The Future of Family Offices: Why Multidisciplinary Teams Are Essential
The goal of every family office is the same- to serve the financial and capital needs of current and future generations. However, the process is changing.
We will always require attorneys and wealth advisors to “stay in their swim lanes” and practice compliance. That will never change. Those silos are necessary, but NOT sufficient. Today, cross functional teams of interdisciplinary advisors are collaborating and providing external expertise.
Recently I was asked to create video recordings for a multi-family office (MFO) with over $1B in assets under management. They wanted me to share succession planning advice with their 80+ clients. Last week I talked with my new friend, Charmaine Tang, CEO of Orca Americas, about the need for people and technology to model innovation for family offices. Also last week I invited Brannon Fisher, a MFO partner, to share advice with our Next Gen Peer Group leaders when we met in Denver. Minutes ago I spoke with Bradley Franc, CEO of Succession Strategies, who said, “We don’t do what you do. We should partner.”
Notice the pattern?
We all have such meetings, because we all serve the current and future needs of our clients.
I can only imagine that such collaboration will accelerate. There is a growing trend toward building multidisciplinary teams within large family offices. Those internal teams may include specialists from various fields together to collaborate and provide comprehensive advice. Naturally, each advisor brings unique legal, financial, or relational expertise. Every smaller Family Office needs to do the same. They need to develop external teams of expert advisors. The power of multidisciplinary collaboration lies in our ability to address the full complexity of family dynamics and wealth management.
Wealth advisors, thankfully, are focused on maximizing assets for long-term gain. Attorneys and insurance advisors focus on protecting assets and minimizing risk, thankfully! Both roles are critical and are NOT sufficient for Next Gen leaders who expect more transparency, digital access, and opportunities to learn.
Family Offices, like any social organization, need to evolve. Every aspect of the family’s wealth or legacy deserves expert advice.
Navigating Intergenerational Conversations
Consider a typical family office meeting: the Elder Generation is planning for retirement and succession, while the Next Generation is learning about investments and long-term financial planning. In the middle, a team of advisors—legal, economic, and often behavioral psychologists (like me) —helps facilitate the conversation.
These discussions may be delicate. The Elder Generation needs to learn to bite their tongues. They need to encourage the Next Generation to ask questions about access to funds, investment strategies, and their personal goals.
For younger family members, these meetings present an opportunity to learn about critical topics like compounding interest, wealth distribution, and long-term planning. I’ve been facilitating a series of family meetings with three Elders, five Next Gens, and three wealth advisors from Northern Trust. By the end of the last session, the Elders were beaming with satisfaction. A multidisciplinary team ensures that these meetings are not just about financial details but about fostering open, constructive dialogue across generations. Advisors from different fields can help ensure that the right questions are being asked and that all voices are heard.
The Expanding Role of the Family Office
Family offices have historically focused on wealth management—handling investment portfolios, estate planning, and tax strategies. But the role of the family office is evolving faster than ever. Many family offices are expanding toward a more comprehensive model that addresses both financial and Family Capital.
The Family Capital Model includes five key areas:
Health and well-being
Family governance and decision-making
Succession planning and education for the next generation
Family dynamics and interpersonal relationships
Risk management, both financial and relational
This expansion reflects a broader understanding that to preserve a family’s legacy, the focus must be on the whole family, not just its financial assets. How do Family Office leaders support that broad need? With timing and expertise.
The Importance of Multidisciplinary Collaboration
Timing matters. Bringing in the right expertise at the right time is critical for any family office. A well-rounded team of advisors can ensure that a family’s needs—whether related to wealth, legal matters, or family dynamics—are met efficiently and effectively. When a Family Office relies solely on financial experts, it risks overlooking other vital family legacy elements. A multidisciplinary team mitigates this risk by ensuring that all aspects of the family’s life and legacy are considered in decision-making processes. Quarterly meetings work well. An annual cadence of ownership meetings is a minimal requirement.
Expertise matters. Advisors from different disciplines often approach problems from unique perspectives. After years of formal schooling, credentialing, and serving similar clients, those perspectives are reinforced and they bias every advisor. Thankfully! Think of any trigger event, like the sale of an asset or death of an Elder. Financial advisors are adept at identifying the right moments—like liquidity or birthdays or significant life milestones—to reassess strategies. Legal and insurance advisors ensure that these strategies are sound from an asset protection or risk management perspective. Family psychologists or governance consultants may facilitate conversations around succession planning, interpersonal relationships, and decision-making structures. Nothing is more crucial.
Today, more than ever, families face complex challenges beyond financial management. We all require a team that can holistically serve our needs for expertise in health, wealth, and relationships.
Embracing the Complexity
Let’s assume that Family Offices will play an increasingly important role in managing wealth and the complex needs of families. The sheer scale of assets expected to be transferred between generations in the next decade—estimated to be over $80 trillion USD – makes succession planning and Next Generation leadership development essential priorities for Family Offices. That’s why our team partners with Family Offices. People need our 360 assessment process to confirm who has leadership capacity and what behaviors to develop. People need our Peer Groups to improve communication, reduce conflict, and reduce anxiety about succession.
Let’s also assume that technology will also play a more significant role. Advanced tools, from AI-driven assessments to virtual platforms for family collaboration, are already being used to enhance family governance and communication. Can you imagine a hologram with your 100-year old Elder or Founder in a discussion? Can you imagine 5 generations of family in a meeting, rather than 2-3 generations, as a result of enhanced lifespans? Those technologies will never replace the need for human expertise. Curiosity and humility can never be replaced by AI, and those are two competencies worth developing in most family systems.
Preparing for the Future
To navigate this evolving landscape, Family Office leaders must ensure that their teams can handle both financial and family capital needs. Multidisciplinary teams are not just a trend—they are becoming necessary for Family Offices looking to sustain their success across generations. External advisors provide scaled solutions and reduce costs.
For advisors who serve Family Offices, now is the time to evaluate whether your advisory team is comprehensive enough to address the full range of family needs. Are you prepared to guide your clients through complex psychological and social transitions?
If not, consider expanding your advisory network to include experts who can help you address the evolving challenges facing family offices today. We can help.
I’m often surprised at what business psychologists know, that ANYONE could benefit from knowing and practicing…
This content is #1 of 3 articles.
Title: The HERO Model: An approach for Navigating Organizational Changes in Family Enterprises
All leaders and advisors struggle with Organizational Change. How could our work be anything else? Family enterprises are infinitely complex. No one likes to be told to change. We all bring our biases and adopt heuristics to reduce that complexity. Attorneys say, “We mitigate risk.” Wealth advisors say, “We leverage capital assets.” Next Gens say, “We want to innovate.”
We all use heuristics (patterns for what works) to reinforce the structures that reflect our worldview for each family system. One common example is the multidisciplinary views of capital, that include financial, social, human, family, legacy, and intellectual views of capital. Those views of capital are resource-based, and the capital diminishes as we age. In my final years, for example, I will forget people and information, and my financial assets will be invested into healthcare… just like each of our clients.
What would happen if more practitioners adopted a more pervasive and universal view of capital?
Social psychologists (like me) know that Psychological Capital (PsyCap) is a dynamic, validated construct that can be used to describe our clients. PsyCap is defined as a construct based on 4 inter-related competencies: Hope, Efficacy, Resilience, and Optimism (see the APA link here, or read the book here).
As the primary author, Fred Luthans, recently stated to me, “PsyCap has and continues to take off across the world … I have over 166,000 citations of my research which has been awarded in the top 1% of all researchers in all fields in the world and ranks #1 in organizational behavior textbooks. In other words, I am very happy with how PsyCap research is going, especially in the global economy.” (direct communication 9.5.24).
The HERO model is more than a convenient acronym. The HERO-within model is a critical approach that practitioners can apply at multiple levels- individual, team/ family, and organizational/ societal.
I have applied the PsyCap model with countless clients for decades. You can also do so!
And ANYONE can apply this model to themselves.
Practitioners, by definition, need to practice new behaviors and share them widely. My opinion is that practitioners have a fiduciary responsibility to practice both new ideas (innovation) and celebrate strengths (stability) every day.
The purpose of these 3 short articles is to introduce the HERO model, like a new vocabulary term, and examples that can be applied by advisors in any discipline. I invite you to assess how you can apply these practical examples with yourself, your loved ones, and with the clients you serve.
Imagine that you are building a house with a garden that you hope will support generations of loved ones. Hope is defined as “the will and the way” to build a better future (read the book here). Every business founder believes “I can build this product or service.” Their hopes are often defined in founder’s history books or videos, vision statements, the stories told and re-told at gatherings. Efficacy is the capacity to build that new house, to get the job done. We all use blueprints such as values statements, family constitutions, charters, phased strategic plans for new projects. Resilience is our capacity to respond to adversity by returning to the same or a better level. Examples include our responses to global disease, market adversity, or loss of our loved ones. Optimism is our choice to believe in a positive outcome, such as well-being for our children and grandchildren. All four of these competencies can be measured, taught in under 90 minutes, and developed over time. The PsyCap impact is more significant when all four competencies are measured (a second-order effect) than when only one or three competencies are measured.
Here are examples for how we can accelerate PsyCap at three levels: Individual, Team/ Family and Organizational/ Societal.
Article #1 of 3: The HERO Model applied at the Individual level
We all need to look in the mirror at times. We all need to exhale. All good leadership development models start with self-awareness and lead to new actions, so it makes sense to start this list of activities with assessments, then several new behaviors that you can implement immediately.
A. Pre-Meeting or Annual Surveys. For years I’ve embedded these 4 questions into surveys so that I can provide a summary of PsyCap changes over time. Directions: On a scale of 1 (low) to 10 (high) how do you assess each of the following?
1. Hope. I have “the will and the way” to achieve my goals.
2. Efficacy. I feel confident that I know what I need to do to achieve my goals.
3. Resiliency. I can get through difficult times or challenges.
4. Optimism. I am optimistic about what will happen to me in the future.
When I share the data, I also encourage people to use these four vocabulary words regularly.
B. Self-Assessments. Individuals and teams can clarify values using free tools like https://www.viacharacter.org/ or https://www.lifevaluesinventory.org/
Personality and behavioral data including strengths and derailers can be assessed from https://www.hoganassessments.com/ or https://www.discprofile.com/
C. 360-Assessments. The most valid form of assessment is anonymously collected from others and focuses on the behaviors of family and non-family leaders. See my process at https://assessnextgen.com/
D. Reflected Best Self activity. When I ask 10-15 people to describe my strengths and weaknesses, those details can help me identify how I can be “At My Best.” Our colleagues and loved ones may never have been asked to provide feedback or advice. (See details at https://hbr.org/2005/01/how-to-play-to-your-strengths).
E. Three Good Things. The gold standard in social science, with over 100 years of research, occurs when a random sample population repeatedly has a significant result from an isolated behavior. Imagine that you practice this new behavior for a week. When going to bed, write down or state out loud Three Good Things that happened that day. Simple activity, right? If we measured your subjective well-being (happiness) daily, it would increase. Related prosocial measures, like gratitude and kindness, also increase. If you extend your Three Good Things activity into a journal for months and years, then you can ask your loved ones if they notice any results. (read the book here).
F. Adopt a metaphor, such as building a new house with a garden where your great grandchildren can flourish. When we “design a future self or future house” then we can adopt that metaphor and practice flourishing. Ask any founder. Or ask any parent. When we hold newborn children, we always whisper our best intentions and hopes. Why not do the same for yourself and your clients?
Time to pause… what do you think?
Article #2 in this series will focus on the team/ family level.
Article #3 in this series will focus on the organizational/ societal levels of organizational change.
Conclusion
Like every practitioner, I’m regularly reminded of how little I know. I ask for advice, and read, and on good days I listen well. Then I try something new. The PsyCap term may be new to some readers. However, the words “hope, efficacy, resilience and optimism” are ancient and familiar.
If we embrace the HERO model for our loved ones and our clients, then we are practicing ancient wisdom, in a new way. (See my riveting dissertation here).
My experience is that Psychological Capital describes family-centric values over a longer term than any other measure of capital.
Please add your thoughts if you share that bias or want to continue this conversation!
Here is Annual Self-Assessment Form. Copy this. Print this. Post your notes with YOUR coach or accountability partner.
Date: _________
Step 1:
List the top 5 people who are most important in my life today.
Instructions:
For each statement below, imagine how those who know you well would score you. Use a scale of 1 (low) to 10 (high). After scoring yourself, add comments for additional insights or actions to improve.
Hope: “I have the “will and the way” to achieve my goals. Score: ____
Efficacy: “I feel confident in my ability to take on challenges and achieve desired outcomes.” Score: ____ Comments: ________________________________________________________
Resilience: “I can bounce back from setbacks and adapt to changes.” Score: ____ Comments: ________________________________________________________
Optimism: “I focus on the positive aspects of situations and believe in the best possible outcomes.” Score: ____ Comments: ________________________________________________________
Humility: “I value the contributions of others and admit my mistakes.”
Curiosity: “I actively seek new knowledge, ask questions, and explore diverse perspectives.” Score: ____ Comments: ________________________________________________________
Collaboration: “I work effectively with others, fostering trust, and contributing to collective goals.” Score: ____ Comments: ________________________________________________________
Accountability: “I take responsibility for my actions and follow through on commitments.” Score: ____ Comments: ________________________________________________________
Empathy: “I show understanding and compassion toward others’ experiences and emotions.” Score: ____ Comments: ________________________________________________________
Vision: “I communicate a clear and compelling vision that inspires others to act.” Score: ____ Comments: ________________________________________________________
Reflection Questions:
What do these scores and comments suggest about your current leadership strengths?
Which area(s) do you most want to improve over the next year?
How can you leverage your relationships with the five most important people in your life to support your personal and professional growth?
12 months from now, what are 1-2 important aspects of your life that you would regret losing? (These are the 1-2 aspects to focus on ahead).
Naturally, this self-assessment can be repeated at any time to track your growth and identify areas for continued development.
If you have advice on how to improve this self assessment, please comment or reply directly.
Yesterday a client said, “We’re too small. We can’t afford consulting. We make less than $1M in annual revenue. We build decks and patios. This business pays the bills. I guess it’s my retirement plan…”
Sound familiar?
Yikes. It sounds short-sighted and dangerous to me!
People provide solutions… and customers buy solutions. That’s the bottom line.
This business leader does not ONLY build decks and patios… Not really. That would be short-sighted. He creates “outdoor living experiences for loved ones.” Something remarkable.
How much would you invest in a backyard party for your child’s birthday? Or your family reunion? Or your weekend football game party? Or that special bottle of wine or bourbon?
If you invested $30,000 into an outdoor living redesign, wouldn’t you expect decades of priceless experiences with your loved ones? That solution is priceless.
Case Study: Joe
A second business leader said, “I don’t think I have anything valuable, so when I retire, I’ll just let it shut down.”
I asked, “What’s your annual revenue and earnings?”
He said, “Our revenue is about $1m/ year and I make about $250,000 year. Everything else goes back into capital expenses and employee compensation. We’ve had a good life. I’ve raised my family.”
I asked, “What if you assumed 4x earnings, and someone offered you $1,000,000 to buy your business next week? Would you retire?”
FACT: Most business leaders don’t know their value and succession options.
Market Analysis Figure 1:
Check out these details… do they look familiar to you?
Segment
Annual Revenue
Avg. No. of Employees
Avg. No. of Owners
FTEs
Strengths
Weaknesses
Key Problems
Small Family-Owned
Less than $1M
10-50
2-3
5-25
Strong community ties, family unity
Limited resources, dependency on few customers
Lack of growth strategy, succession planning
In every corner of the world, in every business sector, small businesses define the success of every economy. They are the social fabric of communities. They define success. They create over 65% of jobs and GDP in the US, and a higher percentage in Asia.
Most of the time, business leaders quietly pass on their business to family members or capable leaders. Sometimes there is conflict because of bad communication. Those succession planning discussions require expert advising from consultants.
“Do-It-Yourself” consulting or “Consulting From a Book” always leads to failure. Don’t waste your time or money.
I hire experts to build outdoor living experiences. Or to do any plumbing, electrical, legal, and financial work. Don’t you hire similar experts?
Market Analysis Figure 2:
How much would you expect to invest in a consulting solution?
Consulting Needs
Consulting Fee Range (Phase 1)
Consulting Fee Range (Phase 2+)
Representative Business Types
% of U.S. Economy, approx. #
Familiar Family-Owned Businesses
Business planning, succession and leadership coaching
$5,000 – $15,000
$10,000 – $25,000 annually
Local restaurants, niche retail, craft breweries
~10%, 3.1M
Zabar’s (NYC), King’s Hawaiian, Goorin Bros.
There’s no need for confusion about pricing. That approach only leads to distrust.
• Consulting Needs are problems that require external solutions, such as conflict resolution, strategic planning, or leadership coaching.
• Consulting Fee Range (Phase 1: Initial Discovery/Assessment) includes the initial consulting phase, such as discovery, assessments, and strategic recommendations.
• Consulting Fee Range (Phase 2+: Annual Consulting Phases) covers ongoing consulting needs in subsequent phases, including implementation of solutions, leadership coaching, and strategic execution over a year or more.
Back to the first example of the business leader named Joe, who doesn’t know the actual value of his business. Joe has three options:
No investment in consulting. When Joe retires the business dies.
Small investment in consulting, $15,000- 40,000 over 12 months. When Joe retires the succession plan may enable the business to continue.
Larger investment in consulting, $75,000 – 200,000 over 5 years. When Joe retires the succession plan may provide over $1,000,000 in real value to the owners or their benefactors. The community retains jobs. The business legacy may continue for generations.
Sound familiar?
The solution for most family-owned business leaders is NOT venture capital or private equity investors. They will extract value and disappear within 3-5 years. That would be short-sighted and dangerous.
The solution is to invest in consulting solutions, such as “family capital for loved ones.”
Succession Advisory Teams
The only way to win a football game is expertise on the offensive team, the defensive team, and the special teams. Each team measures success differently to “put points on the board” or “hold them to three downs” or “run it back.”
In the same way, a Succession Advisory Team brings multi-disciplinary experts together to achieve a win.
Lawyers provide risk mitigation and contractual agreements. Accountants provide business valuation and options. Wealth advisors provide investment options. Business psychologists (like me) facilitate the process.
There are many opinions about the top strengths of family business leaders.
One of my recent projects answers that question.
We (Kent Rhodes, Ed.D) and I recently developed and validated a 360 assessment process for next generation family business leaders. See www.AssessNextGen.com for details. We determined the top 50 items.
Our recent research found that the number 1, top strength, or Career Catalyst for family business leaders is Item 13: “Keeps confidences about family business wealth.”
Hmmm. On a scales of 1-10 how well does your family business keep confidences about family wealth? Here are some quick thoughts about how to apply this finding to your family enterprise or family business consulting.
For more details contact Doug Gray, Ph.D. at Gray@theFBCG.com or Kent Rhodes (Ed.D.) at Rhodes@theFBCG.com
Here is the transcript for your reference and sharing:
Title: What is the most important strength for Family Business leaders?
Description on YouTube post: A quick research update from www.AssessNextGen.com. We can now answer that ancient question, “What is the most important strength of Family Business leaders?” Here are some tips for your family enterprise or consulting.
Transcript of video:
Sometimes people wonder, “what are the top competencies that family business leaders need?” And I’m happy to report some early results from the Assess Next Gen Family Business Leadership 360 assessment. This data is from 163 responses in the last few months. Here is the top score, in other words, the Career Catalyst, the behavior that is number one. I’ll give it to you and then I’m going to ask you to reflect on it.
The top score, the thing that our raters said others ought to do, is item number 13: “Keep confidences about the family business wealth.” To repeat, the most important strength of Family Business leaders is to “keep confidences about family business wealth.” What does that mean for you and your family or your enterprise?
I recently asked that question of a friend of mine, John Broons, who’s in Australia, who is pretty brilliant. And he said, “family wealth needs to be part of the conversation. It’s too often not discussed.”
I agree. We need to prepare for risks, like a transition or a succession or continuity or another line of business. And too often family members don’t have any idea of what’s next. There’s the core business. Perhaps there might be other lines of business, but family wealth conversations should definitely stay within the family.
Many of my clients have a charter or clause which states, “This is what we will say, and to whom.” They may have a conversation with the wealth advisor and estate attorney, and they may not have that conversation with somebody like me, a business consultant. The family members are the only ones who have access to that information. This is to protect them from journalists or politicians or inappropriate people seeking to learn something about that wealth. And often this confidentiality clause is written in an agreement. So we’re really talking about the two first words here…
Keep confidences. The most important strength of Family Business leaders is to keep confidences.
How do we keep confidences? I think we need to reinforce some useful guidelines. My clients require trust guidelines. Let me give you a quick example. One of my clients has eight G4 children on this side and four children on this other side. Potential conflicts, right? So they made an agreement in writing, and verbally reinforced it in every one of their meetings, about what could be shared with Doug as the family business consultant working with that G4 generation. My focus is on leadership development. Part of my job is to reinforce for them what’s confidential and what they need to keep confidential.
It’s a bit like driving a car when you’re driving down an unfamiliar road. You’ve got the white lines on the right side, the yellow lines on the left side. Like a good driver, we need to keep confidences. We don’t want to go to the edge of those lines. We don’t want to go off the center of the road. We certainly don’t want to go in the dirt or the gravel on the side.
So, my invitation is to keep confidences about family business wealth. Keep that conversation sacred. There you go. Tip of the moment.
For more details on the Assess Next Gen Leadership 360 process, see www.AssessNextGen.com
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