Successful family office wealth management doesn’t depend on being the greatest investor. Optimizing for risk and return matters, but financial goals can often be achieved with plain-
vanilla, liquid portfolios. The greater challenge for wealthy investors is succession. When families fail to prepare the next generation to take responsibility, no amount of hot stock tips will save them.
Before You Talk About Investments, Ask These Questions
Before worrying about what to buy or sell, wealthy families should focus on a few key questions
first:
- What is the purpose of wealth?
- Can heirs read a balance sheet or investment report and make reasonable judgments?
- Has decision-making been defined and practiced according to plan?
- Does everyone know what the succession plan is, and is it being implemented?
- Does the family live within its means?
In my experience administering over $1 billion in assets at our family office, I’ve learned that only about 10 percent of wealthy families in Canada have adequately prepared the next
generation to lead. There is room for improvement.
What Bad Succession Planning Looks Like
One couple I’ve worked with—a husband and wife, both retired executives—illustrate what can go wrong. They’re entrepreneurial and accomplished, but also controlling and reluctant to share information with their kids. Their identity and sense of control are tied to their money. They’ve made a few poor financial decisions over the years and now avoid involving their children for fear of embarrassment or loss of authority.
Because of this, their children—now in their forties—are unprepared to assume responsibility when the time comes. As the parents age into their seventies, communication has only become more difficult. The risk is that they’ll reach their eighties still clinging to control, leaving their heirs to inherit not only wealth, but confusion and risk.
What Good Succession Planning Looks Like
By contrast, another client family offers a model for success. The father, a disciplined wealth creator, managed the family finances himself for decades. But as he aged into his seventies, he made the deliberate decision to involve his family. He invited one son to attend meetings with their investment advisors and family office.
Together, we digitized their bookkeeping and investment reporting systems—transforming a lifetime of paper records into a transparent, accessible, cloud-based process. Over several years, the son learned his father’s investment principles, reviewed quarterly reports, and gradually participated in decisions. Eventually, decision-making authority shifted naturally, with the father remaining a mentor rather than a gatekeeper.
Today, the father is in his eighties, the family holds annual family meetings that I chair, and each member understands the structure, strategy, and values behind their wealth. There are open dialogues and friendly debate about wealth management. Not confrontation and tension. Their process is documented, communication is open, and continuity is assured.
Tools to Build Continuity
Families who aspire to this level of preparedness should consider:
- Holding family meetings (chaired by a personal CFO or neutral facilitator).
- Maintaining good reporting and communication, such as quarterly reports.
- Defining shared values (one to three principles that guide decisions).
- Codifying a wealth management process (through an Investment Policy or family charter).
- Nurturing professional advisors, ensuring continuity and accountability.
The Real Measure of Success
True success in family office management isn’t about beating the market—it’s about building a process that endures beyond one generation.
