Page 23 - Cerini & Associates Family Office Guide

DEVELOPING AN EFFECTIVE INVESTMENT STRATEGY:
THE WEALTH DEFINING THE INVESTMENT STRATEGY’S PURPOSE, GOALS, AND OBJECTIVES

Several factors influence the investment strategy of a family office:
PYRAMID ► The Family’s Background: Understanding the origins of family wealth and its growth

trajectory.
Shared Values and Purpose: Establishing a values-driven approach to wealth
►
management, ensuring alignment with generational perspectives and long-term legacy
planning.
► Challenges of Conventional Approaches: Addressing the common risk of wealth
dissipation within three generations through strategic planning and governance.
► Building on Values and Vision: Encouraging intergenerational engagement to sustain
and grow the family legacy.
RISK MANAGEMENT

Risk management is a cornerstone of a family office’s investment strategy. Key
considerations include:

► Understanding Risk and Return: Avoiding unnecessary risks while achieving desired
financial outcomes.
► Family Risk Attitude: Defining risk tolerance to shape investment decisions.
► Additional Risk Considerations: Addressing potential threats such as divorce, tax
implications, and regulatory changes.
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THE FAMILY OFFICE INVESTMENT POLICY AND PROCESS

Developing a well-defined investment policy and establishing a structured investment
process is essential for the effective management of a family office’s wealth. The
investment policy should align with the family’s goals, risk tolerance, and values to
ensure long-term financial sustainability and intergenerational wealth preservation.
THE ELEMENTS OF A FAMILY OFFICE INVESTMENT STRATEGY

A robust family office investment strategy incorporates several key elements, including
defining investment objectives, risk management, asset allocation, and investment
monitoring.
WHERE SHOULD YOU START?

When developing an investment policy, family members must outline clear processes
that effectively manage family wealth. This begins with defining the strategy’s purpose,
goals, and objectives.

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