Top 5 Trends Set by Today’s Visionary Family Offices
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As family offices grow in number, holdings and sophistication, we're seeing leadership, investment goals, wealth management and succession strategies evolve. What are these visionary family offices doing differently to cement their success and their legacies?

The second article in this “Top 5 Trends” series looks at what leading family offices are doing differently to groom the next generation to govern and preserve their families' wealth and vision.


There is a massive wealth transfer about to occur, estimated by some to be as much as $67 trillion in the US alone. The family offices that put successful, sustainable succession plans in place demonstrate five common attributes and attitudes:

  1.  A capable and willing next generation
  2.  Older generations who are willing to give up [some] control
  3.  Across-the-board alignment with the family vision
  4.  Clear governance structures
  5.  A professional leadership team within the family office

Accepted wisdom is that it takes 10 years to arrange and implement a succession plan, which is why the most visionary family offices start to actively engage in succession planning early. We see this in the progressive firms that empower future generations with the impact and responsibility of their wealth.

Next-generation leaders have fundamentally different values, experiences and management styles. Their upbringing was significantly different from that of the Greatest Generation and the Boomers. They were raised during a parenting revolution, with different priorities, societal expectations and norms, globalization of the economy and the mass proliferation of technology.  The successful transfer of wealth and leadership entails a delicate balance.

On one hand, there is a deeply-felt need to protect and preserve family wealth, which in some families leads to paternalism. This manifests in a controlling, defensive, secretive and often skeptical culture. It’s most pronounced where the early generators of wealth are still at the helm and operating under the premise that later generations need protecting from themselves. Many families fear the "shirtsleeves to shirtsleeves in three generations" effect and have heard the often cited statistic that 70% of families lose their wealth by the third generation.

On the other hand, next-gen leaders are anxious to have the opportunity to lead and try new things without being second-guessed or overruled. They're ready to stretch and be tested. They too feel the wealth-transfer looming and have their own clear ideas about the best ways to protect, preserve and grow family wealth. Generation X and Millennial managers see the path to future growth based on their life experiences. They want to tap into new markets, employ different technologies and retain more progressive advisors. As a group, they prefer flat management structures, more transparency and open communication. They are disrupters, happy to change what's not working and adopt unconventional solutions. Their plans may feel at odds with founding family office leaders who are happy with the status quo.


In the most successful succession scenarios, we see:

  • Current leaders take the time to educate the next generation on what it means to have wealth and how to manage it effectively.  They understand the benefit of developing in-house expertise for roles and activities deemed most important, while creating a structure that allows next-gen leaders to gain experience early and successfully outsource less critical, peripheral activities.


  • Established systems for communicating in an open and transparent way. The recent increase in the creation of private trust companies is a result of this need to structure, govern and perpetuate the business of family wealth.


  • Future generations empowered now to use wealth to fulfill their own desires for meaning and purpose. Many in the rising generations have a strong desire to make an impact.  Some are finding this impact in social arenas such as philanthropy. Some are looking to environmental, social and governance (ESG) investing as a way to use financial investments to effect change. Others are applying their entrepreneurial spirit to meaningful roles within operating companies.

The transfer has already started. According to The UBS / Campden Wealth Global Family Office Report 2018, 29% of respondents representing family offices around the world reported that the next generation already hold management or executive positions in the family office, while 23% reported that they sit on the board. The same report states that 43% of family offices now have a succession plan in place, and that family governance and succession planning became the largest of all family professional services costs.


While the top family offices have the talent and scale that affords them the time to plan and communicate, smaller family offices struggle with both: there's a dearth of expertise, understanding and bandwidth to deal with the complex strategies of governance and succession.

In 2016, family offices ranked succession planning as their number one governance priority, but the UBS / Campden Report shows this same group has been slow to put plans in place. Family offices must establish clear succession plans to safeguard the transfer of wealth, preservation of values and continue progressing towards fulfilling the family's vision.


Seeking outside expertise in succession planning and governance can help bridge generation gaps, manage the nuances of family politics, and formalize the family's vision, creating a family office that functions smoothly and optimally throughout the years of succession, and onward. The next generation of leaders is ready, whether the succession plans are in place or not.


What does it take to secure the right leadership? TREND #3 reveals what some of the world's leading family offices are doing to fill their talent gaps. SIGN UP HERE to get the full series THE FAMILY OFFICE: BEYOND 2020, Top 5 Trends Set by Today’s Visionary Family Offices delivered straight to your inbox.


Jane Hamrle, a former CFO of multi-generational family businesses, started and ran a family office and managed returns across a portfolio of direct investments. Throughout her career, Jane has bought, sold and integrated more than 15 companies. With two decades of experience in strategy, operations, M&A and finance, she has a proven track record of creating exceptional shareholder value, driving performance of operating companies and delivering high-level expertise in the direct investing arena. As President of Private Company Consultants LLC, Jane works with family office clients as a consultant and advisor. 


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