Confusing Legacy with Governance
The first of the pitfalls he identified is a conflation of legacy with governance. Most family offices are accustomed to a decision-making process run by the patriarch or the first-generation founder, and they are unable to let that go.
A defined structure, he said, helps a family articulate what that process actually is, which in turn gives the next generation something concrete to either relate to or move forward from. Ideally, Governance should institutionalize principles, not personalities.
Waiting for an Event to Force the Transition
The second mistake is the tendency to treat generational transition as something triggered by circumstance rather than planned for.
“In India, we often wait for events. We wait for a particular age, we wait for a demise, whereas it should be far more natural if the next generation is interested,” he said.
Exposing the next generation to the business and to the family’s way of doing things much earlier would help, he said, and it does not happen as often in India as it should.
Hiring Professionals Without Handing Over Decisions
The third pitfall applies to family offices that have brought professionals into their organisations but have not changed the way decisions are made.
“Family offices hire experienced executives, yet key decisions remain informal or family-driven,” he said. “This creates ambiguity, weakens accountability, and makes it difficult to attract and retain top talent.”
Culture Is Not the Same as Compliance
The fourth chalenge is an assumption that the culture in which a business was built is itself a substitute for ethics, compliance and governance. He said it is not.
“What worked 20 years back may not work today and will not work 20 years later,” he said, adding that families remain focused on creating wealth while being reluctant to change the governance mechanism built around it.
“The most successful family offices don’t choose between preserving tradition and embracing change. They preserve their values while evolving their governance. That’s what enables wealth—and legacy—to endure across generations.”
Defining the Non-Negotiables
Asked what actually works, he was clear that no single model applies.
“I don’t think there’s a formula. Each family will find what works for them,” he said, adding that continuity and change are not competing forces.
The family offices that seem to be doing well, in his experience, are those where the first generation is not preoccupied with preserving its own legacy. They did what they had to do, he said, and the next generation now needs to take it forward in the way that works for them.
What helps that handover, he said, is for a family to define its non-negotiables and distinguish between values that should never change and practices that should.
For example, long-term stewardship and integrity may be non-negotiable, whereas asset allocation, technology adoption, or impact investing should evolve with the times. A simple Family Constitution or Charter can make these distinctions explicit and avoid future disagreements.
Letting the Next Generation Actually Decide
Picking up on a reference another panelist had made to the traditional Munimji, Mr. Bhatia noted that the role was about tracking things rather than contributing to the decision-making process. The next generation, he said, wants to be a decision-maker.
If a family wants its wealth managed by the next generation, that generation needs to feel it holds a genuine decision-making role, which makes clearly assigned accountability and responsibility essential. Rather than waiting for succession, one should involve younger family members early through governance roles such as observers on the investment committee, leading family’s ESG initiatives, or participate in philanthropy boards. This builds competence while bringing fresh perspectives without disrupting decision-making.
Professionalize Governance With Clear Decision Rights
The above applies to the professionals now entering family offices, who he said are increasingly upfront about asking what authority they will hold. Families need to set ground rules, but if they insist on being involved in every decision, defining the investment committee and reviewing every proposal, the process fails, particularly as the business grows larger and more complex.
Monitoring Governance as Closely as the Balance Sheet
He closed with a point that, in his experience, often gets missed.
“Monitor your governance structure as often as you monitor your bank balance or your wealth,” he said.
Families focus heavily on what is happening to their wealth, he added, without putting in place the guardrails that protect it.
As a closing comment he said “Families often believe their greatest asset is their wealth. In reality, it’s their ability to make good decisions together across generations. The family offices that endure are those that institutionalize trust through governance, while creating space for each generation to shape the future.”
