There’s a process families should use in selecting the advisors who serve them. Otherwise, they may be mismatched with advisors who are not well suited to their needs or to helping accomplish their goals. The same goes for advisors. They settle for working with less than ideal clients, thinking they have to be all things to all people and to take on anyone and everyone who has significant assets.

As consultants to families of wealth and their advisors, both are our clients. So we see both sides of the coin and we work with family clients and advisors to help make those relationships as rewarding as possible for both.

 

It all starts with a family’s governance system. Many families relegate governance to either the managers of their family business or the staff of the family office when it is the family itself who is responsible for its own governance. Why? The role of the family business is tactical. Its job is to materialize the family’s wealth into the form of financial capital as efficiently yet prudently as possible. The role of family governance is strategic. Its job is to identify the family’s needs and goals, fostering the development of strategies designed to accomplish them. Since the roles of the two entities—the family business and the family—are so inherently different, family business management should not be governing the family. Nor should the family office staff and advisors.

 

Where do the family office and its advisors fit in? The family office is a service entity. As an advisor, your job is to employ your expertise and experience in helping the family achieve its goals and fulfill its needs. Otherwise, it doesn’t make much sense for you to be involved. When choosing advisors to serve, the family should know:

 

1)     The needs and goals outlined by the family governance system

2)     The type of advisor they are looking for and for what purpose

3)     The role they expect that advisor to perform based on their needs and the advisor’s expertise and experience

4)     How the advisor will be expected to work with other advisors to the family as well as family and family office executives

5)     Reasonable expectations for the advisor’s service and performance

 

So, what does this have to do with advisors? It guides them toward the clients with whom they should be working. It tells them the expertise they should have and the approach they should take with families with significant wealth. By educating themselves toward this end, advisors will work with the people they enjoy and will serve them at the level their clients expect.