‘Loaded words’ in the world of family offices

• Family office terminology and differences in meaning
• Seven trigger words
• Words losing and morphing meaning

The language in and around family offices and ultra-high net worth individuals (UHNWI) is filled with loaded and charged words, as well as phrases that elicit an emotional response and hold significant implications, positive or negative, beyond the literal meaning. Words such as legacy, impact, family governance, professionalisation, being trusted, and future-proofing have become buzz- and trigger-words, influencing and bearing strong connotations.

For most families and service providers, these terms hold strikingly different meanings. Consequently, UHNWI clients might miss out on the full extent of various service areas, as they would not know the extent of assignments and might receive inadequate guidance. Not having nuanced terms for the softer family office services brings further layers of complexity to the already complicated framework in which the ultra-affluent live and operate.

Family office terminology and differences in meaning

The system and creation of terms used in family office terminology and nomenclature are evolving. Service providers and clients continue to assign meanings and definitions to words. However, with no official jargon or classification in place with clear referencing and definitions, each stakeholder would have a different understanding of topics based on their individual fields of expertise, background, and role. Similar words are used across service areas, but the applications can be strikingly divergent, depending on who is using the words, for what purpose, and under what circumstances. To express specific views, the family office vocabulary is still very much in its infancy beyond the investments, legal, and overall financial endeavours.

Seven trigger words

Here are some commonly used words that have varying connotations, where both service providers and clients need to clarify context and establish a common understanding of what they mean:

• Principal, family principal—the word evokes a position of power when referring to a family member within a family entity or the UHNWI heading the family office or investment arm. The term is often misused by non-family executives who wish to receive and drive more credibility and pretend to have more responsibility than they actually do.
• Legacy—some refer to an old legacy system; others mention the business or an entrepreneurial or philanthropic legacy, as well as the values and history of a family or UHNWI. Legacy may also refer to financial and legal considerations and structures in place. For others, legacies are even more complex and hold many intersecting layers. Legacy may also become a marketing and branding-related buzzword for academics, practitioners, and service providers that can be added to any text to bring more gravitas to conversations and make the ultra-wealthy better about their achievements, instead of a word bridging many areas.
• Professionalisation—likely mentioned in the context of a non-family executive of a family office appointed to manage the office and family. The word suggests that families may not behave or conduct their affairs in a professional manner and that by bringing in non-family executives, the ‘professionalisation’ will make everything more successful. While this may prove to be true, a balance needs to be struck so that families do not lose their essence, which is their competitive advantage over peers and corporations.
• The different varieties of rich, wealthy, HNWI/UHNWI, ultra-wealthy, ultra-affluent, and billionaire—these words are supercharged and hold many negative connotations within the space, particularly in reference to tax breaks, inequality, privilege, and special access, to mention a few. For many wealthy people, these words trigger strong emotions. Discussions abound in different circles about how to reconfigure nomenclature, how to refer to wealth, and how to address and articulate what we want to address without causing offence to the ‘haves’ and the ‘have-nots’.
• Family governance—to bankers and lawyers, it means going through wealth and finance-related thinking and decision-making processes with their clients. This would include planning for different scenarios and successions and looking at structures, values, purpose, and mission. For philanthropic advisors, it means assessing and aligning donation activities and integrating the next generation for more engagement. For the one or two cultural scientists in the field, it means deeper family governance work, including traditions and family culture.
• Successions—similar to family governance, succession is very different for each professional who is serving families, and using just one word does not cover the extensive challenge and opportunity at hand.
• Privacy and safeguarding—being private and privacy may mean different expectations and connected considerations to most families and UHNWIs; hence, their needs will vary from family to family.

Words losing and morphing meaning

Some currently used overcharged and non-specific terms refer to intangible concepts and ideas in the world of family offices. This poses substantial risks to the already fragile areas of family communication, making it more difficult to understand one another and offer creative service opportunities that cater to the changing needs of family office principals.

Most practitioners who work in family offices are investment professionals, financiers, as well as lawyers, and corporate business professionals who predominantly use business jargon. This fact on its own is not helping families and UHNWIs navigate their private family affairs, businesses, investments, and other activities, which requires them to transform the meaning of words and processes and create new ones better suited to their expectations, especially for those of the next generation.

Zita Nikoletta Verbényi is the founder and legacy aesthete at The Legacy Atelier™, and also sits on the Wealth & Society Global Advisory Board.