The Big Picture of Family Office Wealth – As Single Family Offices, we typical have grown our wealth through operating businesses with focus and intensity, but there is the transition that many families fail to place as much attention towards or should we say, not the proper attention – managing their capital.

This is a great topic for families and wealth advisors alike. Sadly, both sometimes fail miserably on this topic for different purposes.

The priority is always preservation of wealth – especially in responsibility for the next generation ahead within the family.  And at the same time, the role of a private family is important to society as well.  The Ultra-High Net Worth Families carry the United States in terms of providing the resources that we all take for granted in society.  The less Ultra-High Families we have, the more strain it places on society as a whole.  As a Family Office, we all want to maximize our own wealth and take care of our families moving forward, but we also understand there is a higher calling as well.

This is where we as Family Offices and those advisers who serve the industry lack alignment all too often.

I am contacted by service providers all the time. There are some very good ones who really care and have a true one-percent differentiation factor. But most have their own self-interests, trying to sell you every product under the sun. Some of these products are very strong, but that does not mean they fit our objective as a family or yours as well.

Here is my simple advice for both parties.

Advisors and Service Providers:

Let’s remember, it is about the family first, not you. Get to know the history of the family, its background, and its objectives today. What are the objectives of the family moving forward? Always illustrate a simple risk and returns scorecard for the family to make sure they have a fundamental understanding of this balance at their current spending levels and investment performance.

For Family Offices:

The most important philosophy is take control of your capital.  Although you have advisors, always remain in control of the direction of your capital. And always make decisions that are in line with your philosophy. In many ways, growth and preservation of wealth often work together, but how your capital is allocated and how aggressive you want to be as a family is where you must remain in control.  Do not allow yourself to be sold by service providers.  Be engaged and be knowledgeable.  With all the inner circles on how families communication with one another today, attend wealth conferences, meet other families, and engage with other families with how they manage their capital. Identify like-minded families who generated their wealth in areas that you are interested in and see how you can work together.

Overall, advisers and families can work together to establish a true alignment of interest as we look ahead to the next generation.  Let’s choose wisely and with education.

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