Developing a Family Wealth Strategy with a Multi-generational Perspective

Family Office Exchange CEO Sara Hamilton joined representatives of two successful multi-generational families to help illustrate best practices for taking a long-term view of family opportunities and challenges during this 2012 FOX Fall Forum session.

Peter O’Neill, director of Rockefeller Financial and former chair of the Rockefeller Family Council, explained how the Rockefeller family supports the diverse interests of their five living generations.

Neil McKay, chief executive for the family office that serves the fifth through seventh generations of New Zealand’s Todd family, shared his recent experiences with the family’s intergenerational transition.

Some highlights:

• If the family discussion of family enterprise begins with investments, you’ll likely get a very short term view. If you begin with the family, you will get a more long-term view.
• It is much easier for families to visualize a 100-year strategic plan by drawing on case examples of families who have actually done it.
• Families are advised to focus on three broad areas: business, philanthropy and multi-generational wealth. A comprehensive risk management framework – and fostering awareness among family members – is critical to understanding how risk factors can impact the realization of family goals. 
• Liquidity needs can be better understood by drawing up a long-term liquidity plan, and mapping investment strategy against liquidity needs
• Younger generation family members, who are inclined be more self-directed in their investments, would benefit from better understanding the universe of socially-responsible and impact investing

• In order to have the best talent, you want to have a growing business.
• There are more clients than Rockefellers now in the enterprise.
• Biggest challenge: How do they get to know each other?
• Breaking into smaller working groups and areas of interest helps to create connections. It is hard to reach consensus at the broader family forums.
• Don’t have a Rockefeller mission statement, but interest groups do have them.
• Have a family whiteboard called E-Rock that serves as a place to get answers to questions. 
• Still a family. Not a business. Love, support and connection was No. 1 shared value at Family Forum

• Separated family office from operating business
• Each generation larger than last
• Created a family council
• The family council should not act as a second board for the operating business. 
• Operates a full-service singe family office similar to a MFO
• The Todd Family enterprise consists of the family, FO, foundation  and operating business
• Wanted to make sure everyone was aware and engaged in the stewardship of their wealth
• Needed a vision for the overall enterprise and undertook a family satisfaction survey that measured satisfaction, investment performance, and return on investment
• Did scenario planning and planned for the business environment deteriorating. They prioritized maintaining full service without losing quality, with joining an MFO to tap pooled resources and share operating costs as one possible scenario.