Westwick recently sat with a family that destroyed, over a generation, close to a billion dollars of wealth built by their forebears. The root cause was not a bad investment, a market dislocation, or a fraud. It was disunion.
In a disunited family, the symptoms compound. Assets get fire-sold to meet the cash needs of one branch. Asset allocation fragments as each sibling pulls in a different direction. Controlled subsidiaries are over-leveraged to push cash upward. The family office, instead of being the instrument that holds everything together, becomes the theatre where the conflict plays out.
The principal of that family put it bluntly: "There is nothing more expensive than disunion." An engineer by training, he had even developed a mathematical formula for it (full disclosure, we are not sure we fully understood it), but it showed how deeply the disunion had hurt him.
The reality in wealthy families is rarely that complex: across the families that have outlasted three, four, five generations, one trait recurs: unity. It sounds boring. It is not optional.
Unity is not the output of a family office. It is the precondition. The office can support it, organise it, and give it the language to survive hard decisions. But unity itself must come from the family, from the top down, across generations. Where it is present, the family office is a multiplier. Where it is absent, no structure, however elegant, will save the wealth.
Further reading: governance as a tool for family unity — Westwick's white paper on governing single family offices.
Frequently asked questions
Why is family unity essential for a family office?
Family unity is the precondition for every other decision a family office makes. A divided family cannot make consistent investment decisions, cannot agree on governance, cannot present a coherent face to bankers and counterparties, and cannot transmit wealth to the next generation with any reliability. Unity is not a soft value. It is the structural requirement for everything else.
What destroys family unity in a family office?
The most common causes of family disunity in a family office context are: opaque decision-making that some branches perceive as favouring others; unequal treatment of family members in employment or distributions; the absence of a family council or governance structure to resolve disputes before they escalate; and the entry of the next generation without clear expectations or preparation. Most of these are preventable with the right governance.