A wealthy family and its family business often pull in different directions. The family office exists to bridge that gap, and the Adapted Parallel Planning Process model shows one way to do it.
Most people know the old idea of shirtsleeves to shirtsleeves in three generations. Thomas Mann captured it in his novel Buddenbrooks. Advisors who run a family office see this pattern again and again. The first generation builds the wealth. The second, and perhaps the third, keeps it steady. The fourth, however, loses interest in the business. As a result, it often spends the fortune on luxury. Sometimes it also turns to low-yielding ventures, such as the arts. Either way, the wealth erodes.
So one question never goes away. How can a family preserve its wealth and still meet the needs of its members? This challenge grows over time. After all, the family expands from a single founder into many descendants. Meanwhile, the wealth stays flat or even shrinks, unless new ventures succeed.
Why parallel planning helps
This is where the family office earns its place. It aligns these competing demands. It plans for the business and for the family at the same time. Therefore, both sides move forward together, rather than against each other.
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