When it comes to family why try to measure the immeasurable?

We are all obsessed with metrics. We can calculate and control that which we can measure. And in the spirit of empiricism, we encounter a profound irony-family offices tend to take care of money, not family. The reason is simple. Money can be dealt with in absolute empirical terms – it is quantitative and exact. So, if you don’t want the tail to be wagging the dog, you will need to be sure qualitative factors have been addressed long before the assets are pigeonholed into alpha-bearing channels. Don’t be fooled, the fate of finances is intimately connected to the fate of family. Not handled properly, capital assets will not only lose their value to the individual members of the family, they will potentially divide the family and generate animosity in places where appreciation and respect would generate stability and growth.Measure, yes. But what?

• ln the lifecycle of a successful family business comes the point when Family Leadership faces issues that are getting more and more complex. The business becomes so big and successful that the family needs some centralized place to structure and manage the businesses as well as the financial windfall of the success.

• Handling the leadership transition into the next generation becomes complex and difficult to manage and some structure is needed.
  The family turns to their bankers, CPAs and solicitors and asks them for advice about what they should do. Most of these advisors will suggest setting up a family office. Obviously, the advisors shape the family office according to the well-known model. If it works for business family A it must also work for business family B.
  Within a year the Financial Family Office is set up, staffed with wealth managers and CPA’s and a back office. The assets are managed, the reporting is organized, the taxes filed on time and the business leaders have professional support for all the issues of the business and peripheral to it.
  Banker has made sure that you have the best-practice Asset Management, your CPA makes sure the reporting and tax filing is in order and your solicitor has made sure that the legal and structural risk for the business is being avoided. Each professional has brought the best thinking, but from his professional viewpoint only.
  Does this financial family office also answer other issues such as heirs’ succession, the complexity of the growing family, the multi-generational issues, legacy, family social and communal branding? And the owner, does he have a plan for the generations to come? Is he ready for the next black swan event in the family (accidents, death, regulatory changes, etc.)?

The Family Office needs to deal with the business of the family, not with the family business.

Many of the issues that your family will face have nothing to do with the business and are often not being addressed by the family office. Why? AII the specialists have contributed their professional knowledge, but no one has taken a few steps backwards to see the whole picture and see what your family actually needs. Unfortunately, you will face new complicated and existential issues in the family, and not in the business, for which the financial family office will not have any answer. When the family office is built with the business in mind, it is just another structure on top of the business, a kind of Holding Company. lf the family office is built with the family in mind, it is dealing with the issues of the family and how they will own, run, and identify with the business.

So how do you build a family office? First you need to understand that the family office must be tailor-made for your family. By asking yourself some key questions you will find out what kind of family office your family needs.