Family governance: a new pillar of wealth management

For a long time, wealth management was the reserved territory of the “head of the family” and his or her advisers. The overall strategy was defined by this duo, or trio if the couple happened to jointly supervise their private business management with their advisers.
There was little or no room for subsequent generations to be involved in this wealth management, and often the death of one or other parent sounded the death knell for the strategy that had been carefully established over previous years. With the expectations of all members of the family not being taken into consideration, each generation was forced to implement their own wealth strategy.


Do so as to not undo


These drawbacks in wealth management were exacerbated when the strategy had to incorporate the long-term development of a family business.
The need for global and cross-generational supervision thus became obvious to many families and their advisers, and “family governance” became an important part of wealth management.
Family governance has two strategic dimensions, one related to family wealth management, and the other to the development and transfer of the family business, if there is one.

Parents, children, grandchildren and their advisers must build family governance based on certain pillars, to ensure it is implemented in the best conditions:

    • Jointly identify the affectio familiae that will drive future governance. Like affection societatis, which typifies the desire for a joint project among company partners, affectio familiae embodies the common desire of members of the same family to work together.
    • Encourage each generation to take ownership of this affectio familiae, giving family governance its full cross-generational dimension
    • Agree on a shared vision of family wealth management, and even the long-term development of the family business, if there is one
    • Select, with the support of the family’s advisers, the tools to monitor governance (family charter, family council, project reporting, etc.)


Facilitate governance to make it sustainable


Once the family governance has been set up, it will only be meaningful if each member of the family and their advisers bring it to life. Particular attention will be paid to the preparation of governance meetings or seminars organised for specific topics. The involvement of family members will naturally be gradual across generations, but regular and comprehensive intra-family communication will be an essential component of governance.




Family governance will only make sense in the presence of an active approach to training “new” generations. The training of the youngest family members will allow them both to take ownership of the general functioning of governance, and to unite them around the common project to manage and develop family wealth.




In order to be able to anticipate the various transmission scenarios, family governance will be a major asset. On the one hand, governance should consider family wealth management from a multi-generational perspective and thus avoid any future conflict. On the other, the role of governance will also be to analyse the future of the family company’s shareholding. For reasons of personal interest, skills or location, future generations are not always inclined to take over the family business. In this case again, family governance will resolve many potential problems. Well-organised governance will thus have anticipated the conditions for transferring decision-making power outside the family circle without imposing the sale of company capital. Alternatively, governance will also help anticipate who among the “new generations” will be able to take on a decision-making role in the management of the family business.


The intervention of Banque Havilland


Our team of wealth planning experts will be able to support you in your family governance strategies. This support will be carried out in close collaboration with your advisers (lawyers, notaries, tax experts, etc.) in order to offer you the global solution that is best suited to your needs.


Bastien Perrine
Director of Professional Services, Private Banking
Banque Havilland
( source: Luxemburger Wort (French version))