David’s Familosophy newsletter
Abraham Lincoln famously said: “Don’t swap horses in the middle of the stream”. Is a global pandemic the best time to change leaders? Or is it better to avoid dramatic changes during uncertain times? While we’d like to be well prepared, and knowing that succession planning is a process rather than an event, families may find themselves needing to accelerate the process at these times. Unplanned transitions don’t have to inevitably end in disaster, but when they…
As we end the third year of this pandemic, it’s worth reflecting on the theme of resilience. By retaining their long-term view, family businesses have been able to not just weather the storm but also grow and thrive. Their resilience comes from other factors as well: the entrepreneurial spirit of innovating in times of crisis, and the emotional and social bonds that exist both within the family and within the wider family business group and…
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…
Financial advisors are an ‘old’ bunch – with an average age in their mid-50s and a big bulge of advisors now in their 60s and 70s. If that didn’t already pose a risk to their clients, the COVID-induced recession means that many of them will leave sooner than expected – either by choice or otherwise – and may choose to retire completely in the current economic environment. Merrill Lynch, perhaps in response to both issues,…
During a crisis, having a family business can be a double-edged sword. On one hand, there are often family elders with experience in overcoming previous recessions, support from the family unit, and the fact that family businesses tend to be more risk averse and therefore in a better position to weather the storm. But some of those very attributes can also manifest as weaknesses. For example, family businesses have a concern for a wide range…
Most families have them, and all families need them. The trusted non-family members who have worked within the family enterprise for many years. In addition to their formal roles, they might be confidantes for family members, and informal mediators and channels for tricky conversations. They know everything important that is happening within the family. They can also serve as a bridge between the family and rank-and-file employees within the family enterprise. They are not blood…
Research indicates that more than 70% of heirs will fire or change wealth advisors after they inherit. Clearly this poses a huge risk to advisors, but it says a lot about how advisors are currently dealing with family groups. It’s also worth considering the risks of this situation to families themselves. A significant proportion of wealth advisors to family groups do not appear to be engaging with the rising generation, and certainly not taking the…
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….
For years, we’ve been writing and talking about this trillion dollar wealth transition that is “going to happen in the next ten years”, ostensibly as baby boomers retire. But has it happened? The fact that we’re still talking about it as “happening” says plenty. We need to ask: why were the predictions of so many people incorrect? and more importantly, what (if anything) should we be doing differently about it? I’ve written previously about the…
One of the great challenges of family wealth is raising children. And one of the best articles I’ve read on the topic (and I read a lot of articles) is the first link below, and I urge anyone for whom this is an issue to read it in full. It’s very important to be aware of the unintended consequences of our beliefs about wealth and the messaging we convey to our children about them. How…
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