth, not trends.

That is the key to thriving across generations.

Conversation Starters:

What are the ‘money myths’ in your family?

What are the stories that gave rise to them?

How has behaviour been reinforcing them or challenging them?

What stories (money-related and otherwise) help the family thrive?

Further reading:

FIVE FAMILY BUSINESS TRENDS FOR 2019
Asian Family Office – Recent Trends and its Non-financial Role
Ten Trends That Will Impact Private Wealth And Family Offices In 2021
Three Pivotal Trends Impacting Growth
Family office executives reveal the 10 biggest trends shaping the industry

“The problem is not wolves at the door but termites in the floor.”

Author Os Guinness was talking about the future of America in his 2012 book, but the comment applies equally to families.

It’s obvious what to do when wolves are at your door; they pose a clear and present danger. You need to act with urgency to stave them off.

Termites in the floor, on the other hand, are barely noticeable. You can deal with them … tomorrow. So instead you push things off and do nothing … until the house collapses.

Termites are actually worse than that, because the floors and walls may be full of them but you may not see them … unless you look closely for the signs.

—————————–

Your family is like a house – it needs a strong foundation:

• Communication & trust
• Shared vision & purpose
• Good governance

From time to time, wolves will come to the door. They are crises that you need to deal with immediately. They are usually things external to the family – changes in market conditions or the economic environment, or competitive factors that affect operating business.

These external challenges often relate to financial capital. You can keep the wolves from the door by ensuring that you (as a family) are aligned on purpose, have well-articulated investment policy and governance, and are suitably diversified. While you can’t control or prevent those external factors, you can be ready to weather them when they happen.

A family flare-up that relates to non-financial capital, such as family dynamics, succession & the rising gen, might seem like another wolf at the door. But it’s not.

These things don’t come out of the blue; they often relate to longstanding and unresolved issues between family members. These are the termites in the floor.

Either you don’t notice them, you pretend they are not there, or you consider them important but not urgent. Dealing with them is much harder than things like investment policies. They relate to deeply held emotions. It’s much easier to put them on the back burner, find other priorities etc.

… until they explode and the house collapses.

This is the other important difference: wolves are external threats, but termites are internal. Most empires are destroyed from internal decay, and it’s the same with families. If an empire/family is internally strong, not only can it withstand wolves, but it is vigilant about staying termite free. If it is weak internally – poor communication, lack of trust, no shared vision, poor governance – then it’s just a matter of time before it will collapse.

How to be termite-free?

Build a strong foundation (see above)

Be on the lookout for termites

Don’t delay in dealing with them

Conversation Starters:

What issues are festering in your family?

What happens when they flare up?

Further reading:

Family firms need to have hard conversations, experts say
Use the festive period to prevent future conflict in your family business
Following Up the Family Meeting — Steps to Preserve Family Wealth
Opinion: Generation labels mean nothing. It’s time to retire them.
Why Family Disputes Are Rising In English Courts
Hoflander aims to help generations understand each other in new book
Succession Fireside Chat: How do business families deal with conflict? Part 1 – Key themes when helping business families