IBBC CAPITAL ACADEMY / 2027
Family communication is an investment control
Independent IBBC Capital draft content for self-study. Not affiliated with or endorsed by CFA Institute. New lessons await subject-matter review. No CFA designation or official PSM credit is awarded.
Learning goals
- Diagnose the case using the stated constraints and quantitative evidence.
- Defend a conditional decision and identify what further evidence could reverse it.
Draft · approximately 65 minutes, excluding further revision.
Decision case · fictional facts
A founder controls a 40 m family pool. Two adult children prefer conflicting goals: one wants 5 m business seed capital, the other a stable annual education and health reserve. A family charter requires 75% voting approval; votes are equal among four members. The founder has never documented delegated authority.
Profile goals and decision rights separately
Wealth can combine identity, family roles, control, succession and unequal financial literacy. Use confidential interviews and shared discussion with consent to distinguish individual needs from collective obligations. UHNW complexity often includes operating businesses, illiquid holdings, multiple entities and generations; large wealth does not imply unlimited risk capacity or agreement.
Build a usable governance framework
A family framework should define purpose, ownership, voting, delegation, conflicts, distribution policy, education, dispute resolution and amendment rules. Document who may instruct custodians and what requires approval. Revisit the framework after marriages, divorces, deaths, business sales or major goal changes. A charter alone is not necessarily a legally enforceable instrument.
Communicate decisions without imposing a preference
Use plain-language scenarios, teach-back, meeting records and agreed escalation. Separate willingness from financial ability to bear risk. Address power imbalance and vulnerable family members without assuming the loudest speaker represents everyone. A joint investment plan can use protected essential goals and separately risk-budgeted entrepreneurial capital rather than force one undifferentiated portfolio.
UHNW complexity is qualitative as well as quantitative
Very wealthy households may have businesses, multiple residences, trust or holding entities, philanthropic activities and intergenerational decision making. Their needs can include privacy, coordination, liquidity for rare large events and governance rather than merely more products. A 40 m pool can still have little available cash or unresolved authority; measure usable wealth, not prestige.
Formula and assumptions
Allocation share=proposed amount/usable family capital;required approvals=stated voting threshold
Compare with the model response after drafting
- 75% of four equal votes requires three approvals. A 5 m seed allocation is 12.5% of 40 m before any reserve or illiquidity adjustment.
- Clarify legal ownership and authority, protect essential reserves, and require a documented approval plus review milestones for the seed investment.
Errors to catch
- Treating family harmony as evidence of valid legal authority.
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Original knowledge check
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Sources and coverage status
These original lessons are drafts. Public outlines are used to check scope; the official learning-outcome text and proprietary question banks are not reproduced here. Follow the source for exam-year requirements and updates.