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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?