Deciding whether your children or family members are ready to join or take over the family business is one of the most pivotal choices you’ll face as a business owner. It’s a decision that goes far beyond just qualifications—it impacts the future of your company, the dynamics within your family, and the legacy you hope to leave behind. Evaluating readiness takes careful consideration, introspection, and, often, conversations that aren’t always easy but are vital to helping work towards long-term success for both the business and the family.

Assessing Personal Interest and Commitment
The first and perhaps most important consideration is whether your children or family members truly want to be part of the family business. Interest and passion are foundational elements of success. Without genuine enthusiasm for the work, they may struggle to remain engaged or to weather the inevitable challenges of running a business.

It’s also essential to evaluate their commitment. Do they understand the demands of the role they’re stepping into? Joining or leading a business often requires long hours, difficult decision-making, and a willingness to put the needs of the company first. These are not responsibilities to be taken lightly, and their willingness to embrace them can be a strong indicator of readiness.

Ask questions like:

• Are they willing to work their way up, or do they expect to start at the top
• Do they have a long-term vision for themselves within the business?

Open conversations around these topics can clarify not only their intentions but also whether their motivations align with the business’s needs.

Evaluating Skills and Experience
While personal interest is crucial, it must be paired with the right skillset and experience. Consider whether they’ve acquired the tools necessary to succeed in their role. Have they pursued relevant education? Degrees in business management, finance, or industry-specific areas can serve as a strong foundation.

Experience, particularly outside the family business, can be even more valuable. Working in other companies allows them to develop new skills, build professional confidence, and gain perspectives that can benefit your business. Many family businesses encourage the next generation to spend a few years working elsewhere before joining. It gives them the chance to establish themselves outside the family dynamic and learn how businesses operate in a variety of environments.

Once they’re ready to join, creating a pathway for development within the family business is equally important. Rather than immediately stepping into a leadership role, encourage them to take on smaller responsibilities first. This approach not only helps them gain hands-on experience but also builds credibility with other employees.

Understanding Leadership Qualities
For family members who aspire to leadership roles, assessing their ability to lead effectively is essential. Leadership is about more than just decision-making—it’s about inspiring and managing people, navigating conflict, and maintaining composure under pressure. Do they have the communication skills to build trust with employees? Are they decisive yet open to feedback?

Emotional intelligence is another critical trait. Leaders who can manage their emotions, empathize with others, and handle interpersonal challenges with grace are better equipped to lead a team and maintain a positive company culture. Pay attention to how they handle stress and resolve disagreements—these moments often reveal whether someone is ready to lead.

Compatibility with Family and Business Values
Family businesses are often built on shared values, and continuity of those values is critical to sustaining the legacy. Assess whether the family members you’re considering share the core principles that drive your business forward. Do they understand and respect the culture, traditions, and practices that have contributed to its success?

This alignment goes beyond business strategy—it also extends to relationships within the family. Tensions can arise when personal values or goals don’t align, so it’s important to have open discussions about expectations, both for the business and the family.

Planning for Succession and Transition
Even if your children or family members demonstrate interest, skills, and leadership ability, stepping into a major role can be overwhelming without the right preparation. That’s why planning for succession is just as important as evaluating readiness.

A structured training program can ease the transition. This program might involve mentorship from senior leaders, formal training sessions, or shadowing you or other executives. By creating a clear path for growth, you can help them build the confidence and competence they’ll need to thrive.

A gradual transition of leadership is another critical step. Allowing family members to ease into their roles over time can help them gain the necessary experience and trust of other employees. This approach also allows for knowledge transfer and minimizes disruptions to the business.

Seeking Objective Perspectives
Sometimes, it’s hard to separate your role as a parent or family member from your role as a business owner. That’s where an objective perspective can be invaluable. Consider bringing in an advisor, consultant, or mentor to evaluate readiness. These external parties can provide unbiased feedback on whether a family member is equipped to take on more responsibility or step into a leadership role.

Feedback from non-family employees can also offer helpful insights. Those who have worked closely with your children or family members may be able to identify strengths and areas for growth that you might overlook.

Conclusion
Evaluating the readiness of children or family members to join or take over the family business is a complex and deeply personal process. It requires balancing the needs of the business with the goals and aspirations of the family, all while preserving the relationships and legacy that matter most. By considering their interest, skills, leadership qualities, and alignment with family values—and by creating a structured plan for their development—you can make thoughtful decisions that may help ensure the continued success of your business for generations to come.

About TFO Family Office Partners:

TFO Family Office Partners is a wealth management firm based in Phoenix, AZ, specializing in helping families nationwide thrive by Connecting Wealth and Purpose®. Our experienced team offers comprehensive services, including investment advisory, estate planning, wealth planning, accounting and bill pay, family life skills, tax consulting and compliance, philanthropic planning, and family governance.

What is a Multi-Family Office? A Guide for Ultra-High-Net-Worth Families

For ultra-high-net-worth families, managing wealth is about more than just investment portfolios, it’s about legacy, strategic planning, and effective coordination of financial affairs. This is where a Multi-Family Office (MFO) comes in.

Understanding a Multi-Family Office

A Multi-Family Office (MFO) is a financial advisory firm that provides comprehensive wealth management services to multiple affluent families. Unlike a Single-Family Office (SFO), which serves just one family, an MFO offers a shared platform, allowing families to benefit from a broader range of expertise, institutional-level resources, and cost efficiencies.

What Does a Multi-Family Office Do?

An MFO acts as a centralized hub for managing all aspects of a family’s financial life. These services include:

1. Investment Management
   MFOs create customized investment strategies tailored to each family’s goals, risk tolerance, and long-term vision. They offer access to diverse asset classes, including private equity, real estate, and alternative investments.
2. Estate and Legacy Planning
   Preserving wealth across generations is a key concern for ultra-high-net-worth families. MFOs work closely with legal and tax professionals to develop estate plans, trusts, and philanthropic strategies to help with a smooth transition of wealth.
3. Tax Planning and Compliance
   Effective tax planning can be critical to optimizing wealth preservation. MFOs coordinate with tax experts to structure assets efficiently, navigate complex tax laws, and help ensure compliance with ever-evolving regulations.
4. Family Governance and Education
   Multi-generational wealth requires thoughtful stewardship. MFOs provide family governance frameworks and educational programs to equip future generations with the knowledge and skills to manage wealth responsibly.
5. Risk Management and Asset Protection
   MFOs assess financial risks and work towards implementing strategies to help protect assets from economic downturns, litigation, and other unforeseen challenges.
6. Philanthropy and Charitable Giving
   For families with philanthropic interests, MFOs help establish charitable foundations, donor-advised funds, and strategic giving plans to align with their values and create a lasting impact.

Why Ultra-High-Net-Worth Families May Choose a Multi-Family Office

• Comprehensive Wealth Management: MFOs integrate many financial aspects under one roof, providing a coordinated strategy tailored to the family’s needs.
• Expertise and Network: Families gain access to experienced professionals and industry-leading insights.
• Cost Efficiency: Sharing resources among multiple families reduces the overall cost compared to running a dedicated Single-Family Office.
• Continuity and Legacy Planning: MFOs help families create long-term plans with a focus on ensuring their wealth serves future generations effectively.

Is a Multi-Family Office Right for You?

For ultra-high-net-worth families looking for a well-rounded approach to managing their financial affairs, a Multi-Family Office may provide a valuable solution. By offering tailored strategies and expert insights, an MFO works to help families preserve, grow, and transition their wealth according to their unique vision.

At TFO Family Office Partners, we specialize in guiding ultra-high-net-worth families through many aspects of wealth management. Contact us to learn how we can help you create a legacy.

About TFO Family Office Partners:

TFO Family Office Partners is a wealth management firm based in Phoenix, AZ, specializing in helping families nationwide thrive by Connecting Wealth and Purpose®. Our experienced team offers comprehensive services, including investment advisory, estate planning, wealth planning, accounting and bill pay, family life skills, tax consulting and compliance, philanthropic planning, and family governance.

Are you looking for a system to scale your business, align your leadership team, and drive long-term success? Join TFO Family Office Partners for a webinar featuring Jeremy Macliver, Expert EOS Implementer, as he introduces the Entrepreneurial Operating System (EOS), a powerful framework designed to help business owners gain clarity, strengthen leadership, and optimize operations.

What You’ll Learn in This Webinar

During this session, Jeremy will break down the essential elements for ensuring your team is fully aligned with your vision, fostering a high-performance culture of accountability, and building a business story that’s worth sharing.

• Vision Alignment: How to ensure every team member understands and embraces the company’s direction.
• Accountability & Ownership: Strategies to create a culture where everyone takes responsibility for success.
• Communication & Clarity: How to keep teams engaged and motivated through clear expectations.
• Storytelling in Leadership: Why a well-defined vision makes your business memorable and easy to champion.
• Scaling with EOS: How these principles help businesses grow with consistency and purpose.

Whether you’re a seasoned entrepreneur or a business leader looking to streamline operations, this webinar will provide actionable strategies to help you gain traction and scale effectively.

When: Thursday, March 20
Time: 4-5 p.m. PT
Where: Zoom Webinar

Don’t miss this opportunity to learn how EOS can transform the way you run your business!

Planning ahead is key to navigating the complexities of the tax landscape. That’s why we are pleased to provide you with our 2025 Tax Reference Sheet, a convenient resource that offers quick access to important tax-related data points for the year ahead.

Whether you’re looking for updated tax brackets, contribution limits, or other essential figures, this guide is here to help you stay informed. Should you have any questions or need further information, our dedicated team of tax professionals is just a call or email away. Their contact details can be found at the bottom of the sheet.

As always, we are here to help and are committed to supporting you with the insights and resources you need.

Succession and exit planning are essential for transforming your business into a valuable asset that aligns with and supports your broader life goals. However, navigating these complex processes can feel overwhelming without expert guidance.

To help, TFO Family Office Partners is thrilled to host a webinar featuring John Chionchio, Partner at WealthPoint Business Advisory Services. This live event, hosted by TFO Family Wealth Strategist and Partner Damon Miller, will provide valuable insights into developing and executing effective succession and exit strategies.

Here’s what you’ll gain from attending the webinar:

• Understand the why, how, and what of outcome-driven succession and exit planning:
  • Preparing your business as an asset
  • Exploring 10 monetization strategies and their impacts on desired outcomes, including:
    • ESOPs
    • 301 redemptions
    • Owner/investor models
    • Recaps
    • Hybrid solutions
    • And more
  • The keys to making great decisions
  • Little known secrets of successful execution
• Common financial industry challenges in delivering value to business owners through exit planning.
• How finding and partnering with a specialist provides optimal outcomes.
• The importance of true collaboration in achieving optimal outcomes.
• What to do right now to get succession and exit right.

Important steps to optimize your finances and minimize your taxes before the new year

As 2024 draws to a close, it’s important to think about your year-end planning. This is the perfect time to take control of your taxes and find ways to lower what you owe the IRS. While your TFO engagement team can help you with specific recommendations, here’s a simple checklist of potential actions to consider before December 31.

We’re always here to help you! If you have any questions, please feel free to reach out to a member of your TFO engagement team.  You can download the printable checklist by clicking the button below.

By Chuck Carroll, CFA, CAIA
Chief Investment Officer
TFO Family Office Partners

Tonight, our country will focus on our electoral process of determining our next President, and other legislators who will shape our country for the next 2-4 years. Elections have been a foundational and fundamental element of our democracy for almost 250 years. They can also be polarizing and stressful, as those with strong opinions find themselves at odds with fellow Americans who hold opposing views.

It’s natural for those passionate about a candidate or a political party to perceive a connection between election results and the future performance of the stock market. After all, each of us hopes that our preferred candidate wins, and we all hope the stock market goes up. So, it feels natural to associate the two outcomes in our minds. But if we look more deeply at history, we see that the stock market hasn’t shown much preference for one political party or the other over the past 98 years.

By Chuck Carroll, CFA, CAIA
Chief Investment Officer
TFO Family Office Partners

At its September 17-18 meeting, the Federal Reserve (“the Fed”) is expected to cut the federal funds rate. The Fed Funds rate is the interest rate at which banks make overnight loans to one another. It’s a tool used by the Fed to control the money supply in the U.S. economy and regulate the economy. A September rate cut has been talked about in the media for some time, with many outlets providing forecasts about what it will mean to the financial markets. Below we will discuss the elements of your financial world that you should expect to change if the Fed cuts rates, and others where a Fed rate cut will likely be less impactful.

Likely direct impacts of a Fed Funds rate cut
• Yields on money market funds, CDs and bank savings accounts will likely go down slightly. The yields on these accounts tend to be tightly correlated with the Fed Funds rate.
• Interest rates on adjustable-rate loans such as adjustable-rate mortgages, credit card debt, margin loans and new student loans will likely decrease slightly.

Impacts of a Fed cut that are less clear
• The short-term direction of bond yields and prices.
• The short-term direction of stock prices.

What about the bond market?
It’s important to remember that the Fed only controls the interest rate at which banks lend to one another. The Fed does not directly control the yields on intermediate-term bonds. Bond yields (and their prices) are driven by investors’ collective expectations about the future: Future inflation, future Fed actions, future risk tolerance of investors, etc.

To see how uncorrelated bond yields are from the actions of the Fed, all we have to do is look at the last 14+ months. The last time the Fed took any action was when it raised the Fed Funds rate on July 26, 2023. Since then, it has held the Fed Funds rate constant at 5.5%. But the yield of the 10-year Treasury bond has gyrated dramatically over that period, rising to almost 5% during the fall of 2023, then falling to its current mid-3% level.

Because bond yields are based on expectations, the chart above would seem to tell us that during the past 12 months investors have been incorporating their expectations of a future Fed rate cut into bond yields. As a result, Wednesday’s widely anticipated Fed rate cut is unlikely to have a direct impact on bond yields and prices.

What about the stock market?
In recent weeks, there seems to have been a flurry of media articles implying that a Fed rate cut will bring good things to the stock market. But history tells us that such a relationship isn’t as clear as the media would like us to believe.

Until the late 1980s, the Fed didn’t even use a Fed Funds rate target to set interest rate policy, instead focusing the level on nonborrowed reserves in the financial system and/or using open market operations (buying and selling of securities) to manage the U.S. economy1. Until 1994 the Fed didn’t even issue a “policy statement” describing its Fed Funds actions, much less hold press conferences to discuss its views of the economy and the rationale for its decisions2. The whole concept of “Fed watching” is only three decades old.

What can we tell from the past 30 years of transparent Fed actions? Since 1994, the Fed has cut the Fed Funds rate 30 times. Were those cuts signals that stock prices were going to rise? To answer that question, we looked at global stock market performance over the 12 months starting the 1St of the month after a Fed cut. The performance of the global stock market in the 12 months following those 30 cuts is shown below.

The chart above is likely to disappoint investors who want to believe that Fed actions influence near-term stock market performance. Stock market returns over the 12 months following a rate cut have covered an extremely wide range, from 55% in 2020 to -43% in 2008, and on average have been negative: -2.4%.

As we see in the chart above, rate cuts tend to come in bunches. What if we look at only the first rate cut in a cycle, like Wednesday’s cut would be?

There have only been five such “first cuts” in the past 30 years:

We see that “first” rate cuts have occurred in response to a variety of economic environments, and the performance of the global stock market following those cuts has also varied dramatically. To us, this is yet another piece of evidence that a Fed rate cut doesn’t mean near-term stock market gains (or losses) are a sure thing.

Summary
While a cut in the Fed Funds rate will likely result in lower yields on money market vehicles and lower debt costs on adjustable-rate debt, its potential impact on stock and bond prices isn’t clear.

If the markets do move dramatically on Wednesday (or at any time before or after), it will likely be because investors are digesting new, unexpected information. But trying to forecast what that latest information will be, and how investors will react to it, is incredibly difficult. As a result, we caution against making near-term predictions about the markets, and/or making specific decisions solely because the Fed’s actions. Rather, we encourage you to continue to have a long-term mindset and avoid letting Fed’s actions be a distraction to you.

As always, please feel free to connect with any member of your TFO team if you have questions.

Written by Chuck Carroll, TFO Family Officer Partners Chief Investment Officer

The holiday season is officially upon us, and with it comes our annual opportunity to gather with family and friends and share joy with those we love. If you’re anything like me, those family gatherings also provide a great opportunity to smile and raise a glass to fond memories and funny stories about loved ones who are no longer with us.

One of my most vivid memories of my late father was his passion for photography. A number-crunching, business-advising Certified Public Accountant by day, on the weekends (at least those he wasn’t working) he was passionate about all things photographic. During my youth–the late 1970s and 1980s– technology hadn’t yet blessed photographers with the digitalization and miniaturization that we take for granted in today’s mobile phones and digital cameras. As a result, serious photo hobbyists could easily acquire a closet full of camera bodies, various-sized lenses, light meters, and other related paraphernalia. When we traveled on family vacations, my father would pack a separate carry-on bag (think extra-large padded duffel bag) of camera gear, which never left his side. To this day, my mom just shakes her head and sighs when she describes us weaving through a crowded airport, she, my sister, and I carrying the bulk of our family luggage because no one other than Dad was allowed to handle “the bag.”

When I would ask him (as I think I did on every trip) why just one camera and one lens wasn’t enough, his response was always the same: “You never know.” I’ve since come to appreciate that phrase, because the photos in our digital frame that we cherish the most aren’t the meticulously posed, digitally enhanced images of family photo shoots. While we appreciate those, the photos that really make us smile are the candid snapshots taken in the waves, at a sporting event, or just doing something silly in our own backyard. The wonderful images that only exist because the person taking the picture had the foresight to think, “you never know.”

In the financial markets, the month of November was analogous to one of those memorable candid snapshots. November didn’t provide any dramatic newsworthy events to anchor in our memory: No great advance in treating a life-threatening human condition, no peaceful ending to a worrisome military conflict, no global economic boom. In fact, earlier this Fall many market pundits had been downright pessimistic about the impact that lingering inflation, falling commercial real estate prices and a host of other concerns might have on the global stock market.

But yet, in the face of that pessimism and without an obvious catalyst, the global stock market turned in one of its most impressive months in history. The 9.3% return achieved by the market in November was the best monthly return since 2020¹ and ranked in the top 3% of the 1,175 months of market history going back to 1926¹.

What was more surprising to many investors in the month of November was that the US bond market gave us a surprise that one-upped the stock markets. At the end of October, the US bond market had suffered through its worst three-year period history, falling over 15% during that time¹. But investors betting on a continued decline in bond prices were surprised to see the bond market quickly reverse and post a 4.6% return in November, its best month since “Back to the Future” hit the theaters and “The Cosby Show” ruled the TV ratings¹. In fact, November’s bond market performance was the 8th best monthly return in the past 1,175 months¹.

While some pessimists might try to downplay November’s returns as just a meaningless one-month blip in a downward trend, the long-term impact on an investor who chose to be out of the market, and thus missed the significant one-month returns described above, could be quite dramatic. For example, a hypothetical investor who chose the comfort of their savings account over a 60/40 portfolio of stock and bonds didn’t just miss out on the unusually strong returns that the market provided in November. The opportunity cost of missing just those 31 days, when compounded over a multi-year or multi-decade time horizon, could potentially double or triple the initial amount.

Any great photographer knows that being prepared for life’s unpredictability can help to capture once-in-a-generation moments.  Staying fully invested in markets, even when recent results have been disappointing and the news seems bleak, can do the same thing for your wealth. After all, you never know.