The American Dream, new riches, loneliness and obsession are just a few of the themes that F. Scott Fitzgerald‘s novel touches on and which make for an interesting comparison when juxtaposed with the family office industry.
Is the post-war mood of the 1920’s akin to the immediate post-pandemic energy, where deliberately extravagant parties and ‘revenge travel’ symbolize a need to make up for lost time? Perhaps, but there are some poignant themes within this great novel that symbolized the Roaring Twenties that still resonate and that anyone within the family office world can appreciate.
A timeless classic filled with characters intertwined in a complex tale of love, societal differences and consumerism, The Great Gatsby has many relatable themes, but here’s five that stand out.
Governing The American Dream
While the ‘rags to riches’ novel is in some capacity a critique of the American Dream, there is no doubt the idea still exists today that putting in the hours and persevering will ultimately lead to success. But whether achieved through entrepreneurship, investment or simply inheriting it, history has taught us people will go to great lengths to retain their wealth, often crossing moral and legal boundaries.
It’s this desperation for success, for fulfilling the American Dream, that seems to repeatedly see news headlines where someone with the Midas Touch is standing in a courtroom explaining how things spiraled out of control. But the next FTX, Theranos or Archegos Capital disaster can absolutely be avoided through correct due diligence procedures and effective governance and it’s never been easier for companies to integrate these measures into their operational and investment activities. The boom in software and technology service providers that offer family offices transparency through consolidated reporting and provide a real-time holistic view are testament to this.
Channeling Obsession
Just as Jay Gatsby’s obsession with Daisy clouds his judgement, an emotional attachment to certain investments, ventures or philanthropies can do the same for family members. While it’s true that family offices can benefit from an investment strategy that is closely aligned to family interests and values, family office executives can be incorrectly swayed by the sometimes overbearing pressures put upon them, resulting in irrational decisions in the name of appeasement.
It’s here where independent advice and consultation can be useful, providing an often necessary third-party perspective. With increasing access to deal flow and direct investments, family offices have more opportunities and need to make more decisions. Working in a fixed quarterly review with trustworthy external advisors to help assess these is an easy and effective approach.
Establishing Identity
As much as we try and avoid it, being social creatures we naturally evaluate our attitude, abilities and character in direct comparison to others. Gatsby’s desperation to create a certain identity, to use his wealth to position himself with social status, is nothing new and the idea of ‘reinventing yourself’ has spawned its own publishing category, but this need to position externally is equally applicable internally.
For the family offices industry at the center of the largest transfer of wealth in history, identity and legacy have never been more important and how the next few generations of wealth owners understand, identify and align with each other is not something that needs to be left to chance.
A proactive family office team knows this and where not already in place, will plan for value alignment exercises, often working with external experts to develop a family brand that, whether communicated publicly or not, delivers a clear positioning and allows alignment across generations.
Fighting Moral Decay
A story of morally compromised characters, often careless, shallow and sometimes abusive, The Great Gatsby reflects a decay of societal values and show that accumulating wealth rarely comes without moral dilemmas. But if simply avoiding criminal activities was enough in the 1920’s, today and tomorrow’s wealth owner need to do more.
With great power comes great responsibility and using wealth for a return that goes beyond beyond the financial is not just encouraged, its expected. While this was previously the exclusive pursuit of philanthropy, sustainable- and impact investing are driving this and provide a means for the modern family office to not just preserve their wealth but in doing so shape a future that has a positive moral core missing from most of F. Scott Fitzgerald‘s characters.
Money Can’t Buy Happiness
If there’s one narrative the book emphasizes it’s that amassing wealth or surrounding oneself with a certain group of people does not result in happiness. The superficial and materialistic world of Gatsby exists on an exponential level today and while we’re made more connected and ‘social’ through technology, anyone that’s worked closely within the family office ecosystem has experienced the negative effects that great wealth and the social divisions often involved can bring to a family dynamic, particularly with younger family members.
If one of the core purposes of a family office is to more effectively manage the complexities involved in this family life, understanding the societal pressures that wealth brings and creating a framework to carefully navigate this – both within the family and its interactions with the outside world – are as important as making the right financial decisions.
“Can’t repeat the past? Why, of course you can!” says Jay Gatsby and by all means he’s correct, though this applies to the repeat of historical negatives as much as positives. A novel such as this stays relevant because while it’s now over 100 years since the time of its setting, no passage of time changes the inherent nature of humans.
The effects of wealth, our desire to cultivate a certain image and our ability to become obsessed beyond rationality are not likely to change anytime soon, as are the effects such human traits have within a family office. Being proactive and anticipating these inevitable challenges isn’t unreasonable, and future-focused family offices that do so will be well positioned to manage such themes that are even more timeless than the The Great Gatsby itself.
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