Supporting The Next Generation

Video transcript

Supporting the next generation successful family offices engage future generations in meaningful ways sometimes this means preparing them to take over the family business sometimes this means equipping them with the education and opportunities to chart their own path and sometimes this means integrating them into the family office itself through active participation in family governance philanthropy and other important projects for the family while there are myriad ways to engage and develop future generations many family offices struggle to successfully integrate obvious strategies and tactics into their own operations pre-existing family dynamics can make it difficult to successfully engage future generations furthermore the life experience of future generations is often far different from the founders experience and this can create additional challenges in nurturing relationships across generations from a psychology of wealth perspective there are two defining experiences that shape one's view toward wealth first there is the experience of acquisition acquirers of wealth built their business took risks and probably had some lucky breaks along the way second there is the experience of inheritance inheritors are asked to steward wealth though they themselves may not have had an actively acquired or built the wealth themselves from a cultural perspective people in the united states often mythologize the acquisition of wealth and disparage the inheritance of wealth stories like horatio alger and the expression pulling yourself up from your bootstraps speak to a belief that one ought to work hard and earn everything yourself on the other hand those that inherit large amounts of wealth are sometimes called trust fund babies trustafarians or other disparaging terms while these cultural perceptions are pervasive the truth is complex and cannot simply be reduced to pithy platitudes of course no one chooses to inherit wealth and no one acquires wealth without some degree of luck or other advantages moralizing these positions doesn't address the very real fact that these are very different experiences and they each require a family office to approach situations of wealth psychology in dynamic ways that put empathy and understanding first and foremost acquirers of wealth are defined through the experience of transition from humble beginnings acquired wealth must grapple with the experience of transition and change often their identity was formed during those early experiences of struggle and some founders have found a hard time seeding control of the family office because of how deeply their experience is built into their self-perception inheritors of wealth are defined through the experience of maintenance and preservation family offices are often tasked with protecting and nurturing family wealth over many generations and the children that are born into this environment inherit these ideas of preservation maintenance and conservation attention often emerges between the desire to maintain what has come before and the pressure to build something new there are many ways that a family office can support the next generation but such support must always begin with a clear understanding of the internal family dynamics needs and vision for the family office some practical ways that family offices can support the next generation is through organizing and maintaining integrated family meetings designing a wealth education platform that emphasizes and supports practical learning experiences and creating clear policies and procedures around how the next generation can access and utilize family financial resources akin to a family bank as with many aspects of building a successful organization trust and communication are essential if the family office is to endure and the next generation is to flourish to learn more visit our website at tfoa.info thank you