When families think about wealth, they rarely view it as purely financial, but rather as something closely intertwined with values, traditions, and ambitions. Wealth is both their legacy and their responsibility. The enterprise itself is not just an asset, either, but a part of who they are. Their sense of identity, loyalty, and belonging is often inseparable from the business itself. That closeness is a source of strength, but it also clouds perspective. Objectivity becomes elusive when decisions about leadership, strategy, or succession feel like decisions about the self.
This is why families need outside perspectives — advisors who can bring clarity, structure, and balance. Yet even here, lies a challenge: few outsiders can fully grasp the complex weave of business goals, emotional ties, and hidden family dynamics. The financial advisor who succeeds in this role is someone who can translate between the logic of the firm and the insider language of the family (Strike, Michel & Kammerlander, 2018; Salvato & Corbetta, 2013).
Balancing Logic and Emotion
Family enterprises exist at the intersection of two distinct worlds. On one side is family logic: decisions based on loyalty, trust, tradition, and the desire to protect relationships. On the other side is business logic: a focus on performance, merit, and measurable results. Both are important, but they don’t always align.
Socioemotional wealth (SEW) captures this family-centred dimension, the pride and meaning families attach to their businesses. It’s what makes them value continuity and legacy even above financial gain. But when SEW is missing or mismanaged, blind spots can emerge. Families may avoid tough conversations, resist change, or cling to tradition at the expense of innovation (Kosmidou & Ahuja, 2019).
Here is where professional advisors play a critical role. They bring the objectivity and structure that families often struggle to create on their own. Their guidance helps families evaluate successors by competence rather than birth order, design governance systems that balance fairness with efficiency, and introduce practices that keep the business resilient in changing times (Harrington & Strike, 2018).
Emotional intelligence adds another layer. Advisors who can listen actively, read unspoken concerns, and navigate tensions with empathy are often the ones who make the biggest difference. They sense when fear of letting go is behind a founder’s resistance, or when sibling rivalry is fueling a debate. Advisors bridge the gap between logic and emotion by combining professional expertise with emotional awareness. This mediation process helps families make sound decisions without losing sight of their values (Gómez-Betancourt et al., 2014; Quarchioni, Ciccola & Chiucchi, 2022).
Trusted Advisors and Mediated Sensemaking
Not every advisor earns the position of being truly trusted. In family enterprises, those who do are often called Most Trusted Advisors (MTAs). Their expertise is not only technical but also relational. They are the ones families turn to when the stakes are high, because they can see the whole picture: the finances, the governance, and the subtle family undercurrents (Strike, 2013).
What makes MTAs so effective is their ability to slow the process down. Strike and Rerup (2016) call this mediated sensemaking, the process of creating space for reflection, encouraging family members to consider multiple perspectives, and helping them recognise the complexity of the choices before them.
Instead of pushing for quick fixes, MTAs guide families through conversations that uncover what is really driving disagreements. They listen for what isn’t said out loud: the fear of losing influence, the resentment of being left out, the hope of proving oneself. By surfacing unspoken concerns, they help prevent hasty or emotionally charged decisions.
In practice, MTAs might encourage a family to pause before making an investment decision, to reconsider how a conflict is framed, or to experiment with new ways of involving the next generation. Their influence is subtle, but profound: they protect the family from rash choices while preserving unity and long-term resilience (Strike, 2013; Strike & Rerup, 2016).
This role demands trust. Without trust, advisors remain on the surface, limited to numbers and technical advice.
The Succession Dilemma
Succession is often described as the greatest challenge family enterprises face. It’s not just about who will take the top job. Succession is a decisive turning point that determines whether the family’s legacy will continue in the same spirit. The transition touches every layer of family and business life, from financial strategy to personal identity.
In theory, succession should follow a straightforward path: the founder chooses a successor, the family agrees, and the next generation takes the reins. In practice, it is rarely so smooth. Successions stall for many reasons: a founder reluctant to let go, siblings competing for influence, successors unprepared for the responsibilities, or simply a lack of clear planning (Bakiewicz, 2020; Handler, 1990).
When succession discussions break down, the risks are high. Families may face fragmented wealth, disrupted leadership, or conflicts that leave lasting scars. Even more damaging is the erosion of trust when family members feel excluded, overlooked, or silenced.
This is where advisors and family offices step in to revive the process. They can help families return to the table with renewed purpose by creating structured plans, mediating conflicts, and opening channels of communication. Regular meetings, clear role definitions, and formal governance structures — such as family councils — provide stability and accountability (Capgemini, 2024; Strike, Michel & Kammerlander, 2018).
Most importantly, advisors help both sides of the transition find a way forward. For founders, that might mean stepping into a mentor role rather than disappearing overnight. For the next generation, it might mean gradually taking on responsibilities until they are ready for the full weight of leadership. In this way, succession becomes less of a single dramatic handover and more of a carefully managed journey.
Preparing the Next Generation
A succession plan is only as strong as the people it prepares. Too often, successors are chosen because of birth order or family expectation rather than readiness. Without the right preparation, even talented heirs can feel overwhelmed when the time comes to lead.
Advisors and family offices play a central role in this preparation. Sometimes it starts small: involving the next generation in family councils, philanthropic projects, or investment committees. These early experiences give them a voice, help them build skills, and create a stronger sense of connection to the family’s mission (Handler, 1990; Salvato & Corbetta, 2013).
Other times, the process requires more deliberate design. Advisors may recommend structured mentorship, leadership incubators, or shadowing opportunities, where successors observe and learn from current decision-makers. In more urgent situations, a “bridge leadership team” — made up of trusted executives or advisors — can temporarily share responsibility while the successor grows into the role (Bakiewicz, 2020).
Knowledge transmission is another essential element. As Grubman and Jaffe (2010) suggest, families benefit when advisors curate resources (books, case studies, workshops) that help successors understand not just financial management, but also governance, communication, and conflict resolution. With coaching and discussion, these resources become tools the next generation can apply in practice.
Finally, leadership is not only about strategy, but also about emotional balance. Preparation must also include the emotional side. Successors need confidence, resilience, and the ability to manage pressure. Advisors can support this by encouraging peer networks, resilience coaching, or even mindfulness practices.
The Advisor as Transitional Leader
Even when a successor is chosen, legitimacy does not come automatically. Inside the family, siblings may question whether the choice was fair. Within the business, employees may wonder if the new leader has earned their place or simply inherited it. Outside stakeholders, too, may hesitate to trust someone who is still seen as “the founder’s child.”
This is where external advisors can play a unique role. Salvato and Corbetta (2013) describe this as transitional leadership: a temporary support system where the advisor acts as mentor, sounding board, and even defender of the successor’s position. The advisor helps the next generation step into leadership while gradually withdrawing, so that authority is fully transferred.
Three building blocks are critical in this process:
- Individual Internalisation: The successor must see themselves as a leader and commit to the role. Advisors support this by mentoring, identifying skill gaps, and building confidence.
- Relational Recognition: Others in the organisation must accept the successor as a legitimate leader. Advisors can create opportunities for the next-gen to prove themselves, building trust step by step.
- Collective Endorsement: The wider family must back the transition. Advisors can defend the successor from criticism, mediate tensions, and remind family members of their shared vision (Salvato & Corbetta, 2013).
In practice, this means the advisor often works behind the scenes: promoting the successor’s strengths, diffusing conflicts, and encouraging family members to rally around the new leader. Just as importantly, they know when to step aside. A graceful exit is what ultimately confirms the successor’s authority.
The Overlooked Side of Wealth
When families talk about wealth, the conversation often centres on assets: businesses, properties, investments. Yet this is only half the picture. Liabilities — debts, obligations, and risks — are just as important, and often far more complex to manage.
Research shows that even confident, financially savvy clients can struggle when it comes to liabilities. They may underestimate risks, avoid difficult conversations about debt, or focus so much on growing assets that they neglect the other side of the balance sheet (Sommer & Lim, 2022).
Advisors bring a critical perspective here. They help families map out liabilities clearly, integrate them into overall planning, and design strategies that safeguard the entire wealth pool. This might involve refinancing debt, stress-testing financial plans under different scenarios, or ensuring liquidity to handle unexpected obligations.
Advisors prevent hidden risks from undermining the family’s legacy by addressing liabilities with the same attention given to assets. True wealth management is not only about what a family owns, but also about what it owes.
Conclusion
Wealth in a family enterprise is a living legacy, shaped by tradition and ambition. But that very closeness makes it hard for families to stay objective. Decisions about succession or governance feel deeply personal, and what is at stake is not only financial continuity but also trust, belonging, and shared purpose.
This is why advisors matter so much. They act as interpreters between the logic of business and the language of family. Their role is both technical and relational. They help families professionalise succession planning, manage emotional dynamics, and prepare the next generation with financial literacy, but also with resilience, confidence, and a sense of purpose. Above all, they provide clarity and balance in moments where families risk losing sight of the bigger picture.
In this way, financial advisors are bridge-builders — between past and future, tradition and innovation, emotion and reason. Their quiet influence ensures that wealth is preserved and passed on with wisdom, trust, and vision.
References
Bakiewicz, A. (2020) ‘Cultural Embeddedness of Family Business Succession. The Perspective of Next Generation’, International Journal of Contemporary Management, 19(1), pp. 7–27. Available at: https://doi.org/10.4467/24498939ijcm.20.001.12666.
Capgemini Research Institute for Financial Services (2024) Wealth Management Top Trends 2024. Available at: https://www.capgemini.com/insights/research-library/wealth-management-top-trends-2024/
Gómez-Betancourt, G., Gamba, D., Franco-Santos, M., & Lucianetti, L. (2014) ‘Emotional intelligence in family firms: Its impact on interpersonal dynamics in the family business and ownership systems’, International Journal of Entrepreneurship and Small Business, 21(1), pp. 25–45.
Grubman, J., & Jaffe, D. (2010) Family Wealth Continuity: Building a Foundation for the Future. Wiley.
Handler, W.C. (1990) ‘Succession in Family Firms: A Mutual Role Adjustment between Entrepreneur and Next-generation Family Members’, Entrepreneurship Theory and Practice, 15(1), pp. 37–52. Available at: https://doi.org/10.1177/104225879001500105.
Harrington, R. J. & Strike, V. M. (2018) ‘The paradigm shift in family firm succession: From tradition to meritocracy’, Journal of Family Business Strategy, 9(4), pp. 223–235.
Kosmidou, K. & Ahuja, S. (2019) ‘Professionalisation and innovation in family firms: The role of socioemotional wealth’, Family Business Review, 32(3), pp. 259–276.
Quarchioni, S., Ciccola, R., & Chiucchi, M. S. (2022) ‘Advising in Family Firms: Shaping Relational Dynamics and Trustful Connections in Strategy Work’, Family Business Review, 35(4), pp. 338–360. https://doi.org/10.1177/08944865221124356
Salvato, C. & Corbetta, G. (2013) ‘Transitional leadership of advisors as a facilitator of successors’ leadership construction’, Family Business Review, 26(3), pp. 235–255. https://doi.org/10.1177/0894486513490796
Sommer, M. & Lim, E. (2022) ‘Family wealth and liabilities: An overlooked challenge’, Journal of Wealth Management, 25(2), pp. 45–57.
Strike, V. M. (2013) ‘The Most Trusted Advisor and the Subtle Advice Process in Family Firms’, Family Business Review, 26(3), pp. 293–313. https://doi.org/10.1177/0894486513492547
Strike, V. M., Michel, A., & Kammerlander, N. (2018) ‘Unpacking the black box of family business advising: Insights from psychology’, Family Business Review, 31(1), pp. 80–124. https://doi.org/10.1177/0894486517733847
Strike, V. M. & Rerup, C. (2016) ‘Mediated Sensemaking in Family Firms: The Role of Most Trusted Advisors’, Academy of Management Journal, 59(3), pp. 880–905. https://doi.org/10.5465/amj.2012.0665
