As much as things change, they stay the same… or do they? One would be forgiven for assuming that Family Offices are a new concept. In fact, the practice of employing an independent party to manage the investments of wealthy individuals and families dates back to the sixth century. The function then, as it is now, was to outsource centralized wealth management with one primary goal, to ensure cross-generational succession and continue the legacy.
Heirs needed to be produced and step-up into leadership roles without question. Some families became their businesses and stood the test of time. Others didn’t. It would appear that independent Family Office consultants played a pivotal role in succession planning thereby ensuring the longevity of the legacy.
Research conducted by the Family Business Institute, specialists in succession planning, shows that 30% of family-owned businesses survive until the second generation, 12% to the third and only 3% to the fourth generation or beyond.
This is indicative of how business paradigms have evolved during the various Industrial Revolutions through which economies and successful family owned businesses have endured. And it makes sense.