The family office space continues to evolve rapidly in Canada and around the world. With more entrants joining the space (for better or for worse), more recognition of the diverse and complex needs of families, and an increase in the number of enlightened client families looking for integrated solutions, the winds of change continue to pick up speed.
For those attempting to provide the array of services that families are expecting, the recent lack of qualified human resources that’s affecting the economy in general has not escaped those attempting to properly staff their family offices.
Many are realizing that they need to up their “people game” in order to effectively lead and guide families in their increased focus on their own human capital, and good people still don’t grow on trees.
Even if they did, planting them now is likely too late.
Let’s look into some of the elements of this challenge.
Changing parameters of the workforce
As baby boomers continue to age out of the workforce, and millennials and Gen Z become bigger players, the sands have continued to shift underneath any organization trying to attract the talent it needs.
The pandemic has only added to the uncertainty. As more folks return to the office, we know that things are different, but we can’t yet be sure what they’ll look like. But we can be pretty sure we won’t be going back to exactly the way things were in 2019.
The demographics were already changing as the “gig economy” gained popularity among younger workers. There’s an evolution going on, and for some it may suddenly seem more like a revolution.
Matching the demographics of the family
Meanwhile, family offices and those who serve families of wealth in general have begun to realize that in order to remain relevant and “sticky” with their clients, it’s become more important to engage all generations of the family.
This has necessitated finding people who are trained and comfortable dealing with family dynamics. Advisors who specialize in the “family circle” are finally getting their due, although perhaps not as swiftly as many would like.
This work in progress will likely continue for a while.
Limitations of the employee-only model
Both multi-family and single-family offices face the challenge of bringing the right combination of resources together for the families they serve. Many have realized that they can’t fit everyone on the payroll in the traditional “full-time-employee-only” model of yesteryear.
The family-dynamics coaches, facilitators and mediators who are worth their salt are not necessarily easy to find or cheap to bring on board.
Flexibility is required on all sides – the family offices, the clients, and the many freelancers who are able to handle the relationship aspects that working with all family members requires.
The clash of exclusivity and freedom
If we begin with the premise that important clients deserve to have a choice in who serves them in such sensitive roles, and we overlay the fact that highly qualified people have more options, the limitations of the employee-only model become clear.
Any family office’s desire for exclusivity runs counter to the freedom that many independent professionals typically insist upon. The relationships between the family office and outside providers can be tricky and requires creativity and flexibility on all sides.
The remuneration for these professionals and how the family office charges the client family can take on different forms, so long as it all makes sense to those involved.
This is yet another angle on the old adage “if you’ve seen one family office, you’ve seen one family office”; it’s just another element of customization that needs to be worked out.
Herding cats or lone wolves forming packs
The number of such freelance advisors working in this space continues to grow as both family offices and enterprising families discover the importance of doing this work and the potential resources available to them.
Through organizations such as Family Enterprise Canada, with its FEA program and designation, along with STEP and the TEP, FFI and its accreditation program, there’s more cross-pollination going on than ever. It behooves professionals to join or form peer groups so they can learn from each other and create referral networks among like-minded peers.
Ideas whose time has come
A confluence of factors continues to move the family office industry to do better and deeper work for families, and finding the best match of the human resources required to meet the task is a growing challenge. An interesting future lies ahead, and we can’t know for sure how it will all shake out.
Creativity and flexibility between those who have the client family and the providers who serve some of their unique needs will be a requirement going forward.
As long as everyone keeps the needs of the family members front and centre, and that continues to be the priority, there are opportunities to get this right for the benefit of all.
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 FEA Council of Family Enterprise Canada (FEC); as head the Wisdom Expedition of the Purposeful Planning Institute (PPI); and as a member of the faculty of the Family Firm Institute (FFI) global education network (GEN) program.
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