Page 23 - Cerini & Associates Family Office Guide
P. 23

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.
                                                      CONTINUED ON NEXT PAGE








 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.


 21                                                                        22
   18   19   20   21   22   23   24   25   26   27   28