Your Partners
Survival: The Family Way
The family business model is proving to be robust, even during the current economy. A recently released report by Barclays Wealth and the Economist Intelligence Unit (EIU) suggests that family businesses have leadership values and particular characteristics that may serve them well in surviving the downturn. According to the study--"Family Business: In Safe Hands?"--privately held businesses, unpressured by quarterly performance expectations, take a longer-term view than listed companies. They also tend to be more risk averse, and so are less burdened by debt. And they're agile, as ownership and management are closely aligned.
Local and regional economies where family businesses operate benefit because such companies tend to be strong supporters of their communities. This emotional connection also means family businesses tend to be slower in laying off workers than listed companies in difficult economic times, according to Barclays Wealth. If necessary, family members will take pay cuts and many businesses will suspend dividends to keep the business going. Thus family businesses are key players in economic recovery.
The survey, which was conducted for Barclays Wealth by the EIU, asked 300 high-net-worth individuals in family businesses to rank attributes they deemed most important to the success of their companies. Thirty-nine percent cited the ethos and values shared by family members involved in the business, and 38% cited their company's long-term view. More than a third of respondents cited the company's ability to make quick decisions, and one in three cited relationships with the local community.
"A well-structured family business that has clear objectives can have a significantly longer timeframe than other types of organizations," Matthew Brady, managing director of Barclays Wealth in the Americas, said in a press release. "This allows them to exploit opportunities that others cannot because they do not need to achieve such a quick payback."
From Fidelity, Retaining Productive Employees
Fidelity Investments has introduced a program to help registered investment advisors hire, develop and retain productive employees. The program also assists brokers who want to set up their own RIA firms develop effective talent management policies and procedures as they move toward independence.
Fidelity Advisor HR Solutions, which was built in conjunction with the consulting firm Veritude, provides customized consulting services along with training programs for management development, team building and organizational effectiveness. The new program also includes a Web site that features planning resources, tools and white papers.
For the program's custom consulting, Veritude helps RIA clients address specific talent management issues ranging from organizational design and workforce plans to sales training and executive coaching. Entering through Fidelity's Web site (http://fiws.fidelity.com), advisors can access resources such as sample employment applications, tips for delivering performance reviews and advice on designing a compensation system.
Michael S. Fischer (msf7@columbia.edu), is a New York-based financial writer and editor and a frequent contributor to Wealth Manager.
