Family businesses play a vital role in the Canadian economy, accounting for more than 50% of all private sector employment and contributing significantly to GDP. Family businesses provide stability and continuity and can take advantage of the opportunity to exercise agility in the face of change. However, family businesses also face unique challenges and complexities. For this reason, working with a Family Enterprise Advisor is becoming increasingly popular.
FEAs are professionals who specialize in advising and guiding family businesses through the complex and often emotional issues that arise when running a business that involves family members. They provide an objective perspective by helping families navigate difficult situations, including continuity planning, family dynamics, and business strategy.
The value of having an FEA as a member of your advisory team is manifold. Below is a summary of some of the most significant benefits:
Objectivity and Perspective
One of the most significant advantages of working with an FEA is their ability to provide an objective and impartial perspective on family business matters. Family dynamics and personal relationships can often cloud judgment and decision-making, leading to disagreements and conflict that can threaten the business's success. An FEA can bring clarity to these situations and provide unbiased advice and guidance.
Family Governance and Continuity Planning
FEAs are experts in family governance and continuity planning, which are critical components of the long-term success of any family business. Helping families develop a plan that addresses business succession and the transfer of family values and traditions to future generations is vital to the successful continuity of the business, wealth, and legacy that the family has built. An FEA works with families to help identify and develop potential leaders and create a succession plan to ensure a smooth transition of ownership and management.
Conflict Resolution
Family businesses can be prone to conflict, whether it's between family members or non-family employees. As trained professionals, FEAs help navigate these conflicts and find solutions. In addition, an FEA can help facilitate difficult conversations, which can help preserve family harmony and the business's long-term success.
Expertise and Knowledge
FEAs have expertise in family dynamics, governance, and succession planning. An FEA is an essential member of a team of advisors.
When working with an advisor who is a designated FEA, families benefit from the specialized skills of that advisor (i.e., tax professional, legal professional, investment professional) in addition to the skills needed to address specific issues related to the family business.
Both Rhonda and I are designated Family Enterprise Advisors. We are pleased to bring this knowledge and expertise as a valuable component of the full-service wealth planning offered to clients of Hymers Private Wealth.
