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Bridging Family Office Generations Through Impact

The intense focus on impact investing can create a bridge between the generations and smooth the engagement process even of succession planning for family offices.

But delegates at the WM Nexus Impact Investing Forum in London also heard that families of wealth need a coherent approach that, in part, requires them first to assess what purpose and impact mean to them, and what these concepts mean across the generations, as well as for society more broadly.

Of course, there are important differences across different countries and indeed the discussion group reflected that with contributions from, among others, those with Singaporean, Lebanese and Kenyan backgrounds.

Yet there are also common themes as well.

Moderator Zita Nikoletta Verbényi, founder of The Legacy Atelier, suggested that families of wealth have been making an impact in the broadest sense of the term for many generations through their businesses, philanthropic and educational work.

“Impact-related activities have been around for millennia, and especially for these multi-generational business families and legacy families, sustainability and impact was always high on the radar,” she said.

Yet even families and their offices with a long and established history face the challenge of finding new ways to achieve impact also through investing. Delegates suggested that discussions about impact and purpose can even prove supercharged across different generations. The optimistic conclusion however was that when a process is handled carefully you can find points of resonance and synergy.

It was felt that defining purpose was also important in helping the next generation to discover those ‘aha’ moments and would ultimately bring rewards. It could help families and their offices build a framework that encompasses the foundational legacy but also adds new interests and even passions from the next generations as well.

“You have to ask how much you are building upon the existing legacy framework of the family, but still bringing in new layers - enriching stories and new fields of impact and purpose”, said Verbényi.

It did require existing family leaders to act consciously, purposefully, and intentionally to build upon their own legacy and meaning framework.

In terms of causes that inspire Next Gens, it was suggested that this can depend on their own particular passions, the current social, environmental, cultural, and economic matters, but also to a degree on the family’s structure and other family-unique characteristics.

Yet Gen Xers don't necessarily see that solutions and frameworks are already there for them to be tapping into. In practical terms, families should be considering setting up a next generation group, if the next gens have not created these already by themselves, even collaborating already with next generation members of other families.

“It can be really powerful, when the Next Gens put their intellect, talents and skill sets together, and collaborate on different projects with intersecting purpose and impact layers, creating cross-impact. Of course, the current family leaders and senior generation members also have a prevalent role, when it comes to instilling the family values and also sensibly guiding and inspiring the next generation when it comes to purpose and impact.

The continued embrace of impact opportunities by asset management can create another bridge between the generations.

“It's a wider concept than just impact investing. There is a lot more philanthropic and educational activities in all sorts of different shapes and sizes. It forms a wonderful bridge for family members to learn from each other and create better understanding, which really enhances their overall value framework as well. It raises the quality of the conversations that they've been holding between the generations.”

There is one significant difference, however.

It was clear from the experience of delegates that the next generation really wants to see where money is going. They want to be on the ground, they want to go to remote areas, they want to shake hands with people, they want to see the impact.

“It's great to hear the quants, and understand what’s behind these numbers, how, when, with whom, why they were measured, and for what purposes. But it is also a lot more about the qualitative aspects of how lives are changing and how the impacts are really playing out on many levels, horizontally and vertically,” added Verbényi.

John Lappin is Contributing Editor at WM Nexus

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