The founders of family offices often want the family’s collective investments to keep the family together for subsequent generations. But family cohesion is not always that simple.
“You have this naturally occurring diversity that starts to happen,” said Steve Lytle, family shareholder of The Agnew Company. “People become socioeconomically different, they marry differently, they have different expressions of faith and political perspectives. At some point, the glue that originally bound the group together dissipates, and those families start to re-nuclearize and become a different thing.”
Lytle has seen these challenges in his own family in the fourth and fifth generations.
“We have radically different political beliefs in our family — both radical liberals and radical conservatives,” Lytle said. “We have urban and rural people. We have different expressions of faith, from atheists to people who work in the mission field.”
Is it still possible to use the family office and collective investing as a way to keep the family connected?
“This is the interesting work for me,” Lytle said. “Investing is great, but what really matters is finding again that place of overlap around visions, values, principles, and desired outcomes. While we’re an investment company, at the end of the day, more than being about asset allocation and returns, the real work is, ‘How are we producing wellbeing?’”
The effort may not always be successful.
“If there isn’t enough shared vision, there comes a point where you’re better off creating relief valves so people can go and pursue their dreams outside, instead of being lashed to the mast of somebody else’s previous vision or dream,” Lytle said.
But the family office can provide a structure and possibilities for finding ways to maintain family connections.
“What we’re trying to do is to use the family office as a vehicle,” Lytle said. “You’re trying to do two things at the same time: first, provide a launch pad for individual family members to pursue their dreams, and at the same time, you’re creating this Venn diagram where there’s enough ‘there’ in the center for the entire family to cohere around.”
One way to promote family cohesion is through investments that appeal to diverse family members.
“On the one hand, any investment we make must fit our strategy as expressed in our investment policy and asset allocation,” Lytle said. “At the same time, we’re looking for investments — always within the strategy, mind you — that fuel interest or engagement from the shareholders: investments that they are more likely to be interested in. For example, we have a direct investment in a sportswear company that sells products that our family members can use or see out in the marketplace. It feeds a little pride of ownership that fuels engagement.”
