Video: Family Offices - Succession, Rising Gen, Education and Governance (Vocabulary Flashcards)

Priorities and Trends in Family Offices

Top priorities identified by a poll of about 50 family office leaders: succession, engaging the rising gen, governance, and related topics.
Stakeholder mix in governance matters includes family ops, employees, advisers; broad-based engagement is common.
Change triggers: leadership departures often trigger technology and governance reassessment; the trickle-down effect is real.
Growth of the ecosystem: global family offices grew from 1{,}300 (2019) to 4{,}600 (2024); of these, about 2{,}800 are exclusively single family offices.
Wealth concentration: North America holds about 33\% of global wealth.
Written succession plans: approximately 28.5\% of participants report having a written plan; indicates a large minority without formal plans.
Rising gen transparency: rising gen respondents desire transparency to understand goals and decisions, helping enable execution.

Consequences of lacking a plan: role confusion (board member vs client vs management), education gaps, and emotional hurdles.
Lead time matters: planning and education should occur well before transitions to avoid disruption and infighting.
Distribution of planning responsibilities: planning alone is not enough; must be discussed with family to prevent conflict and potential court disputes.
Best practices for succession planning:
- Develop a written plan and actively discuss it with family.
- Establish clear roles and governance structures (e.g., G1 founder, G2 successor, etc.).
- Build in lead time and phased transitions, including possible external leadership when needed.
- Consider a “death audit” or scenario planning to anticipate reactions and plan contingently.
Risks of misalignment: elaborate plans not shared or discussed can still fail if family members do not understand or buy into them.
Practical emphasis: communication, transparency, and education are central to durable transitions.

Primary avenues for rising gen (ages 25–40) engagement: attending family meetings, participating in family business/governance, involvement in family philanthropy, and formal training.
Experiential entry points: hands-on roles (internships, board exposure, leadership activities) are more effective than classroom-style training.
Engagement dynamics across generations: g2, g3, g4 require different engagement strategies; intergenerational off-sites and family meetings help maintain connectivity and loyalty.
Philanthropy as a low-risk entry point: implementing grantmaking or foundation responsibilities fosters financial literacy and governance exposure without first-hand ownership of wealth.
Internal risk of fragmentation: without meaningful involvement, a single family office can fracture into separate segments; early and ongoing engagement reduces this risk.
Creative engagement examples:
- Children selecting philanthropic targets and doing due diligence.
- Family partnerships where siblings jointly manage investments and perform due diligence.
- Off-site family meetings that involve all generations to build cohesion.
Practical takeaway: experiential, age-appropriate activities that build understanding and collaboration tend to succeed best.

Rising gen wants practical, applicable training (board leadership, governance, budgeting, understanding distributions, tax basics).
Gaps identified:
- Trustee/beneficiary training resources are sparse.
- Many families rely on informal education, with limited formal curricula.
Effective starting points for education:
- Cybersecurity and digital conduct (safe entry points to discuss governance).
- Philanthropy governance and fundamentals (foundation rules, due diligence).
Learning approaches:
- Hands-on, real-world projects outperform classroom lectures.
- Avoid jargon; tailor content to be age-appropriate and relevant to daily life.
Illustrative examples:
- Explaining cash flow: showing how a large tax refund affects future liquidity and distributions.
- Real-world scenarios like prenups and wealth disclosure implications to illustrate planning consequences.
Observations on timing: earlier and ongoing education is more effective; avoid late, last-minute training.

Start conversations early and maintain ongoing dialogue; do not rely on a single written document alone.
Use transparency judiciously: share enough to enable informed decisions without overwhelming younger generations with details.
Focus on practical, experiential learning: internships, board exposure, philanthropy projects, and governance participation.
Begin with accessible topics for beginners (cybersecurity, philanthropy) to build momentum and trust.
Develop a recurring education plan (formal or informal) tailored to each generation’s needs; consider family off-sites to strengthen bonds.
For families new to education efforts, emphasize philanthropy and non-personal topics as safe initial entry points.
Key behavior: communicate without jargon and ensure psychological safety so rising gen feels welcome to ask questions.
The overarching objective is to enable durable, harmonious transitions and maintain family cohesion across generations.

Global family offices: 1{,}300 (2019) to 4{,}600 (2024)
Single family offices among global total: 2{,}800
North America share of global wealth: 33\%
Written succession plans among webinar participants: 28.5\%
Rising gen engagement emphasis: primarily through meetings, governance, and philanthropy; experiential learning preferred