Financial Advisors

Help Clients on Their Life Journey; You’ll Both Win

As I continue focusing on living a quality life, I’m reminded that changing direction requires confidence.

At a recent speaking engagement I was approached by a young man who wanted to talk about family wealth succession planning, a topic I love and know well. His family was in discussion with their advisors about the transfer of the family fortune to this young man (the heir). His parents were staunch believers that the wealth should be used to advance the business, build more houses, plazas and entertainment centers.

With his father’s failing health, all discussion with the children had passed to the family wealth advisors.

The heir (let’s call him David – not his real name) believed his role was to move the family wealth into other areas. He conceded his parents had always generously contributed to good causes but David had much bigger quality life goals in mind. What he lacked was the confidence to set out to his parents and the advisors just how he would use the family wealth with meaning.

Wealth impact and purpose

Many of his parents’ friends also were in the building development business; it seemed to be a trend for them all. Yet David was determined to invest the wealth into rehabilitation farms (or what some would call drug rehabilitation centers). Both he and his wife and his two siblings saw their future lay with providing sancutaries for young men and women who had lost their way.

I will pause here to note that it is optimal when the siblings agree on future direction. That is not always the case in family wealth and succession planning. So, in this way, David and his siblings had an important positive aspect in their favor.

He knew this vision would take hard conversations with his parents, and, more concerning, with their financial advisors. But, again, he simply did not have the confidence for these difficult conversations.

An advisor knowledge gap

The advisors had never included David or his siblings in past conversations and so were unaware of the way in which this generation wished to change the direction of family wealth creation. Put more simply, the advisors did not know what was important to David in terms of life choices and direction. And what his parents decide to do with their money would have an enormous impact on him and his siblings.

The advisors were making no obvious attempt to bring the family together collaboratively to have “transfer discussions,” and this young man felt ill equipped to challenge them.

Clients, advisors both learn

David had completed a scientifically based behavioral discovery process as part of the event where I was speaking. I could see from the outcome that he was community-minded and had an above-average ability to manage risk. He was thoughtful, structured and able to pursue goals.

I explained to David that his confidence lay in his inherent behavior. I encouraged him to convene a family meeting to share his quality life goals for the future.

Each family member should complete a financial-life planning tool to objectively uncover their different behavioral styles, communication styles, talents, life motivations and money attitudes. Only then should they work with family wealth advisors to create a wealth transfer map.

Helping family members gain the clarity to choose between the many options in their life and increasing family member self-awareness so they more confidently make committed decisions should be a starting point for all family advisors. Using things like a behavioral discovery to accomplish this is not yet the norm, but it’s quickly on the rise.

It’s never easy to structure engaging family relationship meetings nor to keep them aligned and focused to achieve family succession goals. But it is vital to include all relevant family members.

Moving ahead confidently

I learned later that David had indeed convened a family meeting and, based on each members’ Financial DNA, discussed the direction he and they wanted to take family wealth in the future. He used what I’ll call his revealed talents, life motivations and financial personality insights to devise a well laid out, structured family wealth playbook, including his life goals.

His confidence had increased significantly because the behavioral discovery exercise helped him know – and helped him communicate – who he was and how to manage his behavior and use his talents. In short, David had discovered how to articulate his life goal passion and this increased his confidence.

As an aside, his parents were fully supportive of this change of direction for the family business and wealth. Seeing the confidence in their son only served to excite them to support him. In fact, when the family and advisors met to plan the wealth transition the patriarchs insisted David lead and facilitate the meeting.

A better world: One quality life at a time

With realization of one’s own potential and self-confidence in one’s ability, one can build a better world. – Dalai Lama

Lesson to advisors: Include all family members in transition discussions. Remember that, according to investment data, 66% of children fire their parents’ financial adviser after they receive an inheritance.

My encounter with David once again reminded me that confidence plays a huge role in everyone’s plans and, in particular, when they want to make a life change. Living a quality life for many has become front and center, especially as many re-evaluate their plans, life and wealth in the midst of COVID.

2020 was a year like no other. A year when conversations were deeper and when talking about the way we “do life” was questioned. Yet it is worth remembering that confidence – that is, feeling sure of ourselves and our abilities in a realistic, secure way and having a quiet inner knowledge that we’re capable – is what is needed to change direction toward leading a quality life.

Help your clients discover their life purpose. By doing so you’re more likely to end up with clients for life.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Hugh Massie

Hugh Massie is often referred to as the Money Energy Pioneer. This comes after 20+ years of helming the only behavior & money insights company, which he founded to discover, measure and manage the hidden influences of behavior and money energy forces on decision-making, performance and relationships.

Read Hugh's Bio