Super Rich families, with a net worth of at least $500 million, face the risk of family conflicts and the erosion of their wealth. However, many wealthy families are taking proactive steps to prevent such issues by organizing focused family meetings. This approach, once popular among the Super Rich, is now increasingly adopted by families with lesser wealth to ensure healthy family relationships and effective management of assets.
Fostering family cohesion
Healthy and productive family relationships are often necessary if your goal is to keep a family business strong or maintain a family’s wealth across geographies and generations.
Family meetings serve as a means to promote family cohesion and enhance the management of the family’s future across generations. Ultra-wealthy families engaged in business together often use family meetings to maintain ownership of the family enterprise and ensure its continued success over time. Additionally, non-entrepreneurial families with substantial investable assets find value in family meetings for educating heirs on effective wealth management strategies.
The family meeting principally provides a venue for multiple generations to discuss business, financial and relevant personal matters. Common topics covered at family meetings involving affluent members include:
- Updates to the succession plans within the family business (or single-family office)
- The concerns of family members that can impact family enterprises
- How business acumen and financial literacy will be developed in future generations
- Family philanthropic activities and how they are financially supported
- New business ventures and how to fund them
Family meetings are crucial for aligning family values, refining governance structures, commemorating milestones, and preparing the next generation for leadership roles. They foster trust, support, and the strengthening of the family’s value system.
Cohesion versus unity
It is important to note that family cohesion is not the same as family unity and harmony. Just about all families have a degree of discord. What family meetings can help accomplish is getting your family members on the same page and in agreement about what they can achieve by cooperating. It is about coming together for a common purpose—business, personal or both.
Characteristics of family meetings
Family meetings can vary in length and participation depending on the topics discussed and the number of individuals involved. The importance of the decision and the need for consensus among family members often determine the duration of the meeting. Effective communication is vital for promoting coordination and cooperation within families, and well-structured family meetings provide a forum to address issues and develop solutions. It is advisable to hold family meetings regularly, with ultra-wealthy families typically convening annually or semiannually. Leveraging technology such as videoconferencing and virtual reality meeting rooms can facilitate interactive experiences when logistical challenges arise.
A process for running effective meetings
It can be useful to think about family meetings as a four-step process, as opposed to a discrete event. The four steps are (1) planning the meeting, (2) conducting the meeting, (3) determining follow-up actions and (4) assessing outcomes.
Step 1: Planning the family meeting
When planning a family meeting, it is important to start by clearly specifying the goals, ensuring they are specific and refined. Flexibility should also be maintained to adapt to changing objectives based on meeting discussions. A well-defined agenda, communicated to all participants, should outline the topics to be discussed and the decisions to be made. Depending on the nature of the agenda items, supporting materials such the financials of the family business or the performance of the family’s investment portfolio.
Get input from all family members. Everyone’s opinions are valuable, and by taking them into account, you are more likely to achieve desired results that everyone can buy into. Consider involving professionals who can gather perspectives and help plan and facilitate the family meeting.
Pro tip: Add some fun and other ways to blow off steam. Many ultra-wealthy families also include downtime activities—such as golfing, family softball games or wine tastings.
Step 2: Conducting the family meeting
The focus of the family meeting once it starts should be squarely on the goals and agenda of you and your family. Therefore, it is usually wise to push day-to-day distractions aside—for example, by holding your family meeting off-site at a resort.
As noted, families may hire an outside professional—a neutral third party—to act as a facilitator or an expert resource. The backgrounds of these professionals are diverse, but often the professionals selected include:
- Single-family office senior executives
- Private client lawyers
- High-net-worth accountants
- Wealth managers
- Family business consultants
- Life coaches
Step 3: Determining follow-up actions
The family meeting itself should lead to specific follow-up action steps and plans. These actions may need to be turned into projects with milestones and deadlines, and designations about who is accountable for what tasks. It is also worthwhile to specify how the subsequent actions will be tracked and benchmarked.
Step 4: Assessing outcomes
After setting goals and taking action to achieve them, the final step is evaluating the degree of success within the desired time frame. While external professionals can assist in collecting evaluation data, you and your family should collectively determine the extent to which the stated goals have been accomplished. Based on this assessment, new actions can be identified to further progress towards the goals, whether through refining current strategies or adopting alternative approaches. The achieved results should inform the goals and agenda for future family meetings.
Commonly, different members will take the lead in planning different family meetings from year to year. Sharing control in this way can help to further build strong bridges between family members.
Conclusion
Family meetings, when conducted effectively, can bring significant value to your life, your family members, and shared interests such as businesses or investments. They promote alignment, understanding of perspectives, and proactive resolution of disagreements. Family meetings are not exclusive to wealthy individuals and can benefit anyone seeking to foster family cohesion and address challenges and opportunities for greater success.
ACKNOWLEDGMENT: This article was published by the VFO Inner Circle, a global financial concierge group working with affluent individuals and families and is distributed with its permission. Copyright 2022 by AES Nation, LLC.
This report is intended to be used for educational purposes only and does not constitute a solicitation to purchase any security or advisory services. Past performance is no guarantee of future results. An investment in any security involves significant risks and any investment may lose value. Refer to all risk disclosures related to each security product carefully before investing. Homer Smith is an investment advisor representative of Konvergent Wealth Partners. Konvergent Wealth Partners and Homer Smith are not affiliated with AES Nation, LLC. AES Nation, LLC is the creator and publisher of the VFO Inner Circle Flash Report. Investment advice offered through Integrated Partners, doing business as Konvergent Wealth Partners, a registered investment advisor.