Do you have any idea of how much of your family’s worth is invested in your family business? What about other assets which have a meaningful value? Here in Vancouver (Canada), I have seen the net worth of families grow exponentially because of our long and significant increase in real estate values. This increase has tipped the proportion of many families’ assets heavily towards real estate, often which can be both unquantified and unintended.

Why does this matter? Asset allocation determines and affects your family enterprise’s rate of return on its assets; which can make a sizeable difference over the medium/long term on where your enterprise will be 10 to 15 years from now. Knowing where your enterprise has its assets may help guide your family to consider reallocating its investable assets to better reflect your own family’s risk-return tolerance or considering a strategy to monetize non-core assets such as non-business real estate.

The initial step to consider this is to assess and summarize your overall assets. This can be as simple as preparing a rough net worth statement. Valuing your operating business, if you have one, can be challenging but can be an illuminating exercise. Next, separate these assets into the various asset classes which include stocks, bonds, cash, real estate and alternative assets to determine the percentage in each class. Does the result match your understanding of where your family’s assets should be and the risk your family is willing to take?

Going through this exercise with your trusted advisor can provide you a perspective which you may not have previously considered, especially around risk and return metrics specific to your family.

Here is a benchmarking resource which may be helpful. Asset allocation benchmarking

With all of this time that you may have, why not get started on this exercise??

Learn, consider, apply!