NEPC’s Karen Harding recently authored an article for Financial Advisor on strategies family offices can use to prepare and empower the next generation of leaders. View the article on Financial Advisor’s site here.
“According to the University of Michigan Journal of Economics, somewhere between $68 and $84 trillion of wealth is going to pass from baby boomers to their millennial or Gen X children over the next two decades. This “Great Wealth Transfer” is expected to have wide ranging effects for the economy as a whole. But for the family offices at the heart of this transfer, the question is much simpler—is the next generation ready?
Increasingly, family offices are taking on the roles of educator, standard bearer and leadership coach for future family leaders, at a time when wealth management has become more complex than ever. Based on feedback from our family office clients, we believe there are a few strategies family offices can deploy to drive success in supporting a rising generation of leaders.”
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“As family offices have become more professionalized, they have felt rising pressure to adopt structured approaches to educating the younger generations. A successful approach can equip heirs to serve on boards, evaluate risk and lead philanthropic or commercial initiatives with confidence—all essential skills for long-term wealth management success.”
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“In our work with family offices, we have noted that successful strategies tend to view the younger generation as lifelong learners, and to build their wealth management skillset over time through exposure and practice. While every family is different, family offices with effective educational approaches typically use a common structure as they facilitate the development of future family leaders.”
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Consistent, high-quality reporting and information sharing is one way to build a strong foundation for long-term development. Integrated family office data platforms can be highly effective tools in this regard, organizing and communicating data in ways that non-professionals can follow.
Family offices can also benefit significantly from bringing in outside resources with specialized expertise along the development path. For example, many investment consultants (including NEPC), asset managers, and other third-party educational organizations offer financial literacy programming—up to and including some university executive education programs.”
Click here to read the full Financial Advisor Magazine article.