Finding The Flow In A Family Office

Finding The Flow In A Family Office
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It feels all too familiar.

The family office says...

The family mission is...

It would be the perfect family office were it not for (insert family member name) who always...

It makes me wonder, have we lost focus on what the family office should be? Is it to serve and support each family member, or is it to grow and thrive and support its employees and advisors? In other words, who is the client: the family office or the family members?

My guess is the orientation begins with the wealth creator, the person who most likely started a successful company that had some sort of magnificent liquidity event. That person - and for the sake of simplicity rather than political correctness, let's refer to that person as a male individual - undoubtedly had clarity of direction and mission in his business, and that explicitness made the buildup and liquidity event possible. Furthermore, by having a clearly defined mission, he could hone his hiring to bring in employees who were aligned with his purpose and mission. If a prospect wasn't aligned, s/he merely continued his or her job search until s/he found a company that was a fit.

So the wealth creator, who started a financially successful business, experienced positive results because he hired employees who complemented his skills while being aligned with his mission. It's a self-selection process that worked for him. Naturally, then, when he starts his family office, he hopes to bring the same skills that made his business and financial success possible; define your mission and live by it.

But here's the difference: employees of a company are self-selective, while family members of a family are random. Think about it: you could probably picture in your mind what an IBM employee looks like and what a Google employee looks like. That's because they likely fit into the culture of their employer. Now, however, picture what your family looks like. It's likely there is no consistent theme that describes your family and, if there is, it's a result of natural selection rather than self-selection.

In other words, when family members are mission aligned, it's a statistical accident. I guess that is why the "shirtsleeves to shirtsleeves in three generations" proverb is the norm. A well-defined, expensive, advisor-assisted mission statement that is widely communicated by family-office founders and executive directors is likely to be as meaningful to some family members as it is likely to be meaningless to others.

So how do you get around this? How can a family office have a mission that supports the family members?

I believe that is only possible if the family's mission is to serve the family members. That means treating each individual family member as a client in and of himself or herself. That means getting to know each and every family member on a personal level. That means giving him/her a wealth coaching team who is committed to his/her financial well-being instead of merely the family office's success. That means making wealth coaches (usually CFP's®) available to work with each family member within the family system.

This is not the least expensive route for a family office. If the overriding mission of the family office is to minimize expenses, then this is not a solution. But if the mission of the family office is to support each individual family member, to build a community, and to celebrate the diversity among family members, this is the only way I know to accomplish that mission.

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