To build a sustainable and positive family or business legacy, it is very important that the following key principles be incorporated into your dynastic planning process:
1) The entire family must be involved in planning and NOT just the wealth-holder or business owner. The goal for a successful multi-generational family/business legacy is to plan “with” your family and not “at” your family.
2) The agenda for each family or family business meeting must be open to include the needs and concerns of all family members who are affected by the financial, estate, business, or legacy plan.
3) Part of the common mission for each family and business plan should be the indisputable realization that family members are the real assets and NOT the money or business.
4) Communication expectations for everyone must be setup upfront. For example,
- Everyone has wisdom;
- We need everyone’s wisdom for the wisest results;
- All will hear and be heard;
- There are no wrong answers;
- The whole is greater than the sum of its parts.
5) The best legacy solution is one that considers the needs of future generations. A legacy plan should focus on the perspective of family wealth and the family business for at least the next seven generations.
6) A Family Constitution should be created to help with the Governance of the Legacy plan. The goal here is not to dictate the future to family members but to establish guidelines for dealing with conflicts, new opportunities, in-laws, extended family member dreams, and the future complexity involved with the growth of family members into the third generation onward.
7) Structures, and committees, must be put in place for dealing with, and implementing, the financial, estate, business, and legacy plans.
Remember that a wealthy family or a profitable business cannot create a strong family but a united family with a common mission can build wealth and a sustainable and profitable family business.
Family Governance Explained
How is family governance relevant to investment professionals and Family Offices? What is a family constitution and how can it help avoid family conflicts? What lessons can we learn from the recent family conflicts that have been in the media in Asia? How should a family start if they want to form a family constitution?”
Jacqueline Novogratz: Inspiring a life of immersion
We each want to live a life of purpose, but where to start? In this luminous, wide-ranging talk, Jacqueline Novogratz introduces us to people she’s met in her work in “patient capital” — people who have immersed themselves in a cause, a community, a passion for justice. These human stories carry powerful moments of inspiration.
Jacqueline Novogratz founded and leads Acumen Fund, a nonprofit that takes a businesslike approach to improving the lives of the poor. In her new book, The Blue Sweater, she tells stories from the new philanthropy, which emphasizes sustainable bottom-up solutions over traditional top-down aid.
Why you should listen to her:
One of the most innovative players shaping philanthropy today, Jacqueline Novogratz is redefining the way problems of poverty can be solved around the world. Drawing on her past experience in banking, microfinance and traditional philanthropy, Novogratz has become a leading proponent for financing entrepreneurs and enterprises that can bring affordable clean water, housing and healthcare to poor people so that they no longer have to depend on the disappointing results and lack of accountability seen in traditional charity and old-fashioned aid.
The Acumen Fund, which she founded in 2001, has an ambitious plan: to create a blueprint for alleviating poverty using market-oriented approaches. Indeed, Acumen has more in common with a venture capital fund than a typical nonprofit. Rather than handing out grants, Acumen invests in fledgling companies and organizations that bring critical — often life-altering — products and services to the world’s poor. Like VCs, Acumen offers not just money, but also infrastructure and management expertise. From drip-irrigation systems in India to malaria-preventing bed nets in Tanzania to a low-cost mortgage program in Pakistan, Acumen’s portfolio offers important case studies for entrepreneurial efforts aimed at the vastly underserved market of those making less than $4/day.
It’s a fascinating model that’s shaken up philanthropy and investment communities alike. Acumen Fund manages more than $20 million in investments aimed at serving the poor. And most of their projects deliver stunning, inspiring results. Their success can be traced back to Novogratz herself, who possesses that rarest combination of business savvy and cultural sensitivity. In addition to seeking out sound business models, she places great importance on identifying solutions from within communities rather than imposing them from the outside. “People don’t want handouts,” Novogratz said at TEDGlobal 2005. “They want to make their own decisions, to solve their own problems.”
In her new book, The Blue Sweater, she tells stories from the new philanthropy, which emphasizes sustainable bottom-up solutions over traditional top-down aid.
“Acumen Fund is a not-for-profit group (but not a charity) that is supported by investors (not donors) who want a good “social return” on their capital.”
- 5 Secrets from a Social World Influencer (womenentrepreneursgrowglobal.org)
- Acumen’s Jaqueline Novogratz visits Mumbai, talks on her way of … – Bloomberg UTV (yourmoneysite.com)
- An Afternoon with Jacqueline Novogratz (thereflectionfiles.wordpress.com)
Raghava KK: What’s your 200-year plan?
You might have a 5-year plan, but what about a 200-year plan? Artist Raghava KK has set his eyes on an ultra-long-term horizon; he shows how it helps guide today’s choices and tomorrow’s goals — and encourages you to make your own 200-year plan too.
Raghava KK’s paintings and drawings use cartoonish shapes and colors to examine the body, society, our world.
Why you should listen to him:
Raghava KK began his career in art as a newspaper cartoonist, and the cartoonist’s bold line — and dead-on eye for truth — still powers his art. His work spans painting, sculpture, installation, film and iPad art, always linked by his challenging opinions on identity, conformity, gender, celebrity, ceremony. (He even views his lavish Indian wedding as a piece of performance art.)
His early work as a painter made a complete break with his cartoon career — he painted watercolors on canvas using only his hands and feet. Since then, his work has grown to knit together aesthetics from both worlds, as collage and complication play against flat color and precise lines. He shows in galleries and performance spaces around the world and often collaborates with other artists, most recently with musicians Paul Simon and Erykah Badu. In 2011, he launched his children’s iPad book, Pop-it, shaking up the concept of an ideal family. He is currently working on a project that promises to shake up everything! From news to education.
What is a Family Office?
Over the years, Family Offices have been created to cater to the needs of wealthy families in search of expert planning advice. Here are some commonly asked questions:
What is a Family Office?
A Family Office is a private legacy wealth management service offered to ultra-high net worth families to centralize control over family finances, legal, tax and administration issues. It works to provide the best solution for building, preserving and transferring family wealth through the generations.
Why use a Family Office?
A Family Office is most commonly utilized because your assets have grown in size and complexity and professional management is now required. The world’s most affluent families have established Family Offices to ensure their wealth will be preserved for their future generations.
What are the benefits of a Family Office?
- One central hub for information, advice, and an approved collaborative network for all the family’s financial and legacy matters.
- Pooled purchasing power across the family group resulting in better services and substantially reduced costs.
- A dedicated team of professionals who are focused on each family member’s goals AND the family’s common mission in a completely confidential manner.
- Continuity of true wealth from generation to generation.
- Access to professional advisors who can educate family members about their responsibilities of ownership, management, wealth, and governance
- Managing substantial liquid assets generated through the sale of a business.
- Obtaining customized credit.
- Managing multi-generational needs and educating the next generations to be responsible stewards of wealth.
- Providing estate and financial planning concierge services
What are the responsibilities of a Family Office?
The Family Office is the key vehicle for wealthy entrepreneurs to manage their wealth independently from their businesses. The purpose of the Family Office is to provide peace of mind about managing wealth.
The scope of the Family Office is significantly broader than a pure investment advisory company. The objective is not only wealth optimization but also preserving the family legacy. The Family Office provides support for the following important functions:
- Financial Planning for the Family
- Understanding Family Governance/Objectives
- Evaluating and Consolidating Current Service Providers
- Risk Management
- Return Management
- Estate Planning
- Family Governance
- Document Management
- Performance Monitoring and Analytics
- Concierge Services
How to Evaluate a Family Office Provider?
The selection of Family Office Services must be done cautiously:
1) Build Trust
Trust requires that the Family Office understands your needs and your family dynamics. Trust can be gauged from the ability of the representative of the Family Office to listen and understand your unique situation. As no one can be an expert in everything, the Family Office must be your strongest advocate to other professionals to achieve your goals.
2) Quality of Research
Check the resources dedicated to the Family Office research. The Family Office should be advisory in nature and not simply a product seller. This ensures independent advice and you are protected from owning products which are not in line with your asset allocation goals.
3) Leveraging Expertise
Who are the strategic network providers to the Family Office. The stronger the network, the better the service. .
What about your existing advisors?
Your existing advisors should be valued contributors to the Family Office. Rather than trying to replace your existing advisors, the Family Office should focus on complimenting the advice your other professionals provide to ensure that your ‘big picture’ goals for your wealth and family legacy are met.
How does Lugen Family Office work?
Our family office provides you and your family with a well established and trusted process:
Lugen Family Office is very discreet about using professionals and personnel that maintain client confidentiality at all times.
2) Comprehensive Services
Lugen Family Office has created a Strategic Network of world class institutions, firms, and professionals to ensure your Family Office needs are fulfilled.
- Major Risks To Family Wealth (quadcitywealthplanning.com)
- Family Estate Planning Offices (lawprofessors.typepad.com)
- Managing far more than just money (todayonline.com)