Kristen Oliveri is Family Office Network’s Content Director for North America.
My blog will discuss the hot trends and developments in the family office sector.
The key to success within a family office that employs family members might not be obvious. It has nothing to do with investments, structure or even due diligence. But it has everything to do with engaging the next generation.
While it is no easy fete, engaging them in the family business, the family office and the family’s philanthropy can help spark their true passions and it turn become a way to connect multiple generations. From my many conversations with family offices, I’ve been told that it comes down to how strong and open relationships are amongst the multiple generations in order to have a flourishing family office.
I recently moderated a panel at the European Family Office Symposium in Lake Como, Italy. I sat down for a one-on-one interview with Stephanie Margaronis of Targamar. Coincidentally, she happens to be the second generation of a Greek shipping family, but also the family member who launched the family office several years ago after their liquidity events.
While she spoke at length about her investment strategy and navigating the Greek shipping market, she also touched upon the importance of open communication between her and her father—the family’s patriarch.
She explained it can be challenging at times, but it is their strong relationship that has helped the family office thrive.
One of the guest speakers at Lake Como was Franco Lombardo, author of “Great White Elephant: Why Rich Kids Hate Their Parents”. He addressed families about this very notion about communication and having each person within the family understand their own “money mottos.” To put it simply, if you’re going to run a family office or a family business, the multiple generations need to be speaking the same language—or at the very least, understand the other’s language.
It does and should fall on the older generation’s shoulders to take the lead and encourage the next generation to communicate and follow their passions. By doing so, many other aspects of the family office will fall into place.
Another very effective way to motivate the next generation is to engage them through philanthropy. By finding a cause or an organization that the family believes in together, they can begin to work as a team towards very important goals.
Many FO next gen members who attended the conference expressed frustrations with their elders who either lacked a clear vision for the family office or who might have favored one sibling over another, anointing one as a successor when in reality that particular sibling might have zero interest in taking over the family office.
While communication only scratches the surface of beginning to deal with next gen issues, I hope FON can provide a safe haven to have these conversations and foster creative solutions.
To that end, we’ll be launching a Next Gen group on FON where leading family office professionals can share and exchange ideas with one another.
For any questions regarding the group or to find out more about it, please email me at Kristen.oliveri@institutionalinvestor.com.