Role of women in Family Office

It was Mel Gibson who first attempted to know “What Women Want” in this award winning Hollywood flick. While it required an electric shock to him to get to appreciate their viewpoint, I assure you that I did not have to undergo such a treatment. It just needed a bit of open mind, lowering a sense of superiority or male ego and a bit of empathy. 

I am also relying on my personal experience of dealing with women with their financial affairs. Most importantly the experience I gained in dealing with women in business families, where they are given a bigger role in managing financial affairs of the family.

Before looking at this aspect whether women are adept at handling financial affairs or not. Or whether women with similar financial education background will tip men at this job. Let us approach it from two aspects: Her financial behavioural framework and her general demeanour. 

Her financial behavioural framework:

Let us understand that perhaps this is the first generation of women who have gone out of homes and competing with men. One generation ago, women worked too but not in domains strictly considered of men’s. So let us say historically, men went out to work and women looked after home and raised children. She made jewellery and always tucked away some money from her savings to save for rainy days.

My own mother used to have 3 or 4 metal boxes, where she would throw some currency. One box denoted one goal and she never opened it till the right time. In other words, she never compromised one goal for another whether it was saving for education, marriage or medical exigencies. She only touched the right box and took out money at the right time. She possibly understood the concept of ‘Non-fungibility’ before Nobel laureate Richard Thaler published his work. It was a mere mental note for her. 

From very Indian outlook and some similar conservative societies, this was a prevalent practice and a common wisdom passed on from all mothers to all daughters. Women always focused on preservation. Whether, it was about the health of her family or their general well-being. 

Women of today also carry the same Phylogenetic signature, if you will. This is evolutionary concept. It is a sub-conscious response of the female brain.

Her general demeanour:

A Woman is generally known to be more creative in whatever she does. She is orderly, well behaved and largely in discipline. Yes, we may see many modern day examples of a spoil girl kid in schools and colleges but it is not her true nature. Many a times she is just playing equal to boys and may be venting out her anger towards her family or some frustration for lack of attention. Such girls too stabilise as they grow older.

She has grown up playing with dolls, spending hours decorating her dolls and later on herself in the mirror. She takes care that things are not messy. 

Things may be changing nowadays, but I could not spot more than 10% women in a casino. Aggressive risk taking and a mindless bravado is not in her innate nature. No wonder that in traditional Indian households, the so called Tijori ki chaabi or keys to the safe were handed over to the Female head of the family. She was seen as a figure of responsibility and respect. Her views on matters of land and investment were and still are respected. Overall, she lent a Balance and influenced the manner in which men in the family approached financial matters.

I have highlighted some key words above in my chain of thoughts. Let me enumerate them here once again:

1.      Savings mindset

2.      Goal orientation and Non-fungible financial planning

3.      Wealth Preservation mindset (special mention in concluding note on this)

4.      Creative thinking

5.      Orderly and Disciplinarian

6.      Never leaves a mess

7.      Low risk taking

8.      Responsible and accountable

If I were to write a job description of a chief investment officer of a family office, above qualities would be a Gold standard. Throw in the quality of ‘Trustworthy’ especially if the candidate is from within the family then it is a complete package.

Finally, my personal belief has always been that wealth creation always happens in business or trade that any business family is engaged in. For a Family office, wealth preservation is the top priority. And for the Patriarch of a family, preserving the values and cohesiveness of his family is also paramount. The answer lies in your daughter or daughter in law. Groom them to be the Family office in charge.

Love and Peace,

Nitin Patnia

Disclaimer: The author works as a financial advisor in India. The views expressed here are completely his own and are a collective wisdom of  numerous humans that co-exist or existed before the author. The author claims no right of originality of ideas but would like to assert the right to his style of writing. There is no intent to hurt anyone's sentiments with his opinions. It is just an honest expression by the author to help anyone who may be benefited from his writings. And a medium to express his gratitude to all who contributed to bless the author with wisdom.

Finding real 'Value' in Value Investing

Truth is bold by nature and lie, arrogant. - Om Swami

I wonder if anyone has ever thought of Value investing in a philosophical sense. My weekend contemplation is on the importance of Values in companies that fetch premium valuations. We are too focused on what we are getting for the price we are paying to buy a stock or a stake in a company. In other words, there is enough literature available on Value investing in its economic sense

Taking a view on a stock, from Value investing point of view, perhaps, will be incomplete if we ignore what was the core reason for ‘life’ or ‘essence’ in a business.

Many growth investors have already thrown the Cigar Butt or Asset value concepts out of reckoning and married pure growth concepts in their valuation matrices. Much debate is around durability, longevity, consistency, predictability of a business growth. These concepts are very subjective in nature and are a matter of conjecture. This is the reason why buyers and sellers of a same stock exist at any given point of time, assuming both buyers and sellers had long term horizon, same risk profile and there was no liquidity crunch.

This subjectivity alone is the reason for ‘Alpha’ generated by some successful investors in equity markets world over. I am not denying the role of luck or market timing. But the joy one receives by a careful and diligent preparation is more satisfying than success by sheer luck. The former experience gives rise to a  ‘Bold’ personality and the latter an ‘arrogant’ investor.

Coming back on the main topic, I used two terms above ‘life’ and ‘essence’ of a business or an organisation. Let us look at what fosters and nurtures growth in a company. Is it technology, a great product, speed to market, popular managers, employees, preferential access to government or is it Research and development?

Perhaps all of the above are excellent ingredients of a great stock to own optically. In a short run, you will do well if you just identify some ideas that score high on some of the above attributes in comparison to its competitors. However, to get a sustained growth environment within an organisation, a great value system is vital. Very often it is the vision of a man who leads the value chain. It is the single biggest challenge in succession planning that this legacy of values is protected and passed on generation after generation. It is a role that everyone inside the organisation has to perform to protect the values. One can not rely just on HR bosses or some cultural captains that present a value shield. 

If you notice, I have not used terms like ‘creating growth’ in my post so far. It is a short sighted and narrow way of looking at things. Even nature on our planet and in universe is only providing a ‘nurturing environment’, nobody is creating. We are not growing plants or trees, they are just growing. We are only helping, nurturing it. When we think that it is we who are creating it, it only boosts our ego. We will be carrying a burden on us.

Creation is an ‘in to out’ process and not vice versa. We can only provide an environment of free thinking, moral ownership, a sense of belonging inside the organisation. It alone instils a huge and vital mental energy for all stakeholders to think like one. In the words of my Spiritual Master,”… Group intelligence is more transformational than individual heroism in the longer run”.

A value based organisation is judged not just by how they wish to treat their employees but its attitude towards its business associates, partners, suppliers, shareholders, government and community. A company that is respectful of all its stakeholders, will invariably get preferential treatment from them. I am not for a moment suggesting that ‘Money’ and ‘Profit’ are to be ignored but an organisation that has its eyes only on Profit and fame, will have no eyes on its path.

You will notice that such companies will be very consistent in its communication with investors, transparent in its proceedings, values its stakeholders, treats employees fairly, gives back to community and gives credit to others for their success. In a nutshell, will have good reputation and high corporate governance standards.

Is it then a surprise that those stocks will trade at a huge premium to its peers? Such companies will always be preferred in tough times by investors. Such companies will find good talent attracted to them like a bee to a real flower. During times of consolidation, many opportunities for merger or takeover will be presented to them. For, a virtuous stream of Ganges will continue to remain pure. Despite taking many small streams of water, full of impurities, along with it.

How many of us are looking at real ‘Value’ in a ‘Value investing’?

Love and Peace,

Nitin Patnia

Disclaimer: The author works as a financial advisor in India. The views expressed here are completely his own and are a collective wisdom of  numurous humans that co-exist or existed before the author. The author claims no right of originality of ideas but would like to assert the right to his style of writing. There is no intent to hurt anyone's sentiments with his opinions. It is just an honest expression by the author to help anyone who may be benefited from his writings. And a medium to express gratitude to all who contributed to benefit the author with wisdom.

Dealing With Pain

I was reading this quote usually attributed to Buddha which says, “Pain is inevitable but suffering is optional”. Life is a potpourri of experiences and tendencies of the mind and pain seems to be the centre of all of this. We are all navigating through variety of pains in our life. But, pain is the response of our mind on how we perceive the damage to our being. The damage may be externally motivated but our own interpretation of that damage makes it into a suffering.

My focus of today’s post is not on any spiritual plane but the real damage in financial portfolios caused by the market/economic forces. My sincere effort through this writing is to benefit my brethren advising their customers in financial investments. Majority of us have good intentions of helping our customers achieve their financial goals. We are constantly balancing our actions based upon client’s changing needs, greed, fear and market realities. However, when the storm comes, it impacts us all. The degree may vary but the pain is felt by all.

I am sharing with you some practical tips on how to help your clients come out of this pain and manage their psychology. Many investors would want to “Sell” and get out and swear never to come back into market related investments. Those who have seen some cycles of investing will be better equipped to handle this pain. However, in general, some of the stages I am enumerating below are universal in nature. Everyone who is going through some kind of pain or has suffered a loss goes through these emotions. Without further ado, let me dive straight into these.

Stage 1- Disbelief: How could this happen?

This is the first stage where the aggrieved is shocked. He wants to call you many times (I am going to use the term “He” to refer to the aggrieved person, please interpret it as gender indifferent). He will also check with his friends and others to see if they are in the same boat.

Suggested Response: Responsiveness and accurate update of facts

You will contribute to his anger if you delay in responding or if the facts around his portfolio are inaccurate. He needs latest information. Invest some more time.

Stage 2- Denial: This can't happen!

Denial is usually happening alongside disbelief. There is also self cursing for giving in to his Greed and falling into the trap of making more and the temptation of making some quick money. Depending upon the level of his attachment with money, his (or her) upcoming financial goals that were to be met, an overriding sense of uncertainty and not feeling in control, will be his dominant emotions at this stage. To make the matters worse, all newspapers and electronic media will be projecting bad news. All sorts of rumours will be floating in the market to add fuel to the fire.

Suggested Response: Acknowledge the emotions of his customer

Statements like “I understand what you are going through” help you connect. Avoid adding "But" after this sentence as it nullifies all you said before. Instead, use sentence like "with your permission, may I add a perspective or offer an explanation". Give the man some control by seeking permission. Please don't fake it, put yourself in his shoes, feel empathy.

Stage 3- Fixing or shifting blame: Why did this happen?

Also known as 'Psychological Projection', now he is ready to shift the blame onto you. He has done his share of contemplation and his mind has told him that he was not at fault. But he was misled, misrepresented by his advisor(s). At this point, you may notice that other stakeholders will also be in the meeting or in the loop.

Not only has he lost his money but also a face to perhaps his family members or his employer (if you are dealing with a professional CFO).  Your customer will employ all efforts to see negligence in your work and God forbid, of intent.

You may also notice that he will blame the present Government, Central bankers, The Prime minister/President or even God for his bad luck.

Suggested Response: Bring in clarity

His confidence is low. When confidence is low, there is darkness and he can't see ahead clearly. How well you paint a scenario that directly concerns him is the key. He should be the focus of your speech at all times. Don't bring others or yourself in the picture.

It is also imperative that you check your own behaviour at this point. Self-examine whether you were wrong somewhere. Admit the mistakes. I am presuming it is about the diligence that you should have shown rather than your bad intention in the first place. In which case, this post is not for you.

It is important that you highlight how he was successful in his decisions in the past and how well he dealt with such scenarios in the past. It is important to restore his self-esteem. He is not ready to hear your logic at this moment. Don't rationalise the situation. It is falling on deaf ears. Say that you will examine what you could have done better and what lessons can be learnt. Seek another meeting after a few days.

Stage 4- Bargain: How can I reduce pain?

This will most likely be in your next meeting perhaps with your senior. Your client is ready to now bargain with you. His anger has not gone away. He needs to extract a win; A discount on fee, a freebie, an apology or exit penalty waiver. He wants you to feel the same pain. If however you have been empathetic throughout rather than argumentative, you have already put yourself in strong bargaining position.

Suggested Response: Reinforce Market Wisdom

You may start with showing him his life goals, his asset allocation, the risk mitigation you already built in proposing solutions to him.

Point to remember: Quote Buffet or Franklin or Gandhi. It is important that these are not your words. Or say History has taught us. You have lost a bit of credibility. You are not ready to make sweeping statements all over again, pun intended :P

Stage 5- Fear: What if this happens again?

You have almost taken the aggrieved person out of a depressive state of mind, if now he is asking questions around building a strong fortress. He is also ready to hear the silver lining.

Suggested Response: The family office or Investment Policy Statement he avoided all this time

It is also important that you believe yourself in what you say and propose. He needs to see optimism. You should be filled with optimism and hope at this time.

Remember if greed and fear are two extremes, the middle point is HOPE. You have done well to bring him here. You are ready to implement any change in his portfolio at this point. Do not rush and use this opportunity to push some new and untested products. Simplicity is the key.


I would like to add that above are the same emotions that any depressed person feels after he/she has suffered an irreparable loss in life. You are free to observe sad people around you and check their behaviour. Help them out using above skills. The method is the same.

All the best!

Love and Peace,

Nitin Patnia

Disclaimer: The author works as a financial advisor in India. The views expressed here completely his own and are a collective wisdom of  numurous humans that co-exist or existed before the author. The author claims no right of originality of ideas but would like to assert the right to his style of writing. There is no intent to hurt anyone's sentiments with his opinions. It is just an honest expression by the author to help anyone who may be benefited from his writings. And a medium to express gratitude to all who contributed to benefit the author with wisdom.