In the world of family offices, where generational wealth meets intricate financial planning, the alignment between financial advisors and their clients emerges as a cornerstone of success. Yet, beneath the surface of these partnerships, a complex web of psychological dynamics, information asymmetry, and hidden costs threaten to unravel the very fabric of wealth preservation and succession planning.

Unveiling the Hidden Costs of Advisory Relationships

At the heart of every family office-advisor relationship lies the potential for agency costs — expenses borne from conflicts of interest where advisors prioritize personal gains over client interests. This misalignment can significantly inflate the costs to the client, not just financially but also in the efficacy of the advisory service. The culprit of this unfortunate situation is often information asymmetry.

Bridging the Information Divide

Information asymmetry is a state where one party holds more information than the other. This imbalance often leads to decisions that aren’t in the best interest of the client, but it also makes advisors restrained, according to science. Information symmetry leads to better and more independent decision-making, but it also provides a positive feedback loop for advisors, in which they can feel increasingly more competent and helpful. Advisors want to be part of a larger success story, as established by research. In that way, alignment creates an emotional investment that decreases agency costs significantly. Besides being of huge benefit to the client, alignment also serves the advisor in becoming a trusted advisor, or potentially The Most Trusted Advisor – and possesses a wealth of knowledge that makes him irreplaceable. Better information symmetry also requires multiple information sources, as found by a 2015 study, which means advisors should strive to foster communication with multiple family council members This approach is also crucial for successfully assisting the succession of the family business.

The Role of Alignment in Succession Planning

When it comes to succession planning, a surprising insight emerges: accountants, rather than lawyers, are often better positioned to guide family offices through the intricacies of generational transition. Their close ties to the operational aspects of the business and understanding of the family’s financial landscape make them invaluable allies in ensuring the continuity of the family legacy. At the same time, financial advisors are not trained to navigate the emotional aspect of these transitions, often trying to stay clear of the complications that their involvement might bring. The process of succession planning is often tainted by differing interests and approaches of the family council members, and advisors rightly fear that their involvement in such politics could be detrimental to their position. However, the avoidant approach holds some dangers too: if the alignment between the principal and the most trusted advisor is not transferable to the next generation, the latter might lose his unique status. Avoidance could also lead to financial loss if the advisors fail to provide the objective, outsider view that could help the family business. It’s proven that a trusted advisor may have the possibility to share direct feedback with the principal in ways family members couldn’t.

The Missing Component: Soft Skills

The discussion also highlights a frequently overlooked aspect of advisory services: emotional intelligence. Advisors often excel in technical skills but may lack the emotional acumen to navigate the sensitive waters of family dynamics and succession. As research shows, listening is the skill families search for the most in their advisors, often in vain. The apparent lack of soft skills in their advisors turns family members away from discussing personal topics. Addressing this gap could not only enhance the quality of advisory but also solidify trust and alignment between advisors and family offices.

We are currently developing a tool to mitigate these challenges, aiming to harmonise advisor-client objectives through shared understanding and collaboration. The Family Council Canvas will serve as a virtual board where you can collect and organize information to create a common strategy and goals for the family council. If you would like to receive updates on The Family Council Canvas, please subscribe to the mailing list below.

The Path Forward

As family offices continue to evolve, the need for advisors who can navigate the technical, emotional, and ethical complexities of wealth management becomes increasingly critical. The journey towards true alignment requires advisors to engage deeply with their clients, fostering environments of mutual learning and transparency. In doing so, advisors not only ensure the prosperity of the family’s financial assets and ensure their position as a trusted advisor but also contribute to the enduring legacy of its values and visions.


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Cesaroni, F.M. and Sentuti, A. (2017) ‘Family business succession and external advisors: the relevance of “soft” issues’, Small Enterprise Research, 24(2), pp. 167–188. Available at:

de Groote, J.K. and Bertschi-Michel, A. (2021) ‘From Intention to Trust to Behavioral Trust: Trust Building in Family Business Advising’, Family Business Review, 34(2), pp. 132–153. Available at:

Michel, A. and Kammerlander, N. (2015) ‘Trusted advisors in a family business’s succession-planning process—An agency perspective’, Journal of Family Business Strategy, 6(1), pp. 45–57. Available at:

Su, E. and Dou, J. (2013) ‘How Does Knowledge Sharing Among Advisors From Different Disciplines Affect the Quality of the Services Provided to the Family Business Client? An Investigation From the Family Business Advisor’s Perspective’, Family Business Review, 26(3), pp. 256–270. Available at: