Over the years, the question of what an advisor’s role should be in a family office has come up multiple times, especially with more families—both large and small—expressing interest in setting up family offices. It’s important to clarify that when I refer to an advisor here, I mean an individual rather than an institutional advisor. Having spent nearly three decades working closely with two prominent North Indian business families—namely, the Munjal family (Hero Group) and Dr. Singh’s family (Ranbaxy)—I’ve had the opportunity to understand deeply what an advisor’s role entails and how to foster a productive, values-driven relationship. The role must replicate the qualities of Vidhur in Mahabarat.
Key Learnings on the Role of a Family Office Advisor
- The Desire for an Advisor Must Be a Genuine Need: For the advisor’s role to be meaningful and effective, the family must genuinely feel the need for such a relationship. It cannot be something externally imposed or suggested without the family’s full buy-in. When the family itself recognizes the need, they engage more wholeheartedly in the process. This felt need often stems from the complexities of managing wealth, succession, and family dynamics, and only by recognizing these challenges can the family benefit from having a trusted advisor by their side.
- DilSe Connection and Alignment on Softer Aspects: One of the most important elements of an advisor’s role is building a DilSe connection with the family. This means there must be emotional alignment, trust, and understanding on softer aspects such as values, aspirations, culture, and philosophy. It’s not just about managing wealth or investments—it’s about being aligned with the family’s purpose ( soul) core human values ( heart ) core business values and thinking ( the brain) and core operating philosophy with external stakeholders ( karma / body) . The process of building this connection should happen naturally within a few interactions. If alignment and trust take too long to develop, it may be worth reconsidering the fit and exploring other advisor options.
- Advisor as a Clone of the Decision Maker and a Dost: A good advisor must be almost a “clone” of the family’s decision maker(s) in terms of understanding their mindset, priorities, and style of decision-making. At the same time, the advisor should be a Dost—someone the family can trust completely, confide in, and rely upon during both good times and challenging moments. Additionally, there are times when the advisor needs to assume the role of a learner, humbly learning from younger members of the family, embracing new ideas, and fostering an environment of mutual growth and respect.
- Trust, Independence, and Unbiased Counsel: The advisor must be trusted and respected by all, or at least most, family members. Beyond being trustworthy, the advisor needs to maintain a position of independence and provide unbiased counsel. This objectivity is critical, particularly when family dynamics are at play, or when there are differences in opinions among family members. The advisor often serves as a bridge during difficult conversations, offering a balanced perspective that seeks to unite the family and create win-win solutions.
- Understanding Both Stated and Unstated Needs: A mature advisor must be able to understand not only the stated desires and expectations of the family but also those that are left unsaid. Often, family members may not articulate their deepest concerns, aspirations, or anxieties openly. The advisor must be adept at interpreting these unspoken dynamics and addressing them in a thoughtful, sensitive manner. This understanding helps the advisor provide more meaningful counsel and ensures that decisions are aligned with the family’s true needs and aspirations.
- Jack of All, Master of Some: While the advisor may need to have a broad understanding of various areas (wealth management, business, governance), they should be particularly skilled in a few critical areas that matter most to the family’s goals. It is essential that the advisor brings specialized knowledge or a network of resources that can be leveraged to address the family’s specific needs. The advisor should also have the experience and judgment to know when external expertise is required, ensuring the right people are brought in to handle key projects or challenges.
- Defining Scope, Roles, and Expectations Clearly: Before formalizing the relationship, it is important for both the family and the advisor to agree on the scope of work, roles, expectations, and priorities. This should be a thoughtful process, with ample discussions to ensure comfort and trust from both sides. Given the sensitive and confidential nature of family office matters, it’s essential to establish clear boundaries and responsibilities upfront, ensuring that the advisor is well-positioned to provide valuable insights while maintaining privacy and discretion.
- Availability and Responsiveness: The role of a family office advisor is deeply personal, and their availability is crucial. The advisor should be responsive to the family’s needs and ideally limit their mandates to just a couple of families. This ensures that the advisor can dedicate the necessary time and attention to each family, maintaining a high level of engagement and responsiveness. For large families with significant wealth or complex dynamics, the advisor’s full commitment and availability can make a significant difference in the quality of decisions made and the overall success of the family office.
Conclusion
At the heart of the family office, the advisor must be a true extension of the family. Their role is not simply to manage wealth but to support the family holistically advising on decisions, fostering alignment, and ensuring that the family’s values and long-term goals remain at the forefront. The advisor’s success depends on their ability to offer balanced, unbiased views while considering the desires, needs, and expectations of the family. Ultimately, the key is mutual alignment on values, a shared vision for the future, and a deep personal connection (DilSe) that enables both the family and the advisor to work together to create lasting solutions and achieve their collective goals.
By functioning as a trusted Dost and skilled advisor, with independence, expertise, and an understanding of both the tangible and intangible needs of the family, the advisor helps the family navigate the complexities of wealth, governance, and legacy.
Amended, October 2024