Family Office – Governance in an educational context

Education in the context of family governance is one of the major points that family offices and ultra wealthy families are currently dealing with. On the other hand it seems like a niche service provided by the family offices and service providers directly adressing the needs of this highly sophisticated clientele.

Looking back to my panel in New York it seems that people trying to simplify the topic as a whole instead of using a more holistic approach. There are so many different ways to deal with the topic and there is no such thing as one fits all.

One family for example is givng their kids some “pocket money” but they deduct 30% of it as taxes. (Money is than used to educate the kids in finance) – The son is aged six!

Another family opened a “gambling” account for their successor just to get him introduced to fund management, different styles  of how to select the right company, corporate finance, financial markets – supported from one of our seniors who is a successful manager of years. He could have kept all the money he made – beating the market and passing a hurdle rate.

One of our families choose the approach of integrating their successor in the company in various roles when he was still at school. He travelled the globe and gained experience in their hundreds of branches. He is now a board member at 25 owning a significant share of the company.

As you can see there is a rather individual approach how to deal with the immense wealth these families have accumulated. Kids are taught numbrs in school but most of them are unaware of finance – at least if it comes to real life matters.

Therefore I´ve chosen a different track to support the people we are responsible for – I took a three year track to became a teacher. Not do I only think we as individuals should be learning every day – I took courses from some of the best universities over the last 15 years or so but it is also a matter of how you transport this knowledge in an ever changing environment.

The children today are used to modern communication tools because they grew up with it whilst msot of us did not. So we need to adapt and make it appealing to them. If they are not interested in a topic it is not up to them, it´s upt to us to present it to them in a meaningful way. We as a family office introduced our own academy which best helps to foster the needs of the next generation of our clients.