Hello Friends,
Let’s spend ten minutes together on family wealth. Sharpening our perspective on how to deploy our resources for better impact, wellbeing and flourishing for the people that we care most about.
Family Wealth = Resources (Human Capital + Relational Capital)
In my new role as CEO at Pinnacle, I see my most important role as empowering my teammates’ trusted advisor actions with our clients. Our 70+ Dealing Representatives typically have well over 200 clients each, so they only have time for the clients that take their wealth success seriously.
Like all professionals, we help those the best that want to help themselves
But you don’t know what you don’t know. So given that I have begun to think deeply about applying the wisdom of the giants of the family wealth industry to everyday Canadians, I wanted to start with the recent and seminal description of the Ten Domains of Wealth by the Ultra High-Net Worth Institute.
Surely, if the top ten topics of wealth for the UHNW community could apply, I was on the right track.
These top ten topics are the starting point for people that want to examine the key areas to address in their family wealth strategy. Strategy maps the tactics required to align goals with outcomes.
As you read these ten tactic topics ask yourself, do I feel like I’m making progress on this topic? Is it a gap in my knowledge, attention and approach?
The Ten Domains
1) Growing your money
Yes, wealth management’s historical focus is still critical. It’s not the be all end all though. Wealth goal setting. Financial budgeting. Improving your ability to make smart financial and investment decisions. These are critical skills to build and sustain financial resources. There is no doubt that financial stability is the most important goal we all have.
10 Domains Name: Financial and Investment Management
2) Planning the last phase of life
Being remembered favourably by your loved ones is real legacy, not a brick with your name on it or a pot of money. But legacy overlaps personal and wealth goals. Estate planning and in general planning out your aging process is a critical domain. The benefit of facing your fears and addressing this topic? It brings enormous peace of mind and improved quality of life when handled effectively.
10 Domains Name: Estate Planning and Legal Issues
3) Protecting what you have
Managing risk requires effective collaboration of the legal, financial and insurance professional fields and a clear family goal set that downside risk protection is worth investing resources (time and money) into.
10 Domains Name: Risk Management
4) Making an impact
How you give back matters and finding your unique way to make a difference generally-speaking happens with charitable giving, supporting causes with your time, or finding ways to invest in your community.
10 Domains Name: Social Impact and Philanthropy
5) Setting Family Rules
Wealth is sometimes an important opportunity (a family investment or a cottage for example) for creating structures, rules and/or guidelines to help your family work well together and create safe space when conflicts arise.
10 Domains Name: Governance and Decision-Making
6) Taking Care of Yourself
Yes, your physical, mental, and emotional health is critical within wealth management and has the key byproduct of improving your family and business relations by showing up at your best. Designing your income and wealth strategy by properly prioritizing your health takes courage.
10 Domains Name: Health and Well-Being
7) Family Relationships
Family dynamics are tricky and wealth plays a big role in how family members communicate and relate. This topic always comes up informally with advisors and during times of conflict but should be attended to intentionally and proactively.
10 Domains Name: Family Dynamics
8) Leadership
Leading wealth requires building a great outside team as well as building your own skills up. Just when you feel well-prepared the biggest task arises: leadership transition. Timing the family wealth leadership transition well has a big impact on the wealth. We all know of stories of transitions too late in life or poorly designed transitions to ill prepared future leaders. The enormous downside risks here can all be easily mitigated.
10 Domains Name: Leadership and Transition Planning
9) Learning and Growing
Family members must build skills, gain knowledge, and prepare for the future. Regardless of your level of wealth there is no greater learning to gift kids than financial literacy. Although ultimately the goal should be ownership literacy.
10 Domains Name: Learning, Development and the Rising Generation
10) Working with Trusted Advisors
And we end with the biggie: build strong, effective partnerships with the people who help you manage your wealth. Balance your own leadership with assigning total or partial leadership responsibilities to one of the advisors on the team.
10 Domains Name: Family Advisory Relationships
Conclusion: the Family Wealth Equation | Family Wealth Perspectives
FW = R (HC + RC). I’ve used this equation for the entire 3 years of this blog. It’s still the most important perspective. If there were only one domain to address in family wealth the whole equation would be this: Family Wealth = Financial Resources.
Given my focus is now towards the Pinnacle community, I think it is time to change something that has been bothering me for awhile. This blog should be called Family Wealth Perspectives, not Family Office Perspective. So, here’s my chance to change things.