What does a family office do for the next generation?

A family office typically supports the next generation by educating them about the family’s wealth and responsibilities, involving them in family governance, coordinating outside advisors and making introductions to mentors, programs and peers. What it offers varies widely between offices. Most do not, themselves, prepare a successor to lead an operating company’s board and team, which is where specialist coaching can sit alongside.

Family offices come in many shapes. Some are a small team serving one family. Others serve many families at once. Some focus almost entirely on investments; others handle a broad range of family matters. So any description of what “a family office” does is general by necessity. The most reliable answer for your family is the one your own office gives you.

This article describes common services, not any particular office, and it does not offer investment, tax or legal advice.

What kinds of family office are there?

Two broad types are usually described:

Single-family office. A team employed by, and serving, one family. It can be highly tailored, and is usually found where the family’s wealth and complexity justify a dedicated team.
Multi-family office. A firm that serves several families, offering many of the same services on a shared basis. Some grew out of a single-family office; others are part of a wider financial firm.

There are also many in-between arrangements, such as a family that relies on a private bank for some of these services and on its own staff for others.

What do family offices commonly do for the next generation?

Not every office offers all of these. Many offer some.

Education about wealth and responsibility

This is the most common area. It can include financial literacy, how the family’s assets are structured, how investment decisions are made, what trusts and other arrangements mean for the individual, and the responsibilities that come with ownership. Some offices run this themselves; others use outside programs, including those run by private banks, which are described in what a bank’s next-generation program covers, and what it does not.

Involvement in family governance

Many offices support the family’s governance: organising family meetings, helping with a family charter or constitution, and supporting bodies such as a family council. For younger family members, this is often their first experience of taking part in decisions about the family’s affairs. What is a family council? explains how those bodies usually work.

Coordinating advisors

A family office often sits at the centre of a group of outside professionals: lawyers, accountants, tax advisors, investment managers and insurers. For the next generation, this can mean being introduced to those advisors, understanding who does what, and gradually taking part in conversations that affect them.

Reporting and administration

Consolidated reporting, record keeping, paying bills, managing property and other administration are core services for many offices. They matter to the next generation mostly as a way of seeing, clearly, what the family owns and how it is managed.

Philanthropy

Where the family has a foundation or a giving program, the office may run it, and the next generation is often invited in through it. A seat on a grants committee can be a useful first experience of governance and shared decisions.

Introductions and opportunities

Offices often help with introductions: to mentors, peer networks of other families, internships in other businesses, educational programs and specialists. This is one of the most valuable things a well-connected office can do.

What do family offices usually leave to others?

A family office is generally built around the family’s wealth and affairs. The operating business, if there still is one, is often run separately, with its own board, management and advisors.

That means a family office is not usually set up to prepare a successor for the specific, practised work of leading that company: running its board meetings, addressing its people, leading executives who have been there for decades, winning over the bank and key customers, and agreeing the handover with the founder. Those skills are built through practice on real situations, over time, and are usually outside an office’s core role.

That is not a gap in a good family office. It is a matter of focus. The best offices know what they do well and bring in others for the rest.

Where does coaching fit alongside?

Specialist coaching for a successor tends to sit alongside a family office rather than compete with it. In practice, the office can play several useful roles:

Noticing the need. Advisors often hear the founder’s worry about the successor before anyone else does.
Raising it with the family. An office trusted by the family can suggest outside support without it feeling like a criticism of the successor.
Checking options. Comparing programs, coaches and advisors, and asking the right questions about each.
Keeping the overall picture. Next-generation development is often delivered by several people: a business school, a bank program, a mentor, a coach. Someone needs to see how the pieces fit, and that is often the office.

What is next-generation leadership development? sets out the different pieces and how families tend to combine them. For advisors, how advisors refer a family to a coach covers how to raise it discreetly.

Questions a family might ask its family office

If you want to know what your office can offer the next generation, a few direct questions help:

What do you currently provide for the next generation, and who delivers it?
Is it designed for heirs and owners in general, or for someone about to lead the operating business?
How do you involve younger family members in governance, and from what age?
Which outside programs, mentors or specialists do you work with, and how do you choose them?
Who keeps track of how each family member is developing, and how is that shared with the family?
Where does your role stop, and who picks up from there?

The answers will show quickly how much the office covers, and where you will need others.

In short

Family offices vary widely, from one family’s dedicated team to firms serving many families.
For the next generation, they commonly offer education about wealth and responsibility, involvement in governance, coordination of advisors, philanthropy and introductions.
Most are not set up to prepare a successor to lead an operating company’s board and team, which is usually done through practice on real situations.
Coaching for a successor tends to sit alongside a family office, with the office often noticing the need, raising it and keeping the overall picture.

Second Chair™ works with one successor at a time on the leadership side of the handover, and a family office can submit a request on the family’s behalf through the request form.