Monday, February 23, 2015

Key Findings from STEP-IFB Engaging Advisors: Family Business Research

This joint research report from STEP and IFB provides insightful context and information about how advisors see family business clients and vice versa.

While the sample of individuals was small, the summary of findings and implications for this research are important to the field of family enterprise and the further development of advisory services to business families.

The report is a very realistic snapshot of challenges faced by family enterprise advisors and family businesses members. In some cases, the report makes valid points which are rarely seen elsewhere, and includes perspective from all sides on a variety of issues: owners, advisors, skill sets, governance, advice and the referral process.

Even highly educated and emotionally aware advisors should take the key findings of this report into serious consideration when navigating the complexity of family business relationships.

Furthermore, the questions and themes raised in this report are ideal topics of discussion for advisors and their family business clients, and/or as tools for development amongst family enterprise advisors.

A few choice quotes especially relevant for advisors:

“Everybody said they could help but most people did not understand family businesses”

“There is ego, arrogance, lack of empathy and a real lack of real credibility in terms of actually having done [this] before”

“The difference between being a successful owner and family and an unsuccessful owner and family is whether or not you’re savvy enough to choose the right advisors and use them in the right way”

“Family businesses have very little interest in being talked to about tax, accountancy or structuring; it is nearly all soft stuff”

“Advisors need to empower the family to choose who they’re going to work with”

“It is all about the process; if you haven’t got a process then there’s no way you’re going to get to the big decisions”

“Advisors bring two key skills to succession planning: setting objective standards for management skills and acting as neutral observers of individual family members’ strengths and weaknesses”

“The value-add of the outside advisor is to provide insights into the qualities and calibers of the people and come up with hard truths, to be able to hold up a mirror to the people and the family psychological system”

“I think advisors need to get away from the clock ticking”

“It has to be an outcome-based fee structure, not an hours-based fee structure”

“Advisors are not solution providers; they are a facilitator of a solution that works for every individual family”

“Advisors can’t provide solutions; families have their own problems and need to make their own solutions.”


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