Family Governance Key To Wealth Preservation, Study Says
Creating a family governance structure to make financial decisions may be the best way to assure that wealth is preserved for future generations, according to new research by Federal Street Advisors, a Boston wealth advisory firm.

Families have conflicts and wealth often turns small problems into big disasters that affect the entire family, the firm says in a new white paper, Family Governance: The Key to Successful Wealth Transition by John Przybylski, the firm's director of financial planning, and Charles A. Walsh III, principal.

Any number of scenarios can play out that lead to problems within families about how to handle money. One way to help stop that is to create a family council or governance structure, according to the white paper.

"In small families, this council may include all family stakeholders. In large families, the council may include appointed or elected representatives from each branch of the family," the white paper authors said.

The authors acknowledge that some details of establishing a council can be explosive if not handled properly, including deciding who should be part of the council.

Among the duties of the council may be to write a formal mission statement that can take into account the family legacy and philanthropy efforts. The council could document the family history and hold educational events.

The mission statement can act as a tool to acknowledge shared family goals and establish a code of conduct based on shared values, according to the white paper.

"It reflects the family's history and attitudes about the relationship between financial capital and individual initiative, an often sensitive subject for hard-driving patriarchs with less financially motivated offspring," the authors said.

Most of all, "a family council or other governance structure can improve the quality of family interactions by keeping family members connected with each other and informed about the status of both the family and the family business," the authors said. The most successful structures foster communication between members and between generations, the authors said.

There also comes a time when it might be wise to bring in an impartial outside advisor to listen to all family members and help resolve conflicts, the paper noted.

The family council needs to acknowledge that family capital comes in other forms than just money, such as the human, intellectual and social capital of each of the members, according to the white paper.

The council also can be instrumental in passing on the family legacy to succeeding generations.

"Preserving and passing on wealth is vitally important, of course, but most [families] are equally concerned with philanthropy and the readiness of the next generation to be good stewards of their inheritance," the authors said.
"Creating a solid family governance structure is one of the most effective tools for sustaining a meaningful family legacy-one that honors and preserves both wealth and core values."

-Karen DeMasters


On The Move

CBRE Global Investors has hired David Morrison as global head of strategy. He will also serve on both the global executive committee and global leadership team. Prior to joining the CBRE, Morrison held senior level positions for Morgan Stanley Real Estate and Prime Property Fund.

Mariner Wealth Advisors of Leawood, Kan. has hired Brian O'Regan to lead the firm's nationwide growth initiative. O'Regan, a 20 year financial services industry veteran, joins Mariner from Fidelity Investments.

BNY Mellon's wealth management business has appointed Ron Bruder as managing director of its family wealth advisory team. Based in Newport Beach, Calif., Bruder brings over 25 years of financial services experience, most recently serving as director and vice president at Goldman Sachs.

The Connors Group of Jersey City, N.J., announced that James Lonergan will succeed the company founder, Larry Connors, as chief executive officer. With over 20 years of experience in managing and growing information businesses, Lonergan has held various senior level positions for Synaptic Digital, Sports Information Group and

Washington Wealth Management continues its expansion strategy with the opening of two new offices located in Las Vegas and San Diego. Mitchell and Jessica Horst, formerly of Morgan Stanley Smith Barney, will anchor the Las Vegas office. David Allen, also from Morgan Stanley Smith Barney, joins the San Diego office.

Philadelphia Financial Group
announced its plans to acquire the private placement insurance operations unit from The Hartford Financial Services Group. Philadelphia Financial will service the $35 billion business previously serviced by Hartford Life Private Placement, extending their market into the bank and corporate owned arena.

-Kathy Lynch