As clients demand more, Ten Domains model can help family offices deliver

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The family office world continues to evolve all around us, seemingly more rapidly than ever. In many ways this evolution is welcome, and certainly necessary.

The vocabulary itself is in flux, as the terms “family business” and “family wealth” are now often combined into the expression “family enterprise” and its mirror image, “enterprising family,” depending on whether you want to highlight the business aspects or the family angle.

A true family office is often an outgrowth of a successful family enterprise, with an emphasis on consolidating and formalizing a family’s desire to maintain all of its holdings in a professional manner.

The professionals who serve these families continue to search for the best business models to make their services a win-win proposition, as this field becomes a true ecosystem. Families and those who work for them also continue to adjust and pivot so they can maximize their wealth and capital in all its forms (financial, human, social, etc.).

The family office advantage

The attractiveness of having or using a family office continues to grow and draw interest from families and those who serve them. This leads to a greater need for caveat emptor than ever before.

Sticking the words “family office” onto a firm’s name does not make it so, and let’s not forget the old adage that if you’ve seen one family office, you’ve seen one family office. In its simplest form, a family office becomes a one-stop shop that handles activities and services on behalf of a group of family members, hopefully in a formal and professional manner.

To aid in understanding all of these services, there’s a relatively new model that I like to use to think about and describe what families are actually looking for, from the U.S.-based Ultra High Net Worth Institute (UHNWI).

It’s called the Ten Domains of Family Wealth, and it brings together the views of the multidisciplinary ecosystem to serve families in an expansive way, detailing many of the areas in which families face challenges in ensuring their wealth will survive intergenerational transitions.

Three areas of focus

The Institute’s white paper details each domain individually, but I want to focus on the three main areas that they highlight.

The visual rendering of the model has what looks like a pie, with nine slices, along with a nice scoop of ice cream right in the middle.

The top four slices are part of the Wealth Creation and Stewardship section, while the bottom five are labelled as Cultivation of Family Capital. The center portion, for which I used my editorial licence to label as the ice cream, is perhaps the most interesting area, because it’s called Family Advisory Relationships.

The Wealth Creation and Stewardship section includes the main areas that most people think of when they consider the needs of wealthy families, such as investments, legal services, estate planning, risk management and philanthropy.

The Cultivation of Family Capital area is composed of what many consider the “soft skills” (but which are very “hard” to deal with for most), such as family dynamics, governance, leadership development and health and well-being.

The professionals who work in the top four sections are used to collaborating with each other on family client files, as are the ones within the bottom five.

That “messy middle,” however, where the “twain shall meet,” is what we need to continue to work on as an ecosystem, because those who specialize in the wealth creation domains don’t frequently interact with those who focus on cultivation of family capital.

From coordinating to collaborating

What the Ten Domains model makes clear is that families require support and resources in many areas that may have been overlooked in the past, and that many professionals who serve such families likely gave scant attention to.

Finding the right way to make sure families get those services has become the challenge, because not only is there a lot of ground to cover, but the ways that each profession traditionally works with families varies greatly from one to the next.

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This is what makes that messy middle, the Family Advisory Relationships, so fascinating.

Everyone wants to be the “quarterback” and the “most trusted advisor,” but with such a variety of needs, many of which rear their heads at different times, that single, central approach may be a thing of the past.

The idea of learning to play well together is becoming more important all the time. Someone needs to act as a coordinator for all of this, and that’s where a true family office can obviously add lots of value.

Such collaborators then become important instigators to true collaboration among the various professionals who serve the family or families.

All under one roof?

Last year in this space, I shared my thoughts on how those who serve families face challenges in finding the right resources (Sands shifting under family offices as they seek the talent they need). Those sands may not have solidified much, but the recognition that multi-disciplinary teams are needed continues to grow.

The central domain of the Family Advisory Relationships remains the key to much of this conundrum.

Some best-in-class professionals of yesteryear will surely be replaced over time with those who can help bring together all of the right people from a variety of disciplines, to handle the true work these families are beginning to demand.

Some combination of in-house experts and a bench of outsiders who can be brought in as needed seems to be one way to square this circle.

Training and learning collaboration

As a graduate of Family Enterprise Canada’s FEA program and designation from the early days who continues to be involved with the organization, I can say that I’m proud this program has continued to evolve over the years, even as it has put nearly 500 people through the program in service of families across Canada over the past decade or so. (See Updates to the Family Enterprise Advisor program for 2023.)

Successfully collaborating on a project in a multi-disciplinary team, serving a real family, is necessary to complete the program.

As a result, families in Canada have better access to the kinds of professionals who truly get the importance of this, compared to families anywhere else in the world. There’s more training and cross-pollination than ever before, and more and more peer groups arising to ensure continued development and learning.

This is all part of a fortuitous circle, where the supply side continues to better organize itself in order to serve the demand side of families who are themselves becoming more informed consumers.

Let’s all learn to do this work better for all concerned, because it’s the ultimate win-win, creating bigger pies for all. Bring on the ice cream!

Steve Legler is a Family Legacy Guide based in Montreal. He grew up in a business family, destined to take over the company his father had founded before he was born. After an unexpected liquidity event while he was still in his 20s, he ended up managing their family office instead. In 2013 he stumbled into the Family Enterprise Advisor (FEA) program, which turned into a career-changing calling for him. Since then, he’s been working with other business families as they face the challenges surrounding their intergenerational transitions. He works with family clients as a facilitator and sometimes as a mediator. He also does individual coaching with family members. He is the author of SHIFT Your Family Business (2014) and Interdependent Wealth: How Family Systems Theory Illuminates Successful Intergenerational Wealth Transitions (2019). He is active in many associations for professionals who work with families, as a member of the faculty of the Family Firm Institute’s global education network program (FFI-GEN), leader of the Wisdom Expedition for the Purposeful Planning Institute, and one of the hosts of Family Enterprise Canada’s “Let’s Talk Family Enterprise” podcast.

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