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Who’s Coordinating Your Advisors?

Who’s Coordinating Your Advisors?

by Buddy Thomas

There is an old proverb from India about five blind men trying to describe an elephant. While together they accurately list all the features, their overall understanding of what they are encountering is incomplete. They lack the context of how the parts fit together in a way that would enable them to comprehend and appreciate the whole animal.

Yet a small boy with a view of the entire creature can size it up and soon easily guide the giant being with nothing more than a stick.

A moderately wealthy family’s advisory team today usually includes a wealth and/or life insurance professional, at least one attorney, and a CPA. Additional members may be added to the team for specific tasks or projects such as bankers, specialized business consultants, behaviorists for family governance and family dynamics, and philanthropy experts.

Quantitative advisors are concerned with their individual planning specialties such as legal, tax, investment, life insurance, valuation, and fiduciary planning.  Similarly, qualitative advisors focus primarily on the more human aspect of the family enterprise addressing member education, conflict resolution and family political matters.

Rarely is there anyone on the team who takes responsibility for the management of the family enterprise as an overall integrated program that evolves over time, much less over generations. In practice, it is often the client, one family leader or another, who’s the “telephone operator” calling individual meetings, patching together a piece meal plan, implementing unrelated initiatives and transferring information among the advisors.

As time passes and family complexities continue to build, questions tend to arise such as:

  • Who, if anyone, can the family turn to coordinate all of these advisory team member activities to assure everyone is moving efficiently and effectively in the same direction?
  • What skills and experience are absolutely essential to assist family’s leaders as they guide the family operation day by day and strategize for the family’s future?
  • What can be done to preserve the family values and nurture the growth of family members now, and prepare for future generations?
  • And. if your family should hold together for 25 or 30 years, what can be done to help the family organization evolve with them?

In the relatively slow moving Industrial Age of the past century, certain family leaders supported by dedicated family offices appeared to hold it all together with personal strength and shear will power. However, statistics show that even some the richest and most powerful families of that era collapsed upon the death of the founders.  Most single family offices of those early wealth builders tended to break down and dissolve on the passing of the first generation.

So where does a family who wants to stay together as long as possible turn?

A new breed of family offices serving multiple families are now forming around the world to fill the need.  These “modern” family offices are stand-alone, objective, third-party continuous entities. They support families by coordinating and facilitating the interaction of the myriad of multiple specialists now necessary to protect and grow their family wealth.

Based on an article by Philip Cubeta, Thomas Rogerson & Martin M. Shenkman – November 2017

Buddy Thomas is Founder and Chief Planning Officer of Superior Planning. He can be reached at buddy@superplan.com

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