Complexity is everywhere. And nowhere is its forward march more evident than in the field of investing. Seemingly unabated, the complexity of new products, processes, financial engineering and innovation grows.
And if you think investing is complex, take a moment to reflect on the dynamics of family relationships. Families evolve organically and acquisitively. And with every generation or addition, new personalities and opinions can emerge, complicating matters through conflicting agendas and differing priorities.
The coalescence of these domains – family and investing – can be the catalyst for the establishment of a family office. Few vehicles can assist in managing the complexity that families of scale face as effectively as a family office. Families aren’t homogenous and, depending on where they are in their lifecycle, may have myriad needs: formulating a family constitution; reviewing investment governance; undertaking estate planning or philanthropic activities, to name but a few. The family office agenda can be wide, dynamic and, well, complex.
Psychologist Daniel Kahneman, Nobel laureate in economics (2002) and author of Thinking, Fast and Slow, has evidenced how the framing of complex problems affects our decision-making. So why is complexity so pervasive?
You can read Relatively simple here.