Annual family gatherings or family retreats have become a recognized best practice for advisors serving successful families. At the heart of this trend is the growing recognition that sustaining wealth over generations requires collaboration and good communication among family members. This is particularly true for multigenerational and multi-branch families, as well as families that may be geographically disbursed.

Well-prepared families have learned to collaborate. This collaboration is often intended to  proactively address the pitfalls of inherited wealth—family disputes, poor decision-making, unprepared heirs, feelings of entitlement and a number of other problems that erode family cohesion as well as family wealth. Much like any effective partnership, collaboration is often a function of family culture, leadership and behavior, as well as a thoughtful approach to creating opportunities for family members to exercise effective communication, decision-making and conflict resolution. Success does not depend on everyone liking one another all the time but rather on pursuing common interests. Well-designed family meetings foster these goals. 

With the high stakes involved in successful families, why don’t most families hold annual or periodic family meetings? Frequently, issues of control, succession, ownership, privacy, painful interpersonal relationships and simple logistics are cited. Yet whether a family chooses to hold a single annual meeting or embraces an ongoing program of gatherings, the benefits of such meetings are numerous.

The Purpose Of A Family Meeting

In a 2003 study of 3,250 wealthy families, Williams and Preisser found that even substantial wealth had disappeared by the end of the second generation in 70 percent of families. The number rose to 90 percent by the end of the third generation and 98 percent by the end of the fourth. The causes of this erosion included some expected reasons, such as the growth of the family, but more surprisingly, the vast bulk of this erosion, well over 90 percent, could be attributed in some form to poor communication and low trust, inadequate preparation and training of the next generation, and failures of family mission and vision. Family gatherings are a key element in a family’s strategy to avoid these problems.

At its heart, the family gathering is about three things: understanding each other, learning together and collaborative decision-making. Regardless of the content or agenda of family meetings, they should result in both creating and exercising working agreements amongst family members and serve as a fundamental and strategic framework as the family evolves and responds to changing circumstances.

The first few family gatherings should focus on three foundations for long-term family success: improving and developing communications skills, family attunement  and setting strategic direction. These gatherings should be facilitated by a third party, skilled and experienced in this unique process, supported by the family’s financial advisors. The facilitators role is to help plan and execute a program that best meets the needs of the family; coach the family in communicating more effectively; ensuring that the gathering’s design will manage, not quash, the concerns of all family members; and encourage collaborative and creative work on foundational agreements used to guide family interaction and decision-making. 

If these elements are managed well, the gathering will be productive and even transformational.

What are the foundational agreements a family might work toward? The answer is unique to each family, but may include establishing a family vision, formalizing a family charter and mission statement, creating agreements about family communication, and identifying family values and applying them to activities such as philanthropy.

While this is serious work, these events should also be fun and energizing. A person skilled in family facilitation will know how to pace the gatherings, bring everyone into the conversation and, if necessary, manage conflict productively.  

After this foundation is established, family gatherings can begin to focus on implementing the family by creating workable structures and deepening family culture. After a while, the need for the facilitator will fade.

Whom To Invite

In the first family gathering, it is usually best to include all of the adults in as many generations as possible. The initial gathering should be designed to create agreements sufficient to move forward and provide a foundation for later including older children. Because the gatherings are focused on the long-term vision for the family, spouses and long-term partners should be included. It is typically not advisable to talk about money, investments or business interests in the first few family gatherings. These topics may be reserved for family business meetings, which are less like retreats, more agenda-driven and which may include fewer family members.

Subsequent gatherings should include older children and young adults. Younger children should be brought into later gatherings, possibly through chaperoned, fun activities that would allow cousins to share memorable experiences.

 

Where To Hold The Meeting

Family gatherings are special events. They are fun as well as purposeful. They should not be held in a conference room because they are not business meetings. They should also not be held in the parent’s home, which is rarely neutral territory no matter how cohesive the family is. Retreat centers and resorts are often ideal places to hold gatherings. If this is not possible, the next best alternatives are conference centers or hotels in urban areas. Ideally, there should be access to the outdoors and plenty of space to spread out and engage in physical activities.

The best meeting spaces will have two areas or rooms: one where tables are available for individual and smaller group work and another open area with a circle of chairs or a living-room-like setting. 

How To Be Productive

The key to a productive family meeting is good facilitation.  A good facilitator has extensive experience and will interview all participants—or at least key individuals in larger families—in advance and construct a program that will accomplish clearly defined goals agreed to by the facilitator and the family leaders. The design of the gathering is as important as the meetings. It should reflect creativity and innovation. The program should allow the family to address concerns, but in ways that will minimize destructive conflict. Finally, the design must have clear and definable outcomes that can be achieved over time.

The best gatherings will result in agreements and commitments that support the common good of the family, foster effective collaboration and create accountability.

The facilitator should frame the day, manage the process, encourage engagement and work constructively with both family enthusiasm and conflict. Often, outside speakers—such as the family’s financial advisors—will join the family to discuss educational, cultural or philanthropic topics.  This serves to stimulate discussion in neutral yet interesting areas. 

The process should allow enough time to come to key agreements. Follow-up is almost always necessary. It should include meeting byproducts and individual post-meeting interviews to debrief, manage any lingering concerns and to anchor commitments.

Families that experience facilitated family gatherings report positive gains from the experience.  Members feel more fully engaged in a family process, inclusion is reinforced, expectations and challenges clarified, and the basis for further meetings and effective communication is established. While change may be modest, the family has begun the important process of defining itself, its values and how it will share information and make important decisions. Such a foundation will help build cohesion and collaboration, two essential elements necessary to ensure the long-term viability of the family and its interests.

Matthew Wesley ([email protected]) is founder of the Wesley Group and works with family leaders to address the complex impact of wealth on families.

Stephen Campbell ([email protected]) is managing director and head of the North America Family Office Group for Citi Private Bank.