Next-Gen Influence
The degree to which younger family members (children/grandchildren of wealth creator) actively shape or will shape investment strategy, governance, and decision-making.
Next-gen involvement signals future mandate shifts (often toward impact, ESG, technology, diversity), succession planning, and potential decision-maker changes worth tracking for long-term relationships.
Expanded Definition
Next-gen influence ranges from: no involvement (current generation retains full control), educational (next-gen attends meetings, learns process), advisory (next-gen has voice but no vote), voting (IC membership with decision power), to transitioning control (next-gen assuming CIO, principal, or governance leadership).
Influence typically increases gradually through: education programs, trial portfolios (next-gen manages subset of capital), committee participation, and formal succession planning. Next-gen often brings different priorities: stronger ESG/impact focus, technology sector preference, diversity requirements, transparency expectations, and different risk tolerance.
Signals & Evidence
Next-gen involvement indicators:
- Formal roles: Next-gen listed as IC members, investment team roles, board positions, trustee designations
- Public presence: Speaking at conferences, quoted in articles, active on LinkedIn discussing family office topics
- Education programs: Next-gen enrolled in FO courses, family office networks, governance training
- Trial portfolios: Dedicated next-gen allocation, impact fund, venture portfolio managed by younger generation
- Succession planning: CIO search criteria mentioning next-gen transition, governance restructuring, wealth transfer discussions
Decision Framework
- Influence assessment: Map next-gen roles (observer vs advisor vs decision-maker), portfolio control, succession timeline
- Engagement strategy: For established next-gen influence, engage directly; for emerging influence, educate both generations
- Mandate anticipation: Next-gen preferences (impact, tech, diversity) often signal future mandate evolution
Common Misconceptions
"Next-gen always pushes impact/ESG" → While common, some next-gen prioritize growth, liquidity, or continuation of family business focus. "Next-gen = inexperienced" → Many bring professional investment backgrounds, MBAs, operating experience before joining FO. "Current generation resists next-gen" → Most founders actively cultivate next-gen involvement through education and trial allocations.
Key Takeaways
- Next-gen involvement signals mandate evolution (often toward impact, ESG, tech) and upcoming decision-maker changes
- Assess influence level (educational vs advisory vs voting) to determine engagement strategy
- Build relationships with next-gen early; they're often future decision-makers and influence current priorities even without formal power