David’s Articles

David has been writing and publishing since 2006.  

This post was written and published prior to September 2023 when David and his prior firm, Family Capital Strategy, merged with Greycourt.  Views expressed reflected David’s personal views at the time and do not necessarily reflect the views of Greycourt.  Posts and information may be out of date and should not be relied upon for investment advice.

Family Governance Must Focus on Whole Family – Not Just the Client

Feb 1, 2023 | Family Wealth

photo of crowd of people in the market
Photo by NICE GUYS on Pexels.com

Things that appear positive at first glance, but are ultimately negative, are especially pernicious. And no industry is immune, the world of family wealth included.

The positive is that many of the ideas and techniques that began in the “cottage industry” of helping family business transition their ownership a generation ago are being rapidly adopted more broadly. Concepts such as family governance, legacy planning, core values, family education, etc. have been adapted by an emerging family office industry.

The negative is that far too often these tools are being utilized entirely for what they can do for the firm, not the client. No one generally confuses the capitalist for an altruist. While it is always difficult to separate self-interest from truly desiring to help. My concern here is that there will be a loss of others centeredness in the work, which jeopardizes its success, and potentially could lead to harm.

These aforementioned tools have the potential to address a glaring issue in financial services – namely the loss of assets as they transition from generation to generation. The industry’s track record is awful in its ability to retain assets when they move from mom/dad onward. In fact, it is awful in keeping women as clients after the husband passes.

So the industry has latched on to these concepts as possible solutions to a retention management issue. The danger is when an idea with a degree of intellectual purity becomes ‘productized’ so it can be delivered at scale across a large client base. There is a reason why people hate the music of Nickelback – it lacks the earnestness and authenticity that exists at the soul of genuine rock and roll.

So called ‘legacy services’ are far too often sold entirely to first generation wealth creators – as a cognitive salve to assuage the mortality concerns that naturally begin to arise in late middle age. While such services may speak to the concerns of this patriarch / matriarchal generation, this work is far too often are being completed in a vacuum.

Vacuum, in the sense of outer-space, is space entirely devoid of matter. The “matter” of concern here is the future generations of the family. Family governance formed by fiat is not actually governance. Same is true for education. Education done for the purpose of ensuring the future generations reach the same point of view as prior generations is not education – it’s brainwashing.

The work of a family staying engaged across generations is really, really hard. There are no panaceas in this work. It requires extra-ordinary intentionality – and must be engaged with by the whole family. Firms the choose to go down this path to offer such services would do well to emulate the spirit of their professional colleagues, aka the physicians. While the doctor is well compensated for his work, for a large portion, the desire is to serve and bring health – hence the Hippocratic oath

They say you should praise specifically and criticize generally – that is the spirit in which this piece is being offered. If there is one thing Gen-Z and Millennials have is a keen ability to sniff out anything that smells like inauthenticity. The industry and its practitioners would do well to periodically check their motivations as they add services – their clients certainly are.


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Nashville, TN