The question often comes lightly, over lunch, from someone with no particular agenda. A partner, a nephew, a new adviser. Why do we still own that one?
The answers tend to begin with the same word. Because. Because it was there when I took over. Because it means a lot to the family. Because selling would be a whole thing.
Each is true. None is yet an argument.
Every Holding Was Once a Decision
Every holding in your portfolio began as a decision. Someone looked at the asset, weighed the alternatives and said yes. That moment had a date, an owner and a reason.
The decision to keep it has none of those. It is the one decision in ownership that never has to be made. There is no meeting where the asset is asked to justify its place and no date on which the question falls due. Buying needs a reason. Selling needs a reason. Keeping needs only the absence of a reason to stop.
Reviews rarely fix this. A review asks how each holding is doing: whether it is occupied, whether its costs are under control, whether its partners are behaving. Those are good questions, but they are not the question of whether anyone would choose the holding today. A holding can pass the first set for years without ever facing the second.
What “Sell What You Would Not Buy” Cannot See
The tidy answer is a rule: sell whatever you would not buy today. It is a sensible starting point and it cannot see three things.
The first is an asymmetry in cost. Selling has costs that are visible and immediate: fees, a price below what the family hoped, the effort of a process. The cost of keeping the wrong holding is invisible. It never appears on a statement, because it is the value of what that capital could have done elsewhere. People are right to weigh both. They are misled by the difference in how visible each is.
The second is consent. Many holdings sit in structures where leaving needs a co-owner, a sibling or a cousin to say yes. A rule cannot make agreement arrive.
The third is meaning. The building where the family began, the first deal that worked: these carry value a spreadsheet cannot price and meaning is a legitimate reason to keep something. The problem is attachment that has never been named and so cannot be weighed against anything. Loyalty is a respectable reason. It is not yet an argument.
Two Questions, Asked Separately
What works is two questions, asked separately and in order.
The first is conviction: knowing what we know today and for the purpose we say this holding serves, would we choose it, on these terms and in this structure? The purpose can be financial, practical or personal, but it has to be stated. The second is cost: what would it take to act on that answer, in money, in consent and in family goodwill?
Asked together, the second answer votes on the first. A holding that would be expensive to leave starts to look worth keeping and conviction is rewritten to fit the cost. Asked in order, the answers point to four outcomes.
If you would choose it, keep it and be able to say why. If you would choose it, but not on these terms or in this structure, fix that and ask again. If you would not choose it and leaving is cheap, release it. If you would not choose it and leaving is costly, you have found the hard case and many portfolios contain at least one. The answer there is neither “sell now” nor “keep forever”. It is to work on the cost of leaving: approach consent early, stage the exit or change what the holding is for. A holding you would not choose and cannot yet leave is a project, not a verdict.
Underneath all four sits a simple test of whether a holding is still chosen: does it have an advocate? An advocate is someone who could argue for it today, to a sceptical listener, without reaching for history. A holding with an advocate is a choice. A holding without an advocate is a default.
Three Holdings, Three Answers
Consider a composite portfolio, not any particular family’s, with three holdings.
The first is a building where the family has gathered for as long as anyone remembers. Asked whether they would choose it today as a financial position, the honest answer is no. Asked what it is for, the answer is immediate: it is where the family meets. For that purpose the conviction is real and leaving would cost far more than money. It is kept, for that reason and no other. The building has not changed. What has changed is that someone can say why it stays and the family is no longer asked to defend it as something it is not.
The second is a half share in a property held with a cousin who has never wanted to sell and never wanted to discuss it. The family would not choose it today. But the obstacle is not price. It is consent and consent is not a number. The work is on the cost of leaving: raising the subject early, offering the cousin first refusal or proposing a change that gives each side a different role. A verdict now would either start a dispute or excuse a stalemate.
The third is a small holding taken on as a favour to a friend who needed a buyer and never revisited. The family cannot find an advocate for it and leaving is cheap. It is released in a single meeting.
What to Do Differently
- Say why each holding stays and test the reason. Finish the sentence: “We keep this for [purpose] and it still does that because [something true today].” A reason that no event could change is not a reason. It is a habit. Any holding that cannot finish the sentence goes on the review list.
- Ask the conviction question before the cost question. Answer “would we choose this today?” first and only then price what acting would take. Reversing the order lets the cost decide the answer before the question has been asked.
- Put a price on leaving. For each holding you would not choose, estimate the exit in three currencies: money, consent and family goodwill. A cost you can name is a cost you can work on. A cost you cannot name simply becomes the reason to wait.
- For the hard case, work on the cost, not the verdict. Approach whoever’s consent is needed early, consider staging the move and ask whether the holding could be given a different role. A holding you would not choose and cannot yet leave is a project with an owner and a date.
- Give every keeper an advocate and a review date. Name the person who will argue for each holding when asked and agree when it will next be asked. An advocate’s job is to make the case honestly, including on the day the case fails. Advocacy with a name and a date is what turns a default back into a choice.
None of this asks you to sell more. Some holdings will be kept for sharper reasons and some for reasons that were never financial. That is a better outcome than keeping everything by default. It is also the cheapest protection a portfolio has: a holding released by choice is a smaller event than a holding released by force and a portfolio in which every holding has an advocate finds its weakest positions before anything else does. It is also a portfolio someone can be proud to hand on.
The Pushback Worth Hearing
Family real estate is valuable precisely because it is not traded, the objection runs. Constant review turns an inheritance into a portfolio and a legacy into a spreadsheet.
That is a fair description of over-review and nothing here asks for it. The discipline is a scheduled question, not a permanent audit. Permanence and default are different things: a holding kept because someone chose it and can say so, is more permanent than a holding kept because the question has never been asked. Choosing is what allows a holding to last after the person who first chose it is no longer there to explain.
If someone you trust asked you to justify a single holding tomorrow, which one would you least want them to pick?