The case of Marie, who needed a gatekeeper to protect against the brother she couldn’t say ‘no’ to.

Carolyn Cole for Canadian Family Offices
Originally Published on November 18, 2022 on

In family financial matters, gatekeepers can be essential within a family office structure.


Many years ago, a newly widowed mother of three sat at my desk. Marie’s husband had unexpectedly passed away and she was thrust into the financial world that her husband had carefully built and managed for them. They had lived a comfortable life and had saved enough for their children’s pending post-secondary education. Her husband had purchased numerous rental apartments to someday augment their retirement years.

Marie wasn’t excessively wealthy but was financially well above average. She had reasonable financial acumen, and I was not worried about her capabilities or capacity to manage her finances.

However, her good fortune did not last long. It took only a couple of years before the life insurance and savings had diminished, placing her financial stability and established standard of living in jeopardy. Marie never overspent, but what happened is far too common. Family happened.

The importance of gatekeepers

Gatekeepers are protective figures who stand watch, allowing only the worthiest through the opening and near the protected inner circle. Gatekeepers must have clarity on their responsibilities, use a designed framework for judgment and understand the nuances between allowing anyone through and the risks of rejecting the wrong people.

Consider a castle and a moat – a lackadaisical gatekeeper can put everything and everyone at risk by allowing passage without proper diligence. In reverse, turning away those who provide much needed supplies or valid opportunities could result in significant unintended consequences or losses.

In family financial matters, gatekeepers can be essential within a family office structure. They can also be what holds family members back.

In Marie’s case it was her brother, who was struggling with his business finances. Knowing Marie had received life insurance, he went to her for financial help. Marie felt obligated and was uncomfortable placing herself above her brother. She couldn’t say no. She had more than enough, and he was in genuine need.

At first it was a few thousand dollars, and Marie give it freely. The next request was for a much larger sum. She began to liquidate assets to help further. Eventually, without any paperwork in place, Marie had given a substantive amount of her net worth to her brother. He claimed it was to operate his business. She had never seen the financials for this business, did not fully understand it and had an ownership stake based only on his word.

The business went bankrupt.

This pattern of giving without hesitation – out of obligation, with no paperwork and the reluctance to ask for basic information – is far too common within families. Especially in those who have undergone a public liquidity event.

Family members who are perceived to have wealth, or come from affluence, experience unique emotional challenges. Some feel guilty about their success or their family’s success. Others feel an obligation to share their wealth with friends and family. Some are ashamed and hide how well they have done. There may also be a self-induced psychological expectation to maintain appearances of family success, regardless of their own financial realities.

Wealthy family members are regularly approached to give to a cause, help a friend’s start-up, or be the face of a venture. Saying no is hard. Yet regardless of how it is phrased or requested, most people want something from them. Money. Brand. Public association. A well-structured family office creates the shield and discipline needed to vet ideas, investments and other requests, allowing family to maintain their personal relationships without feeling conflicted.

Like many people new to wealth, Marie didn’t have a trusted gatekeeper or team to stand between her and the solicitation that came from her own family. In fact, she didn’t recognize that she even needed one.

Where does a family start?

Every family office should have established clarity on why they exist, what functions they provide and what decision-making processes guide the deployment of time and resources. The gatekeeping framework is intended to safeguard a family from unsolicited advisors, pitches and investment ideas that don’t align with the family’s objectives. This person or team can become both the “good guys” and the “bad guys” as needed.

For this to be impactful, the family must provide criteria on what they are trying to achieve and what they want to avoid. Without this outline, proper oversight cannot happen. Consider the strong matriarch or patriarch who is comfortable rejecting requests when they are non-core to the family objectives. Those family leaders won’t be around forever, however, and it is part of their succession and continuity responsibility to structure their replacement for this specific capacity. They also need to educate the rising generation on how to do what they do naturally – separate the “no” from the relationships that are important and essential for a healthy life.

Who should run it?

How does a well-structured family office set up a gatekeeping function? I will use Lawrence as an example. He recently experienced a significant financial liquidity event and wants to set up a family office. The first thing that came to his mind was to hire one of his long-time friends who has been part of his financial world for many years. It seemed logical until I asked, “Can you fire your friend?” He looked shocked at the question.

Rule No 1: Don’t hire anyone you can’t fire. That means you need to be willing to end a relationship over the unforeseen challenges that come with mixing money and friends.

The next person who naturally came to mind for Lawrence was his long-time CFO. He felt it would be a natural fit. She had been with the company for 35 years, knew exactly how Lawrence operated and thought. There is history and, most importantly, trust between them. I asked whether the former CFO has the skills required to set up the family office and lead the process. There was a long pause.

Rule No. 2: Trust is not enough. Make sure you know what you are asking your former employees to do and that they have the skills to be successful. Most family offices struggle early on because the team has zero experience in the field. More importantly, the founding family members do not have clarity on what they want or where they are headed, and they can’t articulate their 20-year strategy. Subsequently, there are no clear job descriptions, and expectations become blurred. The founders themselves need guidance before hiring or bringing anyone into the family office.

A gatekeeping team in the family office may be full or part-time, but they need to be paid appropriately for their talents. Most entrepreneurs have wealth because they are great savers, have effectively managed costs or are terrific stewards of what was given to them.

Rule No. 3: You get what you pay for. Consider the overhead costs associated with running a business of the same value as the family office portfolio. Why would running a family office be less important, cost less or be valued less? It could be argued that the preservation and continuation of what has already been built is worthy of just as much time, energy and resources as the initial build. This is not likely an initiative where racing to the bottom in fees will pay off.

Should *you* work in a family office?

In reverse, if you are approached to work for a family office and are excited about the prospect, ask yourself some questions.

Is the person doing the hiring your friend, and will the friendship last through a financial disaster? Consider the possibility of losses and who could be held responsible. Is there a clear strategy in place that needs to be executed? If not, why not? What value do you bring, and is the remuneration appropriate?

Will you be a good gatekeeper, or will your biases impact who and when people are let through the gate?

Your family office can be an excellent gatekeeper where wealth requests are concerned, but only if it is set up correctly.