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FO Perspective

The Good Fortune of Mentorship

In this month’s edition of FO Perspective, I’m glowing in the good fortune of mentorship.

The Wealth Equation attempts to simplify to merely 11 characters the critical idea that your family wealth increases when your resources are applied to growing stronger family members and family culture.

The Wealth Equation: FW = R (HC + RC)

HC – Human Capital

Of the ways I’ve worked on becoming a better person, be it coaching, learning (usually from podcasting and online videos), finding new challenges, etc. my greatest growth is due to great mentors in my life.

With the one year anniversary of Dennis’ passing on October 30th, and recently travelling to Aspen, Colorado to take my menteeship with James E. Hughes to the next level, I’m thinking a lot about mentorship these days.

RC – Relational Capital

Harnessing a close relationship into an effective mentorship relationship is fulfilling for both mentor and mentee. We enrich our lives greatly by finding the time to mentor and be mentored.

Mentorship is a critical skill in being an effective Elder. As the highest wisdom-holder within a family enterprise, but without the control, it is an Elder’s influence that defines her agency. The influence is the action and certainly there has been no greater influence in my life than my mentors.

R – Resources

One aspect of mentorship that I’m fascinated by, because I think understanding incentives is paramount in building strong family office ecosystems, is that mentors are (in my opinion) unpaid.

I don’t think you can pay for effective mentorship. That looks more like teaching or coaching to me – also valuable relationships for sure. But the resource to monitor expensing in mentorship is time, not money!

Time is our greatest resource.

How can we spend our time effectively as mentors and mentees?

Here are my favourite tips from perusing the internet for good advice on mentorship:

Practical:

  • Frame the time. The mentee should have an agenda.
  • Come prepared. The agenda should be delivered prior to meeting.
  • Get to know each other. The agenda should always include time for getting to understand each other’s worlds.
  • Use effective and increasingly curious questions to gain understanding of each other.

Emotional:

  • Be genuine and direct.
  • Be teachable / look to deliver advice in a teachable manner.
  • Look to the future and action plan; mentorship is not therapy.

Accountability:

  • Goal set effectively and complete accountability check ins.
  • Follow through on the last session’s actions.

Dennis did far more for me than mentor. I saw how he acted constantly. I saw him invest in people every day. I saw him remain calm in adversity. I witnessed his high level of trust, which was was truly unparalleled and resulted in events to his detriment often.

But he always maintained that his trust in people was still worthwhile even though it occasionally burned him.

Dennis was far more than a mentor; he was also a role model.

Geez, I’m “spoiled ripe” in so many ways, and in ways that spoiled rotten people could never imagine.

To the journey,

Adam

post-script, a paragraph of a poem by Douglas Malloch:

Good timber does not grow with ease:
The stronger wind, the stronger trees;
The further sky, the greater length;
The more the storm, the more the strength.
By sun and cold, by rain and snow,
In trees and men good timbers grow.

Read the whole poem here.

With Great Power Comes Great Responsibility

In this month’s edition of FO Perspective, I’m hopeful you can help me answer for myself the question: what are the issues and opportunities facing families and how can I help with them?

We won’t use the Wealth Equation this month. Although I’m sure I could find a way to describe myself as a resource to amplify a family’s human and relational capital pools 🙂

The Wealth Equation: FW = R (HC + RC)

In 2017 I realized I wanted to help families harness the power of their wealth to build stronger family cultures. In June 2019, that journey led me to working with Max and building Vesta Wealth Partners together. Now, because it is time for Vesta to transition leadership, given Max and I believe deeply in leading fulfilling lives, the time has come for Max to succeed myself with Max in the role of CEO.

The platform is in a strong position and Max is ready to be the CEO after his significant support for the business as owner, director and investment management teammate.

Max and Jared’s vision was that families like the Fortmullers deserved institutional-quality portfolio construction. Much like our investment strategies, we sought out to build a diversified business in delivering on this vision.

It has been quite the journey! Lots of stories, lots of growth, incredible learning. It has been a great success.

Not-so-humble brag: I’ve loved acting as a fiduciary for the Fortmullers, in my case my fiduciary role came in management of their business and single family office (“SFO”). The opportunity to integrate directly into the Fortmullers’ journey is something I’m very grateful for.

It has been a remarkable way to launch my journey in family governance to a whole new level, and with the growth mindset I have and desire to make an impact, now is the time to find new ways to empower entrepreneurial families to thrive.

So this update reaches you at an interesting crossroads for me. I’m actively searching for the right problems to solve and the biggest opportunities in family governance to make an impact. Here is my question:

  • What are the biggest problems (and therefore best opportunities) to help families harness the naturally destructive nature of money on human fulfillment and family culture?

I’m all ears, I have some ideas, and you are receiving this update as a dear friend that I’m certain has unique ideas of your own for me in supporting this mission. Thanks in advance for your comments.

Abundance Mindset Applied to Stewardship

In this month’s edition of FO Perspective, we ask “what is the form of good stewardship”?

Stewardship. What a popular word in family governance circles. Important? Absolutely. But the Wealth Equation reveals an important take on the “stewardship” definition. Hopefully you agree, dear reader, that my definition tweak is for the better!

The Wealth Equation: FW = R (HC + RC)

Your family wealth is equal to your resources multiplied by the sum of your human capital (quality of people) and relational capital (quality of relationships).

R

Stewardship is most commonly thought of as the efforts towards protecting the family’s financial capital. Stewarding the wealth through generations requires a keen eye on effective uses of financial capital.

But as stewards I believe we become a little too focused on losing the money. It’s a very common fear. Wealth preservation cannot be the only goal with the capital.

Perhaps this perspective comes from the wealth creators, who saw the luck and effort first-hand required to amass the wealth. Perhaps this perspective comes from the wealth heirs, who see the money as culturally success-defining for their lives. And so long as more wealth exists when they die than when they inherited, they were deemed “successful”.

Both of these fears arise from a misunderstanding of money as a resource.

Given that meaningful family legacies arise from growing your people and strengthening their culture, the money might blissfully float unrisked through the generations and, sure, financial stewardship succeeds.

But often that use of financial capital will fail the family wealth and impair meaningful family legacy.

Stewardship includes stewarding forward what the family stands for. And I hope each and every family with a champion reading this (like yourselves!) knows exactly what your family stands for and how to steward those goals aligned with those values and principles.

HC

Arriving at a healthy relationship with the wealth and understanding the power of effective stewardship is a journey for every individual in the family. Certainly, the more family members that take the time to consider their fears around wealth, fear-set those, and arrive at an upgraded definition of stewardship will be increasing the family’s Human Capital.

RC

Communal pressures around wealth preservation are tricky. Those principles are valuable and certainly the opposite view, a frivolous view of the wealth, is much more destructive for the family. So the family culture has to apply some value to wealth preservation.

But in considering the stewardship of wealth, I believe family cultures should develop an abundance mindset. Combining a discipline of financial preservation with a scarcity mindset leads to overly fearful deployment of capital.

It should be entirely ok for family cultures to deploy capital into their people and their relationships and into investments that may lose capital if there are valuable other goals achieved. For example, with both success or failure of an entrepreneurial venture, risking the capital and unearthing valuable lessons from the failures should be supported by the family.

There should be a celebration of those lessons and a healthy relationship developed around failures in any family culture. No pariahs.

Conclusion

Regardless of the choices we make, outside forces could make the money disappear at any moment.

And what is left after the money is gone (or you pass away) is the relationships and the culture that can breed the kind of people that you are proud of. People capable of rebuilding wealth if need be. People you are proud to call family.

Because after all, time is our greatest resource and spending it wisely is far more valuable to your family than prudent investing.

Sometimes Focusing on You is Best for Others Too

In last month’s FO Perspective, we looked at culture as the most effective influence on success or failure of family legacies. I alluded to the other key driver of success and for those with the ol’ growth mindset, the answer is obviously personal development! Thank you for reading on Canada Day!

As individuals get stronger they act more in alignment with their goals, and discover clearer and more relevant goals as well.

I believe well-meaning, growing, caring family members cannot help but become better contributors to family goals, although sometimes managing individual and family goals can create quite the interesting set of trade-offs and conflicts!

I’m in Invermere right now with cousins from the States that I haven’t seen in ages (and all of our kids are creating quite the mayhem), it is Alex and my 12-year wedding anniversary, and my goal of writing about family governance monthly is at stake! So I’m fortunate to lean heavily on a LinkedIn Post, I note that the best place to start is personal development when worried about the future impact of the family wealth on the family.

That article has a great School of Life video embedded. Maslow’s hierarchy of needs is often represented as a pyramid because it gives a relatable image to the idea that the bottom levels of the pyramid are more very critical and often the greater focus of people. Basic human needs and safety and security should never be taken for granted.

Except wealth clearly distorts this focus.

There are very few heirs that can find fulfillment in creating a life where they have their basic human needs served. That would feel more like giving up, wouldn’t it? Maybe I’m being harsh.

No I’m really not being harsh, a focus on the bottom of the pyramid is definitely not taking advantage of the incredible opportunity that our good privilege provides to make a big impact and find big fulfillment.

Because privilege ensures that our pyramid does not work the traditional way, quite a lot of time and resources should rightfully go into the top needs; seeking self-actualization and striving for transcendence.

How can the wealth equation frame our understanding of the importance of personal development in the context of meaningful family legacies?

FW = R (HC + RC) 

Your family wealth is equal to your resources multiplied by the total of your human and relational capital pools.

R: Spend resources on personal development, it is as simple as that. Both time and money can be extremely effectively deployed into improving oneself. Please reach out if you aren’t sure where to start with topics like coaching, peer mentorship, conferences, mental models, seeking mastery, culture mining.

HC + RC: Growing your human capital clearly a key to this wealth equation, but I find it amazing how regularly I forget that we are all just humans in our relationships and even the best sides of all of us are going to run into mistakes in the context of decades-long relationships. We have to be kind to our family members, because we have to build up our relational capital for those downturns when we have to spend a little of that goodwill and trust we have built up in the only way that caring families really understand.

FW: leading more fulfilling lives (while maintaining a commitment to the family’s values) is the most autonomous way to contribute to the family legacy.

What is Family Governance?

Complex words and well-paid professionals often impede progress. So an early issue of Family Office Perspective has to address the incredible consulting field of Family Governance that covers most of my favourite topics, but is also often a little too complex. This consulting field delivers value to families similarly to how management consultants advise businesses.

Let me know when I’m being complex because I’m here to empower!

Governance is certainly a complex topic. A lot of time and attention goes into this field with good reason. Governance is ultimately about how thoughts and conversations create decisions that beget actions. Governance is too often prescribed through lawyer’s eyes though. They focus on establishing policies and procedures that clarify the rules that govern a family’s affairs. Those rules establish parameters delineating good decisions from bad. This is effective governance because it improves the probability of good decisions and from those good decisions, effective actions follow.

Come on, we cannot let the lawyers deliver the most valuable forms of governance!

No way!

Certainly, a strong family constitution and well thought out policies and procedures have a very strong impact on family activity and yes, they are helpful governance tools. However, I’ve known since the very beginning of my journey into the family governance field that there is a lot more to effective families than rules. The real family governance is derived from family culture. I learned this from James E. Hughes whom I mention regularly.

But I also learned this from my own observations. The most successful families I know seem to innately understand what they stand for and are great at celebrating behaviours that fit within their core values. Neither “innate understanding” nor “celebration” would fit within a lawyer’s rules:

Lawyer: “now to New Business topic #5, the Article 6.3 infraction. You can clearly see in the Article that we expect family members to celebrate each other’s successes. So Adam, your failure to attend Shoshana’s Bar Mitzvah results in a penalty as selected by the Celebratory Review Panel at the next meeting that they are able to reach Quorum according to Article 14.4 where the Panel will select your penalty from those listed in Column B of Schedule 1.”

Adam: “I texted my cousin my congratulations, and we FaceTimed the next week, I think we are good.”

Lawyer: “sorry, the rules are very clear.”

Peter Drucker famously said that “culture eats strategy for breakfast.” Strategy is clearly important to business success, and yes I concede that rules are important to family success.

But culture is far more powerful and important.

So since family governance is about how families take effective action, then clearly the high-achiever families are likely the families filled with love, mutual interest in each other’s success, strong listening and communicating abilities (especially important: strong storytelling) or generally speaking, have strong cultures. Those lucky families will be able to influence individual and collective behaviour really effectively. They will have strong governance even if they don’t have written rules.

While there is no way to achieve family harmony, and there is very little chance that every single family member will align on core values, there is at least a strong chance that families can develop a caring family culture. We can all be inspired to support the growth of our family members and we can all create an environment where healthy actions outweigh destructive ones. These are the families that will thrive for generations whether or not they happen to maintain and grow their financial assets.

So I believe one of the two keys to family governance is family culture, the next key is the topic of next month’s Newsletter.

For those looking for a little more on this perspective, a quick reminder on how the wealth equation relates to this topic. The equation is:

FW = R (HC + RC) 

Your family wealth is equal to your resources multiplied by the total of your human and relational capital pools.

FW: Invest time and financial resources on family governance. Applying financial resources to facilitators will greatly assist in effective family meetings (and informal get-togethers).

R: Spend resources on traditional governance topics like family constitutions and other policies and procedures. But the best use of resources is spending time and intention on building strong individual family members with strong relationships.

HC + RC: Both the individual and the collective grow more valuable with a strong culture supporting them.

Turning Privilege into Growth

This newsletter is titled Family Office Perspective as I hope to deliver valuable ideas from the family office and family governance worlds for all families fortunate enough to have champions like you, dear reader, to receive them.

I started a series on CanadianFamilyOffices.com about my favourite governance tool (besides storytelling) called the Family Bank, check it out!

The wealth equation is my main perspective, the main chord progression so to speak, and these newsletters are all different riffs. So, the wealth equation:

FAMILY WEALTH = FA (HC + RC)

Because the equation is multiplication, there is a clear relationship between deploying resources into your people and relationships and the ability to amplify wealth.

I’m often asked for examples of investing resources into people and relationships. While I often cite investing in more impactful family vacations, adding things like family meetings, videography, and rituals to the traditional luxury and comfort we all love about vacations, it occurred to me recently that another word, not “vacation”, is more appropriate for families when determining ways to make their limited time together more valuable.

The word of the day is: pilgrimage.

However you define your tribe; a pilgrimage is one of the strongest examples in history of effective human development.

I last experienced a pilgrimage following the steps through the Andes and entering through the Sun Gate to Machu Pichu; an ancient pilgrimage.

My regulatory and compliance lawyer Don Campbell recently made the pilgrimage to Omaha, Nebraska. A journey common to those drawn to the Oracle of Omaha. If the term can apply to an investment firm’s AGM, it can certainly apply how your family intends to use it!

I recommend shedding past uses of the term and focus on how you would define a family pilgrimage. Adopt an important term.

FINANCIAL ASSETS

So how does a family invest in a pilgrimage. What are the components?

I have reduced my definition of a family pilgrimage to three components. They are: the journey, unplugging and time. A pilgrimage should include movement within an atypical space, a unique space, hopefully an awe-inspiring space. This creates a natural environment to enjoy new perspectives and thoughts.

In line with designing a unique journey that is unique and requires time and effort, the journey should occur unplugged from your smartphone and regular life. Again, to create a unique and quiet space.

Finally, a family pilgrimage should include family time. The time together, particularly without outside influences in unique space, will no doubt create situations where the people you know best will be different, where everyone will get to think and speak. Family time is always valuable (it is why I love family meetings) and spending time together on a pilgrimage will be uniquely valuable. Perhaps it will become an annual or biannual family ritual!

HUMAN CAPITAL

Pilgrimages 

Pilgrimages are often individual pursuits, in fact some definitions require that they are individual in nature. Although I’m recommending a family pilgrimage, perhaps there are sections journeyed alone. There is something so rewarding and healthy about spending quiet time with yourself. Whether your thoughts are abstract, the mind is quiet, or you explore questions really important to you at that time, any which result is valuable to improving your relationship with yourself.

Although I do not journal, I’ve read that one of the benefits of journaling is similar; organizing your thinking as a form of healing and meditation.

RELATIONAL CAPITAL

These key principles and the overarching ability to live intentionally and adapt. These are the ways to survive for generations.

There’s something so valuable about rituals, ways that groups remind themselves about what they stand for and care about. Clearly rituals like pilgrimages are valuable: I’ll spend a future newsletter on this 🙂

However you define your tribe; a pilgrimage is one of the strongest examples in history of effective culture building.

Long-term Impact is Family Legacy

My mission is to empower entrepreneurial families to thrive for generations. The wealth equation is the best tool we’ve got at FO Perspective to show the important perspective that all capital pools (financial, human and relational) matter for building family wealth.

The key question “so what is all this money good for?” is unique for every family. Yet long-term impact is always a part of the answer.

Family legacy is another way that I describe long-term impact.

FAMILY WEALTH = FA(HC + RC)

FINANCIAL ASSETS

And yet Webster’s #1 definition of legacy has little to do with the factors of the above wealth equation.

The definition of “legacy” is:

  1. A gift by will especially of money or other personal property.
  2. Something transmitted by or received from an ancestor or predecessor or from the past.
  3. A candidate for membership in an organization.

So one of my long-term goals is to influence the term “legacy” at Webster’s and overcome the insurance and wealth industries for the family focused definition.

The second definition is much closer to the more important meaning. Legacy is so much more than financial gifts and is really about family culture.

HUMAN CAPITAL

Helpful perspective: family legacy ends up being the behaviours and outcomes of your family members that come after you.

What is the mark they are making on the world? In making their impact, are your future kin using and adapting enduring family values to make an impact?

RELATIONAL CAPITAL

This, to me, is the most beautiful and tangible aspect of family legacies.

It is an ongoing culture of a family that can grow beyond two generations and into what James Hughes calls a tribe.

Seth Godin describes a tribe as “people like us do things like this”.

For you, dear reader, what aspects of family culture, the expressed values long-term through time of family members, have you seen that bound families  together through three generations?

Please reply and tell me your rituals! Those rituals and actions are there for the taking and when you see families that thrive for generations,  you always find strong family cultures with great rituals.

That, dear reader, is what I call legacy. Thanks for reading.

Well-being. A simple balancing act ;)

Most of you, dear readers, would be better than me at explaining the benefits of physical, spiritual, intellectual, emotional and social well-being. Yet wherever you are now at improving your well-being, you probably recognize that it is an important aspect of your wealth!

Now, Issue 3 introduces the other key goal, in my opinion, of family wealth: well-being.

So as I write this month’s Newsletter actively trying to figure out how to balance my personal well-being within the context of my obligation-heavy life, onto the wealth equation:

Family Wealth = Financial Assets (Human and Relational Capitals)

If you don’t take care of yourself, you show up as a weaker family participant and the family wealth suffers.

A big part of improving well-being in my life (and consulting) is simply setting the intention; family members setting out their goals that align with their family values and then going about the hard work of achieving them (and when not achieving them, learning from that!)

Having physical, intellectual, spiritual, emotional and even social goals are important to checking in on well-being. One particularly well researched scorecard of well-being is called “PERMA”, a system developed within the field of positive psychology.

I’ve enjoyed being on PositivePsychology.com’s newsletter. They introduce the field of positive psychology here and the PERMA scorecard here.

I developed my own Balanced Scorecard; an individual’s personal development check-in tool. Email me for a copy.

FA

Financial assets are a pretty remarkable resource when deployed into supporting well-being. Examples abound:

The best physical and social resources are not online in my opinion so no links! Although I’m actively looking for social forums for wealthy families that are actually helpful, like Farnum Street’s Learning Community has been helpful for me on understanding mental models.

Storytime! Of all the dumb-teenager decisions I made, I got really lucky with one of the best decisions I ever made; hiring a therapist from my allowance money. I was struggling with my identity post hockey career and had recently been cut from two hockey teams in a month to put the final nail in the hockey career coffin.

Although it certainly would have been healthier to talk to my parents and seek support together, it worked out well, and I’m very grateful to have been trusted enough by my parents to have my own bank account. As I reflect on ways that I’m fortunate and my, and my family’s good fortune, has positively impacted my well-being, that story stands out as an important one.

HC

Recently I celebrated my 40th birthday with a conference for my closest friends at the Banff Centre. 

Tim Tamashiro ran us through a workshop on Ikigai, a Japanese philosophy guiding obtainment of a fulfilling life. It was fantastic. His Tedx Talk is here.

Although I am certainly no high achiever in developing my well-being, I’ve definitely improved over time. I believe the focus on being better is just as important as how strong your overall personal development is. I believe Dweck’s growth mindset sets this out well, as does James Altucher’s 1% better. It is the little improvements that make a big difference with time.

RC

The key to family governance is the quality of the people in the family. Tough fact to admit for us advisors. It all comes down to the people.

Relational capital in one sense is the combined efforts of all the individuals. So when I’m asked what the key to effective family governance is, it is not the policies and procedures, experience, mission/vision/values that I cite. No! The key to effective family governance is having great people in the room together that care about each other.

Is money helping or hurting your impact?

Thank you for spending your time with me! FO Perspective is written for those that care deeply about us fortunate families and empowering unique answers to the tricky question “so what is all this money good for?”

FW = FA (HC + RC)

Your family wealth is equal to your financial assets multiplied by the sum of your human capital and relational capital.

A family with all the money in the world but terrible people and an inability to relate to each other and live by common values and principles? That family has no wealth in my books. A family with low wealth but is committed to growing individually and as a collective? Now that family is wealthy! To explore this equation further please check out Issue 1.

Now is as good a time as any to point out that this is definitely “lawyer math” and not, well, actual math. There’s no formula for family success. There are only helpful perspectives for influencing your efforts as family champions.

This equation anchors my key perspective that resource deployment amongst your capital pools is critical to long term family wealth. All capital pools are important and how all three capital pools (FA, HC and RC) relate to that month’s theme will be highlighted in each Newsletter.

FW: family wealth is about impact

One answer to the question “so what is all this money good for” is that the money provides for future generations. Money is good for food, shelter and security but also, ideally, opportunity.

An opportunity to make an impact.

Those future generations had better be valuable to the world, I often think. Actually most of the time I’m aiming lower in my expectations for future generations; those future generations had better be grateful for their good fortune.

But actually gratitude doesn’t cut it for me. No, coming from privilege bears a responsibility. I expect future stewards to:

  • know they are privileged;
  • know the world is not fair;
  • appreciate the unfair opportunity afforded to them; so as to
  • maximize fulfillment, reduce fears and anxieties around stewardship, and go make a big impact on their world.

Impact

Impact is a great way to measure the usefulness of family wealth over the long term.

FA: will financial assets help or hurt impact?

Far too often, financial assets lead to a little too much comfort and luxury and not enough fulfillment. On the other hand, money deployed into opportunities to learn and grow are investments in long term impact. Are resources being deployed effectively to capture more time and deploy your most valuable resource (time) more efficiently into impact opportunities?

HC: human capital is often influenced by family work scripts 

Fear of the unknown is a common impediment to fulfillment.

But there is another factor I often highlight for families; family work scripts. This short video and blog describes the concept effectively; subtle cultural references abound as to “good” and “bad” work decisions.

We are often only vaguely aware of the impact our family culture and ‘work scripts’ have on our views of productivity and worth. Which directly impacts our pursuits. Be aware of influences over your own definition of fulfillment.

Find your unique ways to make an impact.

RC: relational capital needs a broad perspective on impact and high standard of impact

If family ‘work scripts’ have such a big impact, let’s build cultures that can challenge norms and embrace unique development paths while we as families continue to honour the beaten down, reliable, work paths that are usually very valuable and therefore oft-recommended (such as family business participation).

Families could perhaps create new rituals to celebrate unique development paths to celebrate such boldness. Perhaps come up with your own family nickname for times when you follow traditional family paths (I followed my family into law (Grandmother) and entrepreneurship (both Grandfathers) and knew early-on that my stone-hands were ill-suited for following Dad into orthodontics!) I (in jest) call the pursuit of law “Jewish grandmother guilt” but I’m sure your family can come up with something catchier than that!

Taking the time (and money) required to maximize opportunities for impact is this month’s FO Perspective topic for responsible, committed family members. After all, if money is not good for maximizing fulfillment and making a big impact on the world, then what is it good for?

What is all this money actually good for?

Welcome to the FIRST edition of FO Perspective. Written especially for those that care deeply about all those fortunate families that should find their unique answer to the tricky question “So what is all this money good for?”

FW = FA (HC + RC)

No one likes reading about math. But I need to start with an equation as it frames the purpose of this newsletter. I discovered the consulting field of family governance through James E. Hughes. Which was very lucky – he’s the best in the business.

He uses a wealth equation to convey the importance of all aspects of what is important to a family. As many wealthy families tend to put too much weight into investment strategy, and because what you put your mind to tends to be your focus, families as a result put too little emphasis on the quality of their people and relationships.

So, his wealth equation:

FW = FA + HC + RC

Meaning your family wealth (FW) is equal to the sum of your financial assets (FA) plus your human capital (HC) plus your relational capital (RC).

I love the equation. In general, I like developing ways to effectively deliver important messages. I’ll try to do it often in this newsletter.

I like the message that properly valuing the growth of your people and their ability to relate to each other is as important as your assets. Developing strong wealth stewards is the most important thing since, well, what’s more important than people? Of course, strong relationships are oh so critical since we know that families, including wealthy families, must be strong. We all know family conflict.

So, your wealth is more than your money. That’s a key insight that most people say “duh” when I say it, but to be honest they still don’t align their actions with their intentions around the learning. They don’t change and they continue to overemphasize investment strategy and asset stewardship.

Here’s my spin on the equation. There’s a second lesson available with a slight change to the equation.

I believe money has the power to amplify pretty well any task or goal. It amplifies for good and for bad. Money can amplify good people into great people and bad relationships into terrible ones. Money is the gas on any fire.

My goal is to use that gas to fire up growth mindsets and family cultures. So, my family equation:

FW = FA ( HC + RC )

Your family wealth is equal to your financial assets multiplied by the sum of your human capital and relational capital. A family with all the money in the world but terrible people and an inability to relate to each other and live by common values and principles? That family has no wealth in my books. A family with low wealth but is committed to growing individually and as a collective? Now that family is wealthy!

This newsletter is an ongoing exploration of those four factors in the wealth equation through my lense as the President of a single family office (“SFO”) and the President of a wealth management firm. Our firm has a unique perspective within the industry as an Outsourced-Chief Investment Officer to a select few families (similar to how many multi-family offices (“MFO”) operate), and as an investment fund manager delivering alternative funds to the greater Canadian investment community. My timing is strong as the industry works through the increasing service expectations of UHNW families, and family offices and wealth management business models continue to adapt to UHNW family needs.

This newsletter is ultimately about the key consulting delivered to UHNW families by family governance experts. Many of the topics explored will come from the family governance perspective. A great example of the cross-section of topics covered by family governance is displayed in the Wealth of Wisdom book and podcast co-written by a fantastic family office leader in Canada, Tom McCullough.

I have the time and interest to distill the family governance industry’s views into this newsletter so you, heroic reader, get quick impactful thoughts that will shape your perspective on wealth stewardship.

In that sense I consider myself a “Sherpa” to the “Gurus” of family governance. I’d like to acknowledge the cultural appropriation I’m doing with those terms but to be honest in my life I’ve seen no better example of individuals empowering the lives of others than guides empowering hikers. I strive to make your climb up the family governance mountain your own journey, but empowered by my experience and interest in supporting you.

So, to review, the topics covered each month will be family wealth (I sometimes call “legacy”), financial assets, personal development and family culture.

FA: Money topics presented in a readily consumable manner and delivered by a non-finance professional

HC: Personal development is the key to effective family governance. Stronger people make stronger families.

RC: Culture eats strategy for breakfast. Family governance lessons on relationships between Elders, Rising Generations, burgeoning stewards and every relationship in between.

FW: What is all this money good for? Your family wealth is so much more than creating safety, security and luxury. It is a resource that can amplify strong families into 100-year families.