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Adam Hoffman

With great power comes great responsibility

Hello once again. Financial resources can help or hurt your family wealth, your personal definition of success, and over time, your legacy in your family.

Family Wealth = Resources (Human Capital + Relational Capital)

Family Wealth = Success = Family Legacy

This month I’m sharing an article that I co-wrote with a close friend for decades who also works in family wealth wealth, Ari Fixler. We were given the opportunity by Olympia Trust to write something novel and interesting for their website. We chose the area where our professional interests overlap; your financial goals.

Goals-based planning is absolutely central to the work I do and the way I see the world. As noted in the article, wealth accumulation of all scales must answer the question “so what is money good for?” and wealth of all scales is well-served by not ending that answer at the all-too obvious and trite “to retire”.

I hope you enjoy 🙂

Investment strategies are like those big cookbooks with countless recipes. You tend to pick the meals that are the most gourmet, but really, you should pick the meal best suited to your taste and ability.

When we sat down to co-write this article on goals-based planning, we came at the topic from our respective seats in the wealth management industry. Ari is a wealth management Investment Advisor and Financial Planner and has been in the trenches making retirement possible for Canadians for 17 years. Adam is a lawyer with a tax and estate planning focus that most recently ran a Single-Family Office for a fourth generation Canadian family and their wealth management firm. We have seen a lot of aspects of wealth for families of all sizes and at all stages. There is no doubt that one topic binds us all: planning.

As two born and raised Calgarians, we have seen the growth of this incredible city and the personal wealth that has been gained as a result. The amount of wealth the Baby Boomers have created is truly astounding. Yet, a large percentage of those successful Boomers did not consider themselves happy, successful, fulfilled or even wealthy!

Their relationship with their financial success was not well-formed, not clearly articulated, and without a clear reason for the wealth creation, some of those “success stories” became legitimately unsuccessful.

When we get together and talk about success, we try to clarify our “wealth purpose”. Good fortune comes to those that know why they seek wealth. This good fortune is available to everyone intentional enough to discover it.

The key to a successful investment strategy

The key to a successful investment strategy happens prior to the strategy creation. The goals are the foundation of your investment house. Without a solid base, your investment strategy is bound to crumble under the weight of uncertainty.

Sure, there are many other critical topics in investment strategy (risk tolerance, liquidity tolerance, geographic and industry specifics come to mind) but families that have laser-focused, strong answers to the key question, described below, meet their investment goals far more often than families that don’t.

The key to your investment strategy is your goals. What is your investment strategy driving towards? To frame the question as simply as we can: what is the wealth good for?

We all feel the urge to answer this question simply, as it relates to our basic human needs, and leave our inquiry at that. This might sound like the answer currently in your head: “I want money so that I can work less, or not at all, and still have the lifestyle I aspire to have.” This is a strong enough answer for your investment advisors to develop a strong financial plan and get to work, like the work Ari does with his clients.

This is a good answer. However, the best plans go deeper. The best plans require that you explore your emotional relationship with wealth. The best plans contain very careful detail about your lifestyle goals to avoid lifestyle-creep (the idea that your lifestyle spending seems to always increase in correlation with your income).

Wealth creators that have solved your basic human needs have even more responsibility to work out clear answers for your investment goals. We slightly alter the question for these individuals to “what is all this money actually good for?” and whenever wealthy people align their investment strategies to their evolving answer, they find greater contentment and satisfaction. They find their wealth purpose.

Back when we first started hanging out together as friends in the early 90’s, if we weren’t listening to music, we were reading comic books. It’s not surprising that we reference Spider-Man for some life philosophy. Uncle Ben’s key advice to Peter Parker applies to your wealth. Wealth is an incredible resource, a type of superpower, and it can be harnessed to fulfill your life, improve your well-being, and impact the lives of those you care about. Wealth is power and as Uncle Ben pointed out: With great power comes great responsibility.

By building effective goals, you clarify your wealth purpose (the point of creating the wealth in the first place). Without goals, the chances increase that comfort and luxury overstep their boundaries. Without goals, unnecessary investment risks are way too easy to take.

If planning is where all wealthy individuals must excel, it is probably clear that the key step in the planning is to answer and understand what your goals are. What are you trying to achieve? Sometimes the most important questions to ask are the most obvious ones.

We hope this obvious question is not just left as a mild curiosity. Attack it! Get the notepad out and start exploring your answers. As Uncle Ben would advise, take responsibility! The pursuit of clarity of your wealth’s purpose will be valuable, we assure you. Success as you alone can define it.

Rooted in discipline

Spending your money on your people and their relationships should have no end. The result of all of that spending will be the most educated, wholesome, actualized, effective wealth stewards that family wealth has ever known. April Fools 😉… if only it were that easy!

The Wealth Equation:
FW = R (HC + RC)

Let’s talk spending; specifically distribution policies.

I have noticed that distribution policies are the battle line of family wealth strategy. To whatever degree that cash flow is reinvested in historical family investments, most commonly the family business, the decision is always seen as sound.

This is the root discipline of financially successful families (foreshadowing warning!)

Multiple activities converged this month to make distribution policies top-of-mind for me. It started with my work on the Family Bank; I’m excited that in the near future Daniel Trimarchi and I will have a STEP Journal article on the topic published.

The Family Bank establishes a formal distribution policy for families that desire governance discipline for their investment decisions in their human and relational capital pools. Going from an informal ad-hoc “bank of mum and dad” to a formal Family Bank is my favourite governance tactic as it combines family values, family goals, policy/procedure and strategy all towards my favourite aim; family flourishing.

Here are my Family Bank articles for Canadian Family Offices.

Another recent distribution task: I was asked about ownership strategy and how it relates to family wealth strategy. Family wealth strategy covers spending at all levels of the family enterprise. Ownership strategy is the shareholders of the holding company that must balance the business’ capital reinvestment strategy with dividends.

All owners are wealth stewards but not all wealth stewards are owners.

Once the complication of reinvestment versus dividends is settled, the use of the dividends requires some consensus: what is the budget for family-centric spending from the dividends? How will the family spend on matters like family retreat and shared property expenses before the owners receive money for their independent spending plans.

Lastly, a podcast interview of John Warwick included a story of a family with a remarkable distribution strategy: none! Over three generations, not a single dividend had been paid from this real estate family. Everyone lived within the means that their employment could support… and the cash flow of the business was entirely reinvested for decades!

The role modelling that each successive generation of this family showed within their stewardship is certainly admirable. Although I would not recommend it to any families myself, at least now I had a perfect example for an important metaphor in distribution policy:

The oak tree metaphor: when families focus on building the strongest of trees with the deepest of roots.

I love using trees as metaphors in distribution policy design, going back to the beginning of my trust law courses from law school.

In trust law, there is a distinction between income and capital beneficiaries. When we explain the difference, we use the “fruit and tree” analogy: income beneficiaries receive the fruit of the trust’s property and capital beneficiaries are entitled to cut down parts (or all) of the tree.

That real estate family with no distributions? They represent the deepest of roots. They invest in whatever it takes to make that tree stronger and stronger. They do not even have to consider seeds at this point; they are entirely focused on one big tree. Certainly no fruit!

But what happens when, despite the strength of that tree and it’s roots, it comes falling down? Where is the family then? There are always tradeoffs in family wealth strategy.

Families that diversify and invest in multiple areas address this risk by caring about populating the future of the family with new seeds. This diversification is valuable to the family long-term. Innovation (which begets family enterprise resilience) arises from the highs and lows of investing in new ideas. This carries more risk in the short term but as noted by Nassim Taleb, an anti-fragile goal requires these exposures to risks to grow stronger long-term.

Taking the tree metaphor to it’s anti-fragile extreme, a family might make their distribution policy metaphor to be that of a dandelion! They invest entirely in the distribution of the seeds and don’t set roots down anywhere. Now, that would be some chaotic capital investment strategy indeed!

I’m still waiting to hear of the family deploying the dandelion metaphor in their distribution policy; please let me know if you’ve heard of one marvellous Reader!

Strategy before tactics

Family Office Perspectives uses the family wealth equation above, described in writing as: your family wealth (which, over time, is your family legacy) is equal to the product of your resources multiplied by the sum of your capital pools.

The Wealth Equation:
FW = R (HC + RC)

I use “human capital” and “relational capital” in the family wealth equation to define the capital pools, but it behooves me to point out that Jay Hughes describes the capital pools as: Human, Intellectual, Social and Legacy. Here is Jay’s infographic: *

First Republic Bank

So where does the rubber hit the road here. How do families actually figure out out how to deploy their resources and take actions that actually improve the family?  

When I consult on family office design (in my Strategic Reviews), I prioritize aligning family office ecosystems tactics with the family wealth strategy. Here is how I define the challenge:

Family wealth strategy aligns tactics with your ‘why’ (your family wealth goals) to ensure family wealth stewardship includes profound meaning, genuine affinity, and actualizes your ability to make a difference. 

I’m sure you can imagine alternative futures where the effectiveness of the strategy instructs the effectiveness of the tactics… on all family wealth matters.

If a family wealth strategy is exclusively financially focused, what many family offices focus on, the strategy is missing the link back to the stakeholders and their purpose for the investment success. The tactics are clearly not aligned.

Is your current strategy “let’s move from this fire to that fire”?

If you address family office ecosystem strategy from the tactics level, you are chasing the closest fire to put out.

That is exhausting.

Over time, it leads to overly complex and misaligned family office ecosystems. Here is a list of tactics I commonly address during strategic design:

Mission/Vision/Values,  storytelling,  ritual,  family meeting, family retreat, problem solving (informal governance), formal  governance, communication strategy, ownership  literacy,  values alignment to strategy, family bank, role of entrepreneurship, investment  policy,  distribution  policy,  personal development  strategy,  health and wellness  strategy,  impact investing, philanthropy strategy, advisor ecosystem (tax, insurance, legal, investment, PR), cybersecurity, physical  security,  privacy,  reputation management,  treasury function, custodianship, financial projections, financial control, concierge, community service,  definition  of  family,  family  member addition/subtraction policy, lifestyle design, the role of pursuits and flourishing, the family’s 10 year plan (sometimes 25-year or 100-year), and last but not least, family legacy.

OK, take a big breath and smile because that list is a little ridiculous. Tackling all of it over the course of a generation is a sign of a really intentional, impressive family. Addressing them over a decade is the stuff of family stewardship superheroes! Strategy is required to address these tactics effectively.

The recipe of family wealth strategy requires a dash of priority and many heaping spoonfulls of “no” and “not yet”

What effective family leaders must do is prioritize the appropriate tactics, to use their time (our most valuable resource) effectively, and only pursue the outcomes that align with the family wealth’s purpose.

This process is laid out very nicely in the below infographic I first came across in Edward Marshall’s recent Family Wealth Report article.

I love the infographic because I can see it being used live and in real time with family leaders. They would map a good decision immediately to those five key steps (strategic alignment, resource deployment, operations function, risk management function and performance review plan)

Yet the first step, the question “does this step improve the quality of my life for my family?” is the big key.

Family Wealth thought leader Edward Marshall describes the use of this infographic very well in his article. I highly recommend the article but in case you miss it. Here are the highlighted takeaways:

  • families need more strategy;
  • have a CGSDO (“Chief Get S**t Done Officer”); families need a quarterback that can manage the complexity and report back to the family effectively;
  • don’t fight fires, develop KPIs and monitor them. This is how to stay ahead; and
  • “… families are uncertain about 1) which risk management services are accessible to them, 2) what constitutes “excellent” risk management services and outcomes, and 3) [being marketed] risk management services on the basis of fear.”


Family office ecosystem tactics require a very strong understanding of the family wealth’s purpose, the family’s objectives, and a clear understanding of the tradeoffs occurring when balancing the risks, resources and people in the family’s family office ecosystem.

You fantastic family leaders will be able to strategize the long list of family office tactics most effectively once you have a working answer to the question: so what is all this money actually good for?

Why Invest for Impact?

Investing for impact is a key strategic element in finding the right ways to deploy your financial resources.

The Wealth Equation:
FW = R (HC + RC)

In designing my family wealth strategic review, I distilled all of a family’s potential financial capital deployment goals to three categories. Two of those categories are moreso about each family member: well-being and flourishing. The third category is moreso about others and yet below I focus on how helping others is symbiotic for family cultures.

Today, I want to talk about investing for impact.

The term “impact investing” has become synonymous with ESG investing in some circles (not for me!) So I will stick to “investing for impact” to distinguish what I am driving at.

Investing for impact has a significant positive boost to family culture in my experience. Helping others helps you to.

Investing for impact will significantly improve your family culture.

I challenge families to articulate their “why”, their unique answer to the tricky question “so what is all this money actually good for?”.

Answers that relate to well-being and flourishing, I often compare to deploying financial resources in hopes of fulfilling the needs on Maslow’s hierarchy.

With impact, Abraham Maslow’s work is still illustrative but this time, it is his concept of transcendence. *** Transcendence is the stage where spiritual needs really shine. Transcendence occurs when putting others’ needs ahead of your own. I believe impact investing fulfills transcendent needs.

Yet capital deployment for impact can go beyond philanthropic endeavours. Families will thrive for generations if they can find ways for the money to support their family members’ transcendence.

Counterpoints to investing with impact 

For some, an investment policy statement that includes a concept like “impact” does not resonate. I certainly do not want you, dear Reader, to hear “ESG” when I talk about the role of investing with impact in family wealth strategy. **** So, from that view’s skepticism, I say:

  • Purely altruistic investment ideas that do not materially grow your human capital are not what I’m talking about… I call that “missing the script” of investing for impact. Capitalism is an incredible tool for progress in our world, and applying capitalism to key human and environmental benefits is certainly worthy of us capitalists’ efforts.

Another skepticism of impact investing is the notion that non-financial goals should never be included in investment strategy. To those skeptics I say:

  • Impact does not have to be a straight line to the most altruistic of investment goals. But if there is no line between investment goals and the non-financial values of the family, the family’s investment discipline (and commitment to core values) is far more likely to weaken through time. Consider the addition of non-financial goals to your investment strategy as still an investment; it is an investment in the quality of your Human Capital and Relational Capital.

Family Wealth = Resources (Human Capital + Relational Capital)

How the family perceives their investments counts for a lot 

I’m reminded of a conversation I had with a real estate family that did not like low-income housing (the financial models are difficult and usually require government intervention for the returns to work). The patriarch was clear; “we build homes to make money. We use philanthropy to do good. They do not overlap.”

One of the family’s Rising Gen stewards simply could not agree; if the financial capital did not do good, it was bad. You can’t just want to make money.

And as a loving family with space for diversity of opinions, they dove right in.

It was a little messy and a lot confrontive. And that was only while I was still in the room.

The report back to me was that they indeed ended the discussion with complete alignment; consensus amongst the generations. Huzzah!

And the kicker? There was no change to the business. What they found was alignment of values around growing the local economy. They agreed on the role that real estate development has on economic progress, which pulls forward educational progress for the local citizens, and ultimately builds a stronger society. That alignment was more than strong enough for both generations to support the home building business.

Over to you, dear Reader; a challenge and request

Does your family know the “why” of your investment goals?

I’m very much looking forward to your description. Maybe you have specific non-financial goals written into your Investment Policy Statement. Maybe you have a Vision Statement that relates. Perhaps you, like many families, can tell me exactly what you do upon reflection, but do not have anything written down yet.

Well then why don’t you write it down in an email to me and then send it to your family members  😉

I’m learning from all the great (and varied!) answers that you incredible wealth stewards have to offer. Thanks as always for sharing.

Strategy – the bridge from goals to outcomes

It has been an absolute treat to write this Newsletter for two years now; I treasure your feedback (and referrals are the absolute best form of gratitude!)

We have used a family wealth equation in every Newsletter to add perspective to your definition of family wealth. Getting clear on your family’s why, your family’s unique answer to the tricky question “so what is all this money actually good for?”

The Wealth Equation:
FW = R (HC + RC)

I hope you have asked yourself at some point in this Newsletter’s journey, “ok! I get that my family wealth, my definition of success, requires utilizing my resources well to build stronger people and relationships, so now what?!”

“Now what” is my focus professional this coming year. Goals for the money naturally arise from your vision of family wealth success and aligned tactics should be deployed to accomplish those goals.

The task therefore turns to family wealth strategy

Most tactical advice is rightfully specific to key topics (investments, finances, tax and insurance) and yet those specific topics are tricky to optimize if it is unclear how they fit within your goals.

Goal setting for families with generational wealth is not given enough focus.

Family wealth strategic questions: where is the world heading, where is your world heading, and what do you want your family to become in that world? Similar to business strategy, these are tricky questions with unclear answers, yet thinking strategically is oh so valuable.

Family wealth strategy is where all great family wealth stewards operate from.  

Your family wealth goals will relate to three overarching topics:

  1. well-being (principally, physical and mental health),
  2. flourishing (principally, self-actualizing and taking meaningful action), and/or
  3. impact (supporting others).

Here is my current working definition of family wealth strategy: 

Family wealth strategy aligns tactics with your ‘why’ (your family wealth goals) to ensure family wealth stewardship includes profound meaning, genuine affinity, and actualizes your ability to make a difference. 

Please let me know your thoughts on this definition…

While there are at least 50 tactical topic areas worth addressing within your family wealth strategy, none are as effective as they could be without clearly identifying your Why, then setting your goals and only then working on tactics.

Cheers to your calm, cool and collected wealth stewardship future! 

What is the value of effective family wealth strategy? I love the added meaning the wealth has for the family, I am astounded when families use their resources to build stronger people and relationships leading to more love, and I am impressed when families find their unique ways to make a difference but for me, the value of effective family wealth strategy: reduced stress.

Stress is a killer!

Sure, it is also eustress, but stress derived from family wealth is typically counterproductive. The money (and time) spent on wealth stewardship should be, to as great an extent as possible rewarding. That is my mission!

What’s next for me

In 2024, I embark on a year full of family wealth consultation. It is going to be an exciting year for me! To end 2023, I built a Family Wealth Strategic Review process and plan to complete it with 30 families this year. I hope you are one of them; building your family wealth strategy and aligning it with effective tactics is a fantastic journey.

The symbiotic beauty of strong advisor ecosystems

Read on to learn how to work and plan well with your advisors in this month’s edition of Family Office Perspective.

The Wealth Equation:
FW = R (HC + RC)

Your family wealth is equal to the sum of your people and the quality of their relationships, as amplified by your resources.

Your family wealth strategy aligns your desired outcomes with your goals. To clarify your goals, keep answering the question:

“So what is all this money good for?”

To which no one says:

“To add stress to my life and make my tax professionals my closest advisors because of the complexity of my affairs.”

Like, literally, no one says something like that…

This month’s perspective is on working with advisors. Your relationship with your advisors is very important. Ideally, they bring calm to the complexity. There are too many topics regarding the importance of advisors to reduce them all to one digestible perspective, and so with the value of your time firmly in mind, let’s address the elephant in the room – alignment.

What are your advisors’ incentives and how do they align with accomplishing your goals?

Being paid by the hour or by the project breeds a peculiar incentive misalignment. Both client and professional are incentivized to reduce the time they spend together:

  • the advisor is misaligned because they must exhibit efficiency, and
  • the client is misaligned both because of cost management for by the hour engagements, but also, the feeling that if they are not efficient themselves, they are somehow wasting a busy person’s time.

This latter behaviour may be exclusively Canadian, to our foreign friends – (please tell me if this resonates at all?). We are generally careful about other people’s time.

I wanted to focus on this misalignment because these incentives can lead both parties astray on the extremely important matters that are not urgent, specifically on wealth planning and strategy.

Here are examples of ways that the client and professional often allow misaligned incentives to disrupt effective strategy execution:

  1. Lawyers fail to explain key aspects of their documentation;
  2. Accountants fail to explain key takeaways from their financial reporting;
  3. Professionals miss opportunities to strategize with their clients proactively and help plan for future events;
  4. Clients hesitate to approve interactions between their teams and their advisors; and
  5. Actions are taken by professional advisors that don’t align with the client’s goals.

Invest your time and money into your understanding

Like preventative health, the client must take their planning affairs as seriously as their advisors, lean in, and work together on the matter. This can be daunting; an obligation to rise to the level of knowledge regarding a complex matter as their advisors’ knowledge.

Yes, there is a commitment to literacy required, but less than you probably believe. Certainly less than your advisors expect of you. Pretend (or actually!) present a planning concept to your kids as a measurement of an acceptable standard of understanding. Don’t seek and expect perfection.

By obtaining this level of understanding, you are setting yourself up for the most important aspect of working with advisors – ensuring they understand and are being held accountable to your goals during strategy planning.

Strategic planning sessions

Careful attention to goals alignment during major actions is more common but families get further by planning even without major tasks on the near horizon.

Take this from a former hourly rate professional: we love when our planning and strategy advice is valued. We love when clients want to take the extra time to understand what we are working on for them. But not all professionals will realize when to lean in.

Create the space for your advisors to help plan. Ideally, have quarterly meetings with integrated planning topics in mind. Bring the Agenda and let the pace create openings for matters previously unconsidered. Be curious. Bring a humble mindset. Ask the questions truly on your mind and not the “right questions”.

You will be surprised how well your advisors plan together to match efforts to your ideal outcomes.

I believe the quality of an advisor ecosystem correlates almost perfectly to effective generational wealth strategies. Understand their incentives and create the safe space for them to be a part of your future strategically. You will be rewarded.

And if you feel like strategic planning and collaboration are not tasks your trusted advisors would relish, you had better go find better ones. Don’t settle!

I’ve started to complete Family Wealth Strategic Reviews. It has been really rewarding so far and I’m just getting started. I will be launching this service on LinkedIn in January and have only 24 spots available for 2024 – just email me to get started!

To the journey,

Adam Hoffman, LL.B, TEP
Fiduciary, Trustee and Advisor

Stewardship is a responsibility, not an accounting degree

Stewardship is a responsibility, not an accounting degree

In this month’s edition of Family Office Perspective, I’m translating a soapbox thought into a coherent perspective.

Sometimes I find myself developing a ‘soapbox’ thought. Something will come up in my life and all of a sudden I’m in full lecture-mode explaining myself. Well today, dear Reader, you get my soapbox on ‘financial literacy’.

I am just off of a webinar where Jay Hughes was at it once again. The most important figure in family wealth advice, Jay still somehow brings fresh new perspectives which is quite remarkable. Consider that one book alone, Family: the Compact Amongst Generations, contains at least a couple hundred wealth philosophies derived from historical cultures!

Jay stated that family wealth strategy is the key to effective ownership. Strategy is far more broad than financial literacy. Family wealth strategy, what might often be called effective stewardship, requires many skills.

In a recent article for Family Wealth Magazine, Josh Baron describes the ten competencies of an effective owner.**

Of the ten competencies, two or three broadly fit within the term “financial literacy”. Therefore, more than half of the skills of an effective family wealth steward are not financial-related.

I found myself soapboxing on this topic recently when I had heard for the second time in a week that stewardship training is about financial literacy.

Effective stewards have additional priorities! Below I have divided Josh’s competencies into three tiers, all important to a steward’s developing ownership literacy. I do not describe the competencies in any detail so if they are not obvious from the label, please do check out the article.

The Must Haves:
Personal Finance. History and Values. Communication. Negotiation.

Two of these must-haves relate to key qualitative skills. A clear understanding of your values and what actions from your family’s past have followed (or not followed) your values. These are truly a must-have for effective long term family legacies. Basic personal financial competency is also a must-have. An understanding of budgets, spending, seeing the difference between “must-haves” and “nice-to-haves” in lifestyle design and my personal favourite personal finance topic: understanding the importance of investing in yourself.

The Must Grows:
Ownership Strategy. Family Governance. Corporate Governance.

Generally speaking, healthy functioning families are going to make mistakes, we all do, and there is always room to know more and grow more. These competencies stand out to me because they require a minimum base level of knowledge but more importantly, humility and growth are critical. Applying a beginner’s mindset to these topics and seeing them as continuing growth areas within families is really the key to their role in ownership competency (and strong family cultures).

The Must Adopts:
Corporate Structure. Estate Planning. Corporate Finance.

The theme here is that these are quantitative skill sets. They are certainly helpful to have in the family but they are also professional skill sets and therefore the key to effective ownership competency as they relate to these topics is the ability of the family to “adopt” the competency. To integrate your advisors’ competencies.

Are you willing and able to ask the right questions questions of your advisors so that you can fully integrate and appreciate their advice in your family wealth strategy?

I broadly describe the relationship between these quantitative skill sets and family wealth strategy as the health of your family office ecosystem. In this case your advisor ecosystem. This is the main topic of my new newsletter!

I am very likely making this new Newsletter a paid newsletter so sign up now to be governed in free forever.

The Wealth Equation:
FW = R (HC + RC)

Applying your Resources to improving your Human Capital (your intellectual, social, emotional and spiritual personal attributes) is certainly the key perspective of this Newsletter. So, I’m excited to announce:

I have recently completed my Tamarind Learning Canada accreditation

Although I do not see myself as a classic educator, I have found great fulfillment in helping stewards with their development journeys. So now I can provide an excellent and tailored wealth stewardship and ownership literacy journey for all of you wonderful Readers (and your friends and family!) I’ll have more to say about Tamarind Learning Canada over at my new Family Office Ecosystem Newsletter.

To the journey,

Wealth’s Complexity Ends Here

Life is complicated. Managing wealth does not have to be.

I write every month regarding the Family Wealth Equation because I like anchoring my thinking on it and in the writing I set a nice anchor for myself. Some might call this something of an affirmation.

FW = R (HC + RC)

The term “family office” is meaningless

I believe resources deployment, particularly of time and money into your people and their relationships, is the key to building meaningful long-term family wealth. Family offices manage wealth. And therefore I believe family offices have an enormous responsibility in maintaining this perspective as they evolve to best serve their families through time.

An effective family office is so much more than an investment house.

Family offices are currently something of a buzz term. The significant increase in wealth, combined with our common desire to control our own capital, there are many more SFOs being created than ever before.

Most believe, like me, that there are too many of them. But the focus of these offices is relevant for everyone.

Every family determines how to spend their time and money. Once a family has sufficient financial resources, their affairs become more complicated. Regardless of the size of the wealth, wealthy families deal with a significant number of complex matters.

You know what I mean; to list these complexities would be to illicit some sort of pang of frustration out of each and every one of you wonderful readers.

So you all deal with similar matters as compared to those running SFOs.

I believe resources deployment, particularly of time and money into your people and their relationships, is the key to building meaningful long-term family wealth. Family offices manage wealth. And therefore I believe family offices have an enormous responsibility in maintaining this perspective as they evolve to best serve their families through time.

Family Office Ecosystem (“FOE”); the web of wealth

An effective family office is so much more than an investment house.

Family offices are currently something of a buzz term. The significant increase in wealth, combined with our common desire to control our own capital, there are many more SFOs being created than ever before.

Most believe, like me, that there are too many of them. But the focus of these offices is relevant for everyone.

Every family determines how to spend their time and money. Once a family has sufficient financial resources, their affairs become more complicated. Regardless of the size of the wealth, wealthy families deal with a significant number of complex matters.

You know what I mean; to list these complexities would be to illicit some sort of pang of frustration out of each and every one of you wonderful readers.

So you all deal with similar matters as compared to those running SFOs.

Ok, so we know the term “family office” is useless without modifiers (I discuss the various uses of the term “family office” here) and we know that all wealthy families have a lot of complexity to manage. My new term is “family office ecosystem” and I use it to collect the entirety of a wealthy family’s wealth strategy. All of the internal and external elements of the system.

Families wrestle with the pros and cons of insourcing and outsourcing various aspects of their wealth management. Yet even the largest of the SFOs utilize outside advisors. There is always a web between the family and the inside and outside elements. There is always an interplay between the players.

There is always an ecosystem.

Whether healthy or wanting, the interplay of the components of the ecosystem all matter. The family office ecosystem (or “FOE”) is the focus of much scrutiny these days as it is a key aspect of both the Family Enterprise Advisor designation here in Canada as well as a key aspect of the burgeoning focus on integrated wealth management.

My Second Newsletter: FO Ecosystems

The health of your family office ecosystem is the key analysis in how effective your resource deployment is, and as I mention at the outset of this month’s Newsletter, resource deployment is the key to strong family wealth.

And so with this, I have found my second newsletter perspective! I’m calling it “FO Ecosystems”. I will be launching it this month, and it will land on the second Wednesday of every month. This will be a paid Newsletter shortly so sign up now (and definitely before year’s end).

I have developed a system to effectively health check each family’s Family Office Ecosystem and given the range of topics to cover in assessing an effective Family Office Ecosystem, I will certainly have enough to cover within this second monthly newsletter.

Your Family Office Ecosystem is each family’s interplay between their resources, risks and opportunities. While I don’t have an elegant equation to reduce the topic to, I do have a very handy infographic, and I am launching this infographic into the world of wealth management for the first time in the video contained in the FO Ecosystem’s inaugural Newsletter.

If you would like to receive the FOE Newsletter, a monthly perspective on the importance of managing your resources strategically, you can sign up here.

Entrepreneurial Spirit – A Family Affair

Entrepreneurial Spirit – A Family Affair

We are back at the beginning of the school year – the real start to the year!

If you’ve been here awhile, reading and thinking along with me, I’m thrilled to still have you – and if you’re new, welcome! We’re here to explore the nuances of family wealth and perspectives on how to contribute to meaningful family legacies.

Last month, we delved into the role of entrepreneurship in family cultures and a recurring question popped up: “What about the family members who aren’t entrepreneurs?” I realized that my main point might have been missed. So, let’s set the record straight!

The essence of my mission statement is “empowering families to thrive for generations.” Entrepreneurship is a part of that, but not in the way you might think. It’s not about pushing every family member to start a business; it’s about fostering an entrepreneurial mindset that benefits everyone in the family, entrepreneur or not.

The Entrepreneurial Mindset: A Family Asset

Entrepreneurialism isn’t just about starting a venture; it’s a way of thinking, a way of living. It’s about resilience, adaptability, and a never-give-up attitude. It’s about a lot of things frankly, I’m still sharpening up my list.* It’s also about team-building, service to others, leadership, addressing fears and learning from failures.

These qualities are not exclusive to business; they are life skills. When a family adopts an entrepreneurial mindset, it creates a culture of problem-solving, risk-taking, and continuous learning. This culture is the bedrock upon which both entrepreneurs and non-entrepreneurs in the family can build their lives.

The Non-Entrepreneur’s Role in an Entrepreneurial Family

Non-entrepreneurs play a crucial role in an entrepreneurial family. They can be the supporters, the advisors, and most importantly they provide very effective diversity of opinion. They bring diverse skills and perspectives that enrich the family’s collective wisdom. In an entrepreneurial family, non-entrepreneurs equally learn to appreciate the value of hard work, the importance of calculated risks, and the beauty of failure as a stepping stone to success.

The Generational Impact

When you instill an entrepreneurial mindset in your family, you’re not just setting up your children for success; you’re setting up your grandchildren, and their children, and so on. You’re creating a legacy of thinkers, doers, and dreamers. Whether they become entrepreneurs, artists, scientists, or anything else, they will approach life with a mindset that turns challenges into opportunities and chase fulfilling lives.

The Fulfillment Factor: Individual Success in a Collective Culture

In an entrepreneurial family, the concept of contribution takes on a broader, more enriching meaning. It’s not just about financial gains or business milestones; it’s about individual fulfillment. When each family member is empowered to contribute in their unique way, they find a sense of purpose and satisfaction that money can’t buy. This leads to a family culture where fulfillment is the currency, and everyone is wealthy. A family full of people feeling fulfilled, however they individually define their success, creates the most nourishing of cultures. It’s a culture where everyone thrives, and that, in turn, strengthens the family legacy for generations to come.

Final Thoughts

So, to circle back to the question: “What about the family members who aren’t entrepreneurs?” My answer is, they are as much a part of this journey as anyone else. Entrepreneurship as a component of your family culture is the secret sauce that keeps your family legacy alive and well for generations to come, for everyone involved.

Sharpening our perspectives

Sharpening our perspectives

Here we are again 🙂

Here to learn together about family wealth. I love writing as it helps me express important perspectives. I hope you are also learning. If you want to really lean in, please tell me what is on your mind! I will reply with an email, possibly a Loom video, maybe even a blog topic!

In the post-script, I will be summarizing the opening 18 issues of FO Perspective. A helpful resource if you want to revisit any of the prior topics. It dawned on me when summarizing the prior issues that perhaps my favourite topic regarding generational wealth has not been a blog topic yet!

I find this topic so critical that it is the central perspective within my personal mission statement! I first developed this mission statement to help filter the opportunities presented during my post tax-law career. That first mission statement was “empowering families to thrive for generations”.

I was recently improving my mission statement upon the advice of a mission-driven steward, and the result is:

I empower, connect and delight fellow wealth stewards who agree that entrepreneurialism is the key to meaningful family legacies.

Not every family member could or should build businesses from scratch, sure, but families that develop each steward’s interest in behaving like entrepreneurs are my inspiration. It is my key to meaningful family legacies.

Entrepreneurship is not just about starting a business and making money. If so, it would not be the key. Entrepreneurship is a mindset. Mindsets that can produce effective cultures. Entrepreneurship is about seeing opportunities where others see obstacles. It’s about taking risks, embracing failure, and never, ever giving up (unless of course failing fast is the better option!).

And I believe that the above qualities can develop an enduring family legacy for generations.

Fostering entrepreneurial spirit

The world is changing at an unprecedented pace, yet our world has always been changing rapidly. Financial capital and family businesses that were built up over decades can easily dissipate in a few years, sometimes through no fault of the family. Yet the family legacy can endure far longer than the peak of the family’s financial power.

By fostering an entrepreneurial spirit within your family, you are equipping your family members with the skills and mindset they need to navigate this ever-changing world. You’re teaching them to be resilient, adaptable, and forward-thinking. You’re encouraging them to take ownership of their future and make their own mark on the family. Entrepreneurs love and identify talent, which can only serve to improve the quality of the family’s ecosystem over time. Entrepreneurs understand how people have value in many different ways in building a business, and this understanding translates effectively over time to a family culture that fosters tolerance and diversity of it’s family members.

Adding to the family story

Family governance experts often speak to the importance of clarifying the family’s mission, vision and values. Entrepreneurs actualize that focus. Every entrepreneurial venture should be a reflection of the entrepreneur’s values, passions, and vision. So, when a family member starts a business, they’re not just contributing to the family’s financial capital (or contributing to the family’s human capital if the venture fails!), they are also actualizing the family’s story, identity, and legacy.

The family shadow. One of the hardest topics to tackle in family governance. Typically, the wealth creator is so talented, so unique, that the generations that follow cannot help but compare themselves and fall short.

The shadow looms greatly.

There is no single universal statement more commonly uttered by a successful entrepreneur than this: wealth creators wish their journey (not their success) could happen for all of their family members. They had a remarkable journey, a fulfilling ride. Yet wealth creators often struggle to beget entrepreneurs.

A wealth creator may struggle to figure out how to support their heirs because starting on third base is very different than their journey, but every wealth creator I’ve met wishes a similarly fulfilling ride for their children and grandchildren.

How to circle this square?

Celebrate their successes and failures

Encourage your children to start their own ventures. Celebrate their successes, and more importantly, their failures. Really go after those failures and ideally have family rituals that can be revisited in those times of failure so that the failures live together within the family legacy script.

Role model that business-building is about so much more than making money, it is about making an impact in a way that you know the world needs, than your family is getting far far ahead.

Describe the lows; far more important than the highs. Your family needs to hear about how the success included ample amounts of luck and difficult times. They need to know how you bounced back.

Entrepreneurship is not just starting businesses; it as a way of life. And my mission is to empower, delight and connect fellow heirs that also see entrepreneurship as the secret sauce that keeps your family legacy alive and well for generations to come.