Next-Generation Education for Multifamily Offices
The next generation needs more than a portfolio briefing. They need practical skills for stewardship, decision-making, security, philanthropy, and family communication. A well-designed education program gives younger family members context before they receive authority, and responsibility before they receive control.
Why education belongs inside the family office
A multifamily office coordinates work across several families. That can include investment management, financial planning, manager selection, estate coordination, philanthropy, reporting, and family governance. Education connects those services to the people who will eventually make decisions.
The goal is not to turn every family member into an investment professional. The goal is to help each person understand the decisions they may face, the people involved, and the consequences of acting without a process.
A strong program begins with the family’s purpose. Some families want younger members to understand a business. Others want them to prepare for trusts, foundations, real estate, or a family investment committee. The office should map lessons to those responsibilities.
Education also reduces avoidable confusion. A family member who understands a capital call, liquidity reserve, or investment policy can ask better questions. A family member who understands confidentiality and cybersecurity can reduce operational risk. A family member who understands the family’s values can participate in philanthropy with more discipline.
The SEC describes Form ADV as the primary disclosure document for registered investment advisers. It includes information about services, fees, conflicts, and business practices. Families can use the same habit of clear disclosure in their own education programs: explain who makes a decision, who provides advice, how a fee works, and where a conflict may arise. Source: U.S. Securities and Exchange Commission, Form ADV overview, https://www.sec.gov/foia/docs/form-adv.htm.
What the directory data shows
Our directory contains 1,760 multifamily office firms. Of those, 292 have published SEC Form ADV figures captured in the directory, using each firm’s ADV date.
Among those 292 firms, reported assets under management range from a 25th percentile of about $358 million to a median of about $921 million and a 75th percentile of $3.08 billion. The largest reported figure is $117.5 billion. These figures describe the firms included in the directory’s SEC ADV sample. They do not represent the full global multifamily office market.
The service mix helps explain why education must cover more than asset allocation. The directory records 279 firms offering portfolio management for individuals or small businesses, 213 selecting other advisers, 207 providing financial planning, 141 managing institutional portfolios, and 126 managing pooled vehicles. It also records pension consulting, educational seminars, newsletters, and publications.
Fees also vary. In the directory’s ADV sample, 289 firms report a percentage of assets under management, 209 report fixed fees, 110 report performance-based fees, and 95 report hourly fees. A younger family member should be able to describe the difference between these arrangements and ask what service each fee pays for. Every number in this paragraph comes from the MultifamilyOffices.com directory SEC ADV figures, https://multifamilyoffices.com/.
That way they inherit money by creating money. They inherit money by stretching themselves, growing and doing something productive in society, not just getting money to spend on toys and fun condos that might go down in value and are overly expensive to get into, et cetera.
Build a curriculum around real decisions
A useful curriculum follows the decisions a family may make. A practical curriculum has five tracks.
The first is personal financial capability. Cover cash flow, saving, debt, insurance, investing basics, and recordkeeping. Use a sample balance sheet and a simple annual budget. The exercise should show how spending, liquidity, and long-term commitments interact.
The second is family wealth literacy. Explain the family balance sheet at a level appropriate for the learner. Discuss operating companies, real estate, private funds, public markets, trusts, charitable entities, and cash reserves. Avoid presenting a list of holdings without context. A learner should know why an asset exists, what risk it carries, and how difficult it may be to sell.
The third is decision governance. Teach the difference between ownership, control, advice, and execution. A family member may own an asset without managing it. An investment committee may recommend a transaction without having authority to approve it. A trustee may have duties that differ from those of a beneficiary. Clear role definitions prevent informal promises from becoming family disputes.
The fourth is values and stewardship. Ask what the family wants its capital to accomplish. Discuss work, education, entrepreneurship, community support, and philanthropy. Values should appear in written policies and meeting practices, not only in family stories.
The fifth is professional judgment. Learners should practice comparing advisers, reading a proposal, identifying conflicts, and documenting a decision. The SEC’s investor education materials emphasize checking registration and understanding fees and conflicts before working with an investment professional. Source: Investor.gov, Investment Adviser Public Disclosure and choosing an investment professional, https://www.investor.gov/.
Teach through practice, not lectures alone
Lectures have a place, but practice builds judgment. A family office can create a quarterly case workshop with a short fact pattern and a written decision.
One exercise can involve a family business distributing cash while also considering an acquisition. Learners identify liquidity needs, decision rights, and information gaps. Another can involve a private investment that cannot be sold quickly. Learners compare the opportunity with the family’s cash commitments and risk tolerance. A third can involve a charitable grant request. Learners define the goal, evidence, budget, and follow-up.
Use an investment committee simulation for older participants. Give each person a role, such as beneficiary, trustee, chief investment officer, operating executive, or outside adviser. Require a short memo that states the recommendation, assumptions, risks, conflicts, and next review date.
A family office can also use a shadowing model. A younger member attends a meeting, reviews the agenda in advance, and writes a short summary afterward. The senior decision maker then explains what was omitted from the formal agenda and why. This exposes the difference between a presentation and an actual decision process.
Assess progress with observable work. Can the learner explain a fee? Can the learner locate a governing document? Can the learner describe a conflict? Can the learner prepare a meeting question? Completion certificates matter less than demonstrated judgment.
And one thing in common with decamillionaires is they learn things, try them, and then move forward quickly.
Make digital security part of family literacy
Cybersecurity belongs in every next-generation program because younger family members often use the largest number of digital services. Teach password managers, multifactor authentication, device updates, secure file sharing, travel precautions, and verification of payment instructions.
The National Institute of Standards and Technology recommends multifactor authentication as a way to reduce dependence on passwords alone. Families should apply that practice to email, financial portals, cloud storage, and social accounts. Source: National Institute of Standards and Technology, Digital Identity Guidelines, https://pages.nist.gov/800-63-3/.
Create a payment verification rule. A request to change wiring instructions should be confirmed through a known phone number or a separate trusted channel. A family office should document who can approve a payment, who can release it, and who reviews the record afterward.
Privacy training should cover public posts, location sharing, photographs, family names, and travel plans. The lesson should be practical and repeated. A single annual presentation is easy to forget. Short refreshers tied to real events work better.
Teach philanthropy as a form of governance
Philanthropy gives younger members a manageable way to practice stewardship. Start with a written grant process. Define the mission, eligible recipients, review criteria, approval authority, and reporting expectations.
Participants can review several fictional proposals and score them against the same criteria. They should discuss evidence, community voice, administrative cost, measurable outcomes, and unintended effects. The aim is disciplined generosity, not a competition for the most emotional story.
If a family uses a private foundation, learners should understand that the entity has legal duties and operating rules. The Internal Revenue Service explains that private foundations are subject to rules including annual filing requirements and excise tax provisions. Source: Internal Revenue Service, Private foundations, https://www.irs.gov/charities-non-profits/private-foundations.
A family office should keep charitable education separate from personal investment recommendations. The learning objective is to understand purpose, process, and accountability. The family can then decide how much authority to delegate as participants gain experience.
Design for different ages and interests
A single syllabus rarely works for an entire family. Children can learn through saving, giving, and simple tradeoff exercises. Teenagers can add budgeting, digital security, and an introduction to business ownership. Young adults can study credit, contracts, taxes at a general educational level, investment risk, and professional conduct. Adults entering governance roles need deeper work on fiduciary duties, reporting, conflicts, and family decision rules.
Interests also vary. One person may want to study operating businesses. Another may focus on philanthropy or environmental projects. Offer a common foundation, then allow electives. Every participant should understand the family’s purpose, decision rights, confidentiality rules, and escalation process.
The office should document participation and feedback. A short annual review can ask what the learner understands, what remains unclear, and which responsibility should come next. The family can then adjust the program without making education feel like a one-time test.
Choose advisers and measure quality
A multifamily office may use internal staff, outside educators, accountants, attorneys, investment professionals, or family governance specialists. Selection should start with scope. Ask what the educator will teach, what materials they will use, how conflicts will be disclosed, and how learner information will be protected.
The directory data shows that adviser selection is a common service. In the SEC ADV sample, 213 firms report selecting other advisers. Families should apply the same review discipline to education providers. Check registration where applicable, professional background, references, compensation, and any relationship with a product provider.
Measure the program with practical indicators. Track attendance, completed case work, quality of questions, document literacy, security habits, and participation in family meetings. Do not treat investment returns as an education score. A strong learner may decide not to invest, ask for more information, or recommend waiting.
A useful program creates a repeatable path from observation to participation to responsibility. Each step should have a defined scope, a named decision maker, and a review date.
Key takeaways
- Start with the decisions younger family members may eventually make.
- Teach fees, conflicts, governance, and security alongside investment concepts.
- Use case exercises and supervised participation to build judgment.
- Give philanthropy a written process with clear authority and review.
- Measure demonstrated skills and increase responsibility gradually.
FAQs
When should a family start next-generation education?
Start with age-appropriate lessons when children can understand saving, giving, and tradeoffs. Add governance, business, investment, and security topics as responsibilities grow.
Does every family member need investment training?
No. Everyone needs a common understanding of purpose, roles, confidentiality, and decision rights. Specialized investment training should match the person’s expected responsibility.
How can a family office tell whether education is working?
Use practical evidence. Review case memos, meeting questions, document comprehension, security habits, and the ability to explain fees, conflicts, risks, and next steps.
Sources
- U.S. Securities and Exchange Commission, Form ADV overview
- Investor.gov, Investment Adviser Public Disclosure and investor education
- National Institute of Standards and Technology, Digital Identity Guidelines
- Internal Revenue Service, Private foundations
- MultifamilyOffices.com directory SEC ADV benchmark data