Familosophy - August 2020
Welcome to the 'Familosophy' newsletter. Every month you'll discover deep insights, thought-provoking discussion points, and commentary on family, business, and what really matters to us.
Family Office Considerations
A family office is usually structured around the individual needs and preferences of the family involved, and an increase in private wealth is fostering the creation of more and more single family offices (SFOs).
The space is shifting rapidly, and with it comes the changing face of the family office and new definitions of what this means. One pervasive mistake is not developing a deep understanding of the goals, objectives and agendas of the wealthy family. Some multi family offices (MFOs) and even SFOs are using a cookie-cutter approach, which works against the whole idea of a family office.
Rather, family office purpose, mission and vision statements should be crafted according to the family's service needs. These can act as the foundation for strategic decision making, and link to measurable results.
Virtual FOs are rapidly proving to be a superior alternative to traditional MFOs as they offer a greater level of flexibility. In addition, private MFOs are forming, which enable groups of families to pool their resources and leverage co-investment opportunities.
Consider This: Have you considered whether/how a family office could be beneficial to your family? If you already have one, how do you review its performance and whether it is meeting the needs of the family? How often do you review the arrangement, with consideration of how the family's needs evolve over time?
Original articles: https://www.forbes.com/sites/francoisbotha/2020/01/28/could-now-be-the-right-time-for-the-virtual-family-office-how-banks-can-support/#7ee89aa65438, https://www.fa-mag.com/news/family-office-2020-going-strong-53779.html, https://www.forbes.com/sites/francoisbotha/2020/02/12/emerging-forms-of-the-family-office/#1b28b6ba2fc4, https://www.spearswms.com/rise-of-the-virtual-family-office/, https://www.fa-mag.com/news/russ-prince--a-critical-mistake-to-avoid-when-setting-up-a-single-family-office-54630.html, https://www.bmmagazine.co.uk/business/bobby-gill-on-family-offices-how-to-protect-wealth-for-successive-generations/, https://www.forbes.com/sites/francoisbotha/2020/03/09/considering-a-family-office-how-to-choose-a-fitting-form/#4ca91a5215a5, https://www.forbes.com/sites/francoisbotha/2020/07/03/6-best-practices-for-single-family-offices/#65d94e26336f
#familyoffice #familyofficepurpose #missionandvision
Preparing the Rising Gen
How can families best prepare the rising generation for inheritance and/or joining the family business?
Parents may reasonably worry about raising spoiled or entitled offspring, and may feel uncomfortable discussing topics like wills and trusts before their kids are mature enough to grasp such concepts. However, a failure to prepare children for the responsibilities that come with being a custodian of significant wealth is not in the best interest of the child or the assets.
In addition to an estate plan, parents ought to provide children with a sound financial education, and develop the ability to communicate honestly and openly about family wealth.
Where there is an operating business, it’s important to embrace best practice in talent management, and identify/develop prospective leaders. Genetic factors play a role, but the majority of leaders are made not born. Personality development of the rising gen is an important factor – helping them individuate, and make an active choice to join the family business, rather than doing so from a sense of obligation. Finally, it’s worth noting that women-led family businesses have increased by 58% since 2007, so sons and daughters should be a part of the same conversations and be an active part of all discussions around the family business.
Consider This: Have you thought about how to prepare children for the wealth that will ultimately come their way? Do you have ways to talk about family wealth and family business? To what extent have you considered what the children want when it comes to these issues?
Original articles: https://www.forbes.com/sites/adamstrauss/2020/07/01/4-ways-to-prepare-children-now-to-oversee-their-inheritance-later/#28e7df7d193c, https://www.forbes.com/sites/francoisbotha/2020/06/23/3-simple-steps-to-develop-successful-family-business-leaders/#3cb8124474e7, https://www.thisismoney.co.uk/money/pensions/article-5263603/More-half-50s-prefer-spend-not-leave-money.html, https://hbr.org/2020/05/why-the-second-generation-can-make-or-break-your-family-business, https://www.forbes.com/sites/forbesbusinesscouncil/2020/03/04/start-preparing-daughters-now-to-take-over-the-family-business/#690970b91241, https://www.bizjournals.com/denver/news/2020/02/03/tips-on-talking-to-the-next-generation-about-your.html?s=print
#familyoffice #inheritorpreparedness #successionplan #leadershipprospect #personalitydevelopment