Family Business as Viewed by Financial Intermediaries

Abstract

Family businesses play an important role in Italy and comprise not just small firms, but large ones as well. The entrepreneurial family is defined as a group of descendants from a family founder who own shares in a company within the manufacturing, commercial, or service industry. A taxonomy of structural variables can be used to classify entrepreneurial families: characteristics of family members, net worth, and controlled company. Social variables, such as family internal cohesion, leadership nature, financial culture, risk propensity, and lifestyle can be used to understand the decision processes employed by entrepreneurial families.Current trends in Italian entrepreneurial families include a high number of successions from one generation to the next, partnership re-structuring due to multiple shareholders of a company, and competitive dynamics due to the pressures of business growth. Specific requirements of the entrepreneurial family are derived from the trends and variables previously discussed. These are: the need to increase total net worth, the need to manage net worth, and the need to preserve net worth over the course of time. Individuals who provide entrepreneurial families with the products and services needed to run successful ventures include third actors, particularly financial intermediaries. However, due to conflicts of interest between entrepreneurial families and financial intermediaries, some businesses choose to employ family office services for financial guidance. (NEE)