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- [00:00]
A
Foreign. Welcome to Managing youg Practice. I'm Stephen Demand, and for longtime listeners, you'll notice a different voice today. Kathryn Williams, who helped build and lead this podcast for many years, has recently begun a new chapter outside of Dimensional, and I'm grateful for the thoughtful foundation she created, and I'm honored to help continue the conversation today. And today's a fitting conversation to begin with because we're going to explore one of the biggest opportunities facing how to help families think beyond the portfolio. Advisors are comfortable helping clients invest, plan, preserve wealth. But for many families, the hardest questions are not just financial. They're questions like what is this wealth for? How do we prepare for the next generation? How do we navigate a family business transition? And how do we protect the family, not just the assets? So to help us explore these questions, I'm joined by two terrific guests, Jeff Coyle, founder and CEO of Libretto. He also founded Monograph wealth, where he worked with ultra affluent families. And Jeff, I also saw that you were recently winner of a lifetime achievement award at the 2026 Wealth Tech Americas Award. That's quite an accomplishment. Congratulations there.
- [01:15]
B
Well, thank you, Jeff.
- [01:17]
A
He spent much of his career thinking about how to help advisors deliver more personalized total wealth advice. I've been fortunate enough to know Jeff for several years and just again, personally, Jeff has helped me see the world differently. And I just always appreciate people who kind of push our thinking out there. And we're also joined by David Speck, senior Fellow of the center for Family Business and Entrepreneurs, author of the Family Business Whisperer and founder of Advising Generations. Dave specializes in helping family business owners and the advisors who serve them navigate family dynamics, succession, governance, and generational continuity. And Dave, just in preparing for this, I got to listen to a few of your previous podcasts and episodes, and there's one story that stands out I'm going to share of Just a model of Integrity. In one of your early jobs, you left that career, but you found you were continuing to be paid. They kept sending you a paycheck, and
- [02:12]
C
what did you do?
- [02:13]
A
Most people probably would have just been quiet about that, but you had a model of integrity. You called them back, you returned the money. And I just think that's such a great story about you and your person there.
- [02:25]
C
Well, it was a. It was a first job. I was doing something that I hated. I was processing home loans. I don't know if you could do anything more boring, but I left that to go pursue a master's in finance and tax planning. And yeah, they kept sending me checks and you know, I needed those checks anyways. I was a young dad and, and it was a bit of a dilemma, but I wanted to have the story to tell my kids that I did the right thing. So I, I swallowed hard and made the phone call and sent the checks back.
- [02:55]
A
Well, that's great. And now you can tell you're, you're a new, new granddad too, right?
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C
Yeah.
- [02:59]
A
So now you can tell that. And, and Jeff, I remember we were in the security line at an airport and you were telling me you were getting ready to be a grandpa soon as well. Congratulations.
- [03:09]
B
Well, thank you. Thank you.
- [03:10]
A
Real quick, what's your grandpa names?
- [03:12]
B
Dave. I don't know if you'd like to start there.
- [03:14]
C
I'm so new, I'm about 11 days in, so I'm not sure I really have one yet. We're working on maybe Papa Dave. I'm not sure. I'm not, I'm not area. It's not settled. Not settled. I'm a newbie, Jeff, help me out.
- [03:27]
B
Yeah, well, I'm gonna be newbie at this too. Although I will say there is a practical issue around this is we're watching him start to learn to form words now. So I think my grandpa name will be the easiest thing that comes out of his mouth. So whatever that is. So grandpa seems big papa may be easier. So we'll find out.
- [03:48]
A
That's great. Well, congratulations to both you guys and I'm really excited to dive in today. When we talk about what great advisors do beyond investments and we think about how families can better prepare for wealth and responsibility, we're going to think about what are some of the practical things and considerations advisors can walk away with. Before we get into some frameworks, just what first pulled you into this work in general and what keeps you interested in it. And maybe we start with Jeff and go to Dave on this. Sure.
- [04:18]
B
You know, first I'd say it was a two step process. It was first the complexity of a financial puzzle. You know, when I started working in the business, I was working on small clients. I ended up working with larger clients. And the puzzle became far more complex because it was multi generational and now there are tax issues, transfer issues and so on. So I was intrigued by the complexity of the puzzle. It was gratifying to dig into it. And Sol, the second side though is then you realize it's far more than a financial puzzle. It's also a human puzzle. And then really when you marry those two things together into a system, you have the ability to optimize Outcomes. And it's not just optimizing wealth, which I'm sure we'll talk about. It's actually how you optimize the well being of individuals, affinity across the family and their desire to affect society in certain ways. And wealth is really serving that purpose. And so that' infinitely interesting puzzle and it's very gratifying when you're working with real people and you can help change lives in a good way.
- [05:29]
A
Yeah, it's the ultimate jigsaw puzzle that changes for each family and each dynamic. So that's no, no bored days there. That's great. Dave, how about yourself? What, what brought you into this and what fills your cup?
- [05:40]
C
Well, it, it started with that bad job. I really did not enjoy it. And my mom was giving me some counsel. She says, you know, you should find a profession that allows you to give other people advice. People naturally come to you and ask you for your opinion, for your advice. And so that sent me on kind of a journey of trying to figure out what profession that could be. I went and did a master's degree in finance and tax planning. And it wasn't till my last class that I figured out what I really wanted to do. That last class was an elective in family business management. And it layered on all the technical with all the non financial issues around shared decisions, generational complexities, sibling issues. And I thought, you know what, I'll never be bored if that's the, if that's the career path that I choose. And so that has sent me down a path. It's been 20 years now that I've been pursuing this work. I would say, like Jeff, more on the human side. I don't invest funds, I don't sell insurance. I partner with advisors to help these families, to preserve their families and perpetuate their businesses if that's their desire.
- [06:49]
A
And both of you have such great experience working with advisors. When you think about advisors you've worked with, what are some of the best ones you've worked with? What have they done differently when it comes to serving families? What have you both noticed there from the best advisors?
- [07:05]
B
The first thing is there's been a tendency in our industry to focus on managing portfolios. But it's actually not a portfolio that you're managing. You're actually managing their total wealth. And so when you, when you think about their total wealth, that includes homes, liabilities, operating businesses, private investments, human capital, executive compensation, pensions, insurance payoffs, expected estate transfers. So total wealth is an understanding of all of their financial resources, both current and future. And when you understand total wealth, what you step back and realize is the portfolio itself, which has tended to be the thing that people focus on. It's a just a component of that bigger system. And an effective way of thinking about that portfolio is it's really designed as flexible capital. Think of it as a completion fund that recognizes those other resources and then fills in the voids to create a comprehensive solution. And so what you're doing is you're building up a framework, you're starting with total wealth. You're thinking of the portfolio as a completion funds that fills in the voids to create a total solution. And, and then the next part of that process is really to identify, well, what's the purpose of that wealth and how do I align those resources against that purpose.
- [08:26]
A
What I love about that framework is I know that was designed and built for ultra affluent families, but that can apply to me, that can apply to anyone out there. And I think that's really relatable.
- [08:40]
B
You know, it's interesting when you use this approach, you can manage any level of complexity. But getting to your point, I would argue it's actually more important for people of normal levels of wealth. And a simple example, you know, you take the present value of a couple's Social Security when they're retiring, it's somewhere between a million and a quarter to a little bit north of $2 million. And what's interesting is it's really an illiquid inflation protected bond perfectly matched to the way they spend money. So if a mass affluent family doesn't know they've got $2 million sitting in an inflation protected bond, it's unlikely that that portfolio is well aligned with their needs. And so these are things that matter enormously to people. The same principles are applied at quite literally every level of wealth.
- [09:27]
A
Dave, you've worked with so many advisors and also many families. What stands out to you in terms of what the best advisors are doing when they're taking their approach?
- [09:36]
C
The best advisors discover that clients hire them for their questions, not their answers. Great advisors ask really meaningful questions and are very curious. I think the best advisors are great listeners and obviously it's more than about the financial capital. I think a complete redefinition of wealth management is really required for, especially for today's family. It isn't just the financial capital, it's the human capital. How are you preparing the rising generation in their relationship with the money? And will that money, will that success help them in their life? Will it bless them or will it be a burden and so advisors are tasked with doing far more than managing a portfolio. It is really about looking at the human capital. How do you interface with that human capital? Whether it's a spouse that typically does not participate in the financial decisions, and how do you encourage them to get comfortable? You know, how do you prepare that rising generation so that you, as the advisor, can serve the family relationship, not just a wealth creator? So I think there's a redefinition of the client. Also, the best advisors move from serving a wealth creator to serving a family unit, which is a big shift, but one that I think allows for a very sticky relationship and also creates a depth of relationship that provides a ton of value. And in today's day and age where everything is becoming more commoditized, you better have something else besides an asset allocation to have a sticky relationship.
- [11:20]
A
Yeah, I love the alignment between you and Jeff on this. I mean, there's a lot of similarities in how you view going beyond the portfolios. Dave, when you talked about asking meaningful questions, are there unique questions that families maybe aren't asking of their advisor that the advisor can help tease out? Especially maybe when it comes to family business?
- [11:42]
C
First of all, I think families don't really often know how the advisor wants to serve them unless the advisor is very explicit. And so I think families can get far greater value from the advice relationship if they will ask, in what ways are you willing to interface with my children? In what ways are you willing to participate in their education, in their preparation, rather than just interfacing with me and my spouse As a consumer of financial services, I think families can get far more from advisors by asking some of those things. On the flip side, I think advisors can get far more from their relationships if they don't just assume that the client wants a one to one interface, that they do want to train the rising generation, that they are willing to help in that way. So I'd be curious from Jeff's side, how would you respond to that?
- [12:40]
B
I couldn't agree with you more. In fact, I think it's almost essential. A model for managing family wealth that's been applied is people manage the enterprise family. And so capital is aggregated, the wealth is managed centrally, decisions are made at a central level, and then distributions are made of the wealth to the various households and then they live off those distributions. That's not a very empowering process. And you know what's interesting is wealth is not lived at the enterprise level, wealth is lived at the household level. So there's a structural approach where Instead of working from the top down, you actually start at the household first. You understand the total resources of every household and, and then you help them to allocate it. And what you're doing is you're empowering every household. And as you learn the intent of their wealth, now you understand every household and then you build back up to the enterprise solution. And when you do that, you have an ability to not only optimize wealth, but you also are empowering people. And that's positive, tends to be positive. And so that helps to reduce frictions in families. It helps to elevate well being and family affinity when you get rid of those frictions. So there are structural ways of approaching this. And then when you apply methods like, like Dave uses some of the human elements and the communication and the governance, all of these types of topics, you put together a pretty fabulous framework that can help people to be truly effective with their wealth.
- [14:15]
C
Jeff I would push one level deeper from, from enterprise to household to personal, because, you know, I have six kids, they all have different relationships with money. And so if I'm an advisor and I, and I just, I guess if I'm understanding correctly the household level, I just think for an advisor, you're gonna have to be curious about each individual and their relationship because again, I have some kids that are scarcity minded and, and they're hoarders of money. And then I have others that are spend thrifts. You know, if they have $5 in their pocket, they're gonna, they can't wait to spend it on something else. So it's gonna be incredibly important to, to personalize and to figure out each individual's relationship with financial capital and be able to build for them.
- [14:59]
B
Well, you know, if I can add to that, I completely agree. In fact, when I use the term household, your kids would all be a household. Okay, now there's two elements of this is they become a household when they're of an age and they're running their own household. And then they become a client and they have resources, they allocate those resources, they make their decisions. So every household, whether it's generation one, two or three, is really being empowered. Then. Now you go down even further within that household. You'll have a husband and wife and maybe they have kids that are still minors. Well, the husband and wife are making those decisions. But when you engage people in a process around purpose, both the husband and wife have an equal contribution to it. And so you're enabled to tease out both of their unique views of the world and then in a sense help them negotiate to a central, call it settlement if you'd like a central solution that really represents the best of their inputs.
- [16:03]
A
How does that inform, I mean where both of you are going on this? I take it back again to the questions that advisors are asking in discovery. Any tips for advisors, at what stage in the process are they getting deeper with these questions and any tips around the types of questions that help elicit that type of discovery?
- [16:22]
C
Well, I would start with, you know, what is your greatest hope for your children? I would start with talking about people rather than the capital. And then you can form, you know, the plan and the structures to bless the lives of the people. So I like to pair questions. So what's your greatest hope for your children? And then what are some of your greatest fears that you have and that informs what really matters to that client? I would say, Steven, one of the biggest mistakes advisors make is that if there is a husband and wife that they over index the insight of the primary wealth creator. And that is a huge mistake. Especially in terms of if you look at my family, if you want to influence my children, if you want to get something done in my household, you're talking mostly to my wife. And I think advisors make that mistake too often. We need to be equally curious about, I would say a non operating spouse that maybe isn't the one that the public sees as creator of all the wealth. Again, I think it's one of the greatest mistakes that an advisor can make is to overlook or under appreciate their insights and influence.
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A
Jeff, I'd love to hear. Cause I'm sure Dave's answer or question aligns well with your priorities based approach, which I've always found fascinating and interesting.
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B
Yeah, you know, it's, it's really, you're trying to clarify the intent of the wealth and it really comes down to some simple questions. In the case of an ultra affluent family, you know, people are familiar with goals. As an example, in my experience, I wouldn't ask an ultra affluent family what their goals are. And the reason for that is they'll often turn off. And they'll turn off for two reasons. One, they think it's retail and its goals have become ubiquitous. And two, they often think they have so much wealth they don't need to have goals, which to some extent is actually true. But what it does, it reveals that it's probably not the right question. And so a better question would be to say, well, how would you like to allocate your wealth? You know, how much of that wealth would you like to dedicate to your personal lifestyle? How much confidence would you like to have? What would you like to accomplish with your family? How wealthy do you want your kids to be? Can each of those children accept that wealth in a productive way? How would you like to affect society? Society in some way? And when they're done with that wealth allocation process, what actually happens is they're truly allocating their wealth and they're comparing that to their total wealth. And they're either going to have sufficiency or they're going to have excess, or they're going to have a shortfall. And most of the time it's a very large excess. And then the last question is, well, how would you like to allocate that excess? And then you go right back to the same set of questions. In your personal lifestyle, what would you like to accomplish with your family? When, how much? And then how do you want to affect society? And when you're doing that, as Dave was talking about it often, and you know, you don't, you don't want to be overly general about this, but one of the couple tends to be very financially oriented and the other tends to be much more intuitive. And they're both required in order to allocate that wealth successfully. The intuition says, hey, this child may not be ready for substantial wealth. And so we need to think about how do we approach that. So it's not just a financial issue, it's actually the marriage of the two.
- [19:48]
A
Any, any examples of times you've been surprised by the answers you've gotten there?
- [19:53]
C
I've worked with so many interesting families and you know, you see someone that's been married for 25 years and you'd think they would know what the other thinks. And, and I'm, I'm always surprised by the fact that, you know, many times they are not on the same page with how they want to talk about the financial capital. You know, their, their feelings about capital will do to their children. And so, yeah, I guess I'm no longer surprised by anything I hear. But you just have to stay curious, Stay curious with all parties involved.
- [20:26]
B
Yeah, I would say this exact same thing. You know, when you think about it practically, in a normal day to day life, nobody's coming in and asking you these questions and people aren't necessarily trained themselves to think through these puzzles on their own. So it's actually a fabulous. And if it's done well, each of the spouses has a unique and essential input into the puzzle. But I think Dave is Saying, yeah, it's very interesting because people have very different views of the answers to these questions. And, you know, with a good sense of humor, it's really a process of helping them negotiate to a common view and so that they're both on the same page moving forward. And that is a massive step towards truly making the wealth effective and, and establishing well being at the individual level and affinity across the family. And so the process itself leads to a productive outcome if implemented real well.
- [21:25]
C
Steven, one thing I would say real quick is often we want to go forward with families and say, you know, what are your hopes for your, for your children? And sometimes we need to go rear view mirror for a moment and say, you know, what is your first memory of ownership? What informs your relationship with wealth? What's your first memory of an interaction with money? Money, because each individual again, has their own story with their relationship with capital. And it may be that it is scarcity. They grew up with scarcity, and so now they, they have taken that forward. And whether they're, they're ultra wealthy or not, that mindset around their relationship with capital is hard to adjust, it's hard to edit. And so it's, it's important that we as advisors are curious about what makes up their story because again, you put two people together, maybe we think that they're from the same socioeconomic background, but likely they have different money stories. And so again, it's about curiosity and maybe that we need to go backwards before we go forward and help them.
- [22:34]
A
Yeah, that, that really resonates with me. I. One of my earliest money scripts or stories was cutting coupons with my mom. I was raised by a single mom, and Sunday morning she would put on a Patsy Cline CD and then we would just sit there and cut coupons. And that was a big part of just the notion of saving and making sure that every penny was accounted for. And that influences my wife even today is like, oh my gosh, do not worry about that coupon. That's a little bit of savings. What strikes me, based on what both of you are saying, it's just this notion that the skills we're talking about are very different.
- [23:13]
B
It's two things.
- [23:14]
A
It's a paradigm shift in how we view portfolios, like you were mentioning before. And then it's also different set of skills that advisors are being asked to do, these really effective ones. So I'm curious, how can advisors boost these softer skills? It's almost like a mediator therapist. I mean, there's a lot of to it Any tips there or suggestions of how advisors can flex that muscle or grow that muscle more?
- [23:40]
B
First of all, identify your gaps and fill those gaps. You know, I've spent an enormous amount of time reading the work of Dave and his contemporaries and trying to understand the human side of the puzzle, and then an enormous amount of time trying to understand the financial side of the puzzle and pulling those things together. So, you know, I think when Dave and I were developing in our own careers, these are all new ideas. Today, they're formulated. In fact. You know, Libretto is actually. It's a platform or a technology system enables people to manage this complex wealth. But part of the system is we have extensive professional development programs that help people to learn these concepts and apply them themselves. And so basically, I would say identify where your gaps are and then systematically go and fill those gaps.
- [24:34]
C
I think it's great advice. I mean, I'm always. Before I meet with a client or if I'm encouraging or coaching an advisor, I'm always asking these two questions. Are you genuinely curious? And do you really care? And if you're not genuinely curious and you don't really care, you're not ready to meet with that client. And so I feel that same way about myself. And as Jeff said, a lot of it is preparation and figuring out what we're not good at and spending time there. I've recently developed a couple of masterclasses, a generational wealth masterclass with Jay Hughes and the Family Business Masterclass with Dennis Jaffe, to create resources so that I'm not the bottleneck. And advisors and families can leverage these resources to be able to get further down the road in their own discovery and be able to have better conversations with each other. So, yeah, we're on a continuous learning journey and find people that are better than us and continue to learn from them. That's what I'm. That's what I'm working on every day, is find someone like Jeff to take something from, find someone like Steven to borrow something from. And we keep growing.
- [25:41]
B
Agree. Yeah.
- [25:44]
A
I'd like to move us to some of the family conversations. And Warren Buffett has a great quote of leave children with enough so they can do anything, but not enough so that they can do nothing. And I'd love to hear when you're talking with the families and we. We spoke of this a little bit earlier, but let's. Let's go a little bit deeper here. What do you think the. The advisor should be doing in terms of how they change meeting structure when it comes to working with families, I
- [26:09]
C
think we need to pay attention to what makes the agenda. So if we're creating the agenda, it's our meeting. If only the insights of the senior generation from a family make the agenda, it's their meeting. And if the insights and the curiosities of all generations end up somewhere on the agenda, it becomes a family meeting. And so I think as advisors, we need to be really thoughtful in our preparations for these interactions so that we can create agendas that keep the family's interest at the center of the table. I think there's nothing better that we can do than truly serve them in that way. And frankly, that's just being better at preparing. Obviously, we're going to be able to incorporate the things that we need them to hear. But if we prepare right, if we create agendas that truly show that it is them that we're serving, not our purposes that we want to serve, it just is a different feeling. It's a different feeling when you gather that family.
- [27:12]
B
I couldn't agree more with that. And you know, in a sense, to add to what Dave is saying, it matters how you approach the problem. So as an example, if you're approaching the client from an enterprise family level, where decisions are made centrally, capital's allocated distributions are sent out to households, the agenda is going to be the agenda of that enterprise family. On the other hand, if you actually approach it from a household level, you're actually identifying the total wealth of each household, empowering them to allocate that wealth and designing solutions. You're going to actually learn all of the issues that need to be addressed and coordinated within the family. And now all of a sudden, it becomes a true family meeting. And so the opportunity says if you start at the bottom and aggregate your way up, now all of a sudden you're capturing the information. And two things happen when you do it this way is one, you're being far more effective with the wealth is it's being directed by the people that are living the wealth. And the second thing that's happening is you're also removing frictions within a family. I'm sure Dave as well. Frictions can often show up when people have judgments about other households that they're off piste, that they're doing something that's not suitable. When you allow households to allocate their own wealth, they're solving for their own sufficiency, meaning they're not going to be able to buy a home that's larger than they can afford. They're not going to overstretch because they're working within their own contained environment. What it does is it creates sufficiency, it creates individual confidence and that feeds into the larger system. Approach the puzzle from the household level, aggregate it upward. And now your agenda for the family is their agenda. If you start at the enterprise level, as Dave was saying, it's the agenda of the first generation. That's what it is. And frictions show up when you start to have something that's imposed downward.
- [29:19]
C
Dave Steven, one thing I would add to that is, you know, oftentimes we make the rising generation feel like the risk we are trying to manage rather than, rather than them being the reason we care and are so thoughtful about how we're talking about financial capital because we want it to bless them. Too often they feel like they are an afterthought to the financial capital. We're trying to, trying to create trust structures so they don't blow it, so they don't screw it up. And ultimately that creates an impression of, about how we feel about them. And so as advisors, I think we need to be really careful about how we interface with the rising generation and help the, specifically the senior generation to have language around the why, why do we care about these different structures? Why are we putting them in place? And if just saving taxes is the reason, it's not compelling to the next generation. And so I think advisors have a great opportunity to, to help families be storytellers as to what our greatest hopes are for this financial capital in relation to the humans and their potential. And ultimately the success of every family should be the individual human flourishing of each individual of that family. And if it's something different, it's going to be difficult and there's going to be some scars.
- [30:50]
B
I always like to step back and say why do things happen, right? And a lot of times when frictions exist, exist is because they're approaching it from the top down. And the other thing is, when you think about it, there are many advisors that are working with this family. There are investment advisors, there's planners, there's tax, there's estate and so on. And what advisors often unintentionally do is they often unintentionally optimize their expertise. So an estate attorney wants to optimize wealth transfer through the generations. A tax accountant wants to minimize taxes. Advisors want to optimize for return. And that's what one of the reasons there's a problem is the client, this is not their expertise. They have a series of advisors are all optimizing their expertise as opposed to optimizing the intent of the wealth. So as an example, the first generation may not want to truly optimize wealth so that their next gens are worth a fortune. They might actually want to contain it. But if that is not part of the process to uncover that, to say, how wealthy do you want to be as opposed to how much wealth can we transfer without tax for the generations? And so it's all about how you approach it. And so, yeah, I would say for an advisor, be cognizant not to optimize your expertise, but rather optimize the intent of the family that you're working for. And you have to question, you have to learn about who they are, what they'd like to accomplish to be able to do that.
- [32:29]
A
So I'm a big fan of listening to Supreme Court oral arguments. I know it's very nerdy, but one thing that they love to do is give hypotheticals. So I'm going to propose a hypothetical as if you're before the justice demand here. And this hypothetical, a founder has created a successful business and one child works in the business and it's very capable. Another works in the business but may not be the right future leader. There's two other outside children that aren't in the business, but they're in the picture. And the parents come to the advisor and say, we just want to be fair. Where should this advisor begin? And Dave, this might be something you've very familiar with, so we'll start with you.
- [33:12]
C
Yeah, well, I think the first thing is to look at where a lot of families get this wrong is they begin with compensation and do compensation wrong. So I think the first thing is, I believe that in families that have companies, families should pay their family members and their non family members based on the job that they're doing. So you may have someone that is very competent, very talented, and ultimately would command a lot of money in the open market. Well, you better, you better treat them fairly because they have opportunities. And I would say those that are underperforming or not as driven. One of the key things that we often miss in family businesses is we. Well, first of all, we'll hire family members without a job description, Steven. How wild is that? Sometimes we will hire them and not provide the kind of feedback that we do to any other non family employee. I think beginning before we hire family members, I think it's important to develop a policy around, you know, what are the expectations if a family member is going to be hired, will a job be created for them or Will they apply for a job that's open? Will they be paid like a non family member? What kind of feedback will they give? And what level of accountability do they have as far as the two outsiders? You know, shared ownership is the hardest thing you can ask anyone to do. And one of the questions I like to ask that often gets parents off the hook from feeling like they have to put their kids in shared ownership is I will ask each child individually, are you comfortable personally guaranteeing the debt of the business so that it can continue forward? Now, if, if you have that one highly talented one that's maybe gonna run it, they likely understand the business and would put themselves at personal risk to see it going forward. If you have two that are outside that have different lives and you know, there's usually not that level of commitment. And so, you know, if you're going to be an owner, you gotta, you gotta align yourself with taking risk as well. So I think we can help as advisors. We can help by asking the right questions or arming our families with the right questions before we just allow them to say, well, the most fair thing for me feels like just splitting it equally. That seems like, you know, when they're all small children, there's one peanut butter sandwich. If we can split it just four ways, then that's the best way to do it. Well, with operating companies, that does not work.
- [35:53]
A
Yeah, you've got six kids to think about for that peanut butter and jelly sandwich there. So make a big sandwich for them. Jeff, your response to this hypothetical here?
- [36:07]
B
First of all, start with the person, I guess is, you know, speak to a real case. I worked with a wonderful family. The father was a phenomenal entrepreneur. One of the sons, kind of like your story, felt that he was going to fold right into the footsteps of his dad. The other son, it was just not his thing. And by the way, it is an extraordinarily unusual thing for an entrepreneur to create massive wealth. So to expect that to be the case in the next generation, that they have the same insights, skill sets and capabilities to do the same, it's probably not a reasonable expectation. So Dave talked about this earlier. Helping the first generation understand that is part of the puzzle because he can't force himself downward. And then the second side is to say, well, do an assessment and let each individual do a self assessment to say, what am I good at? What am I passionate about? And actually, once you do that now, how can I participate and contribute to this family? Where would I do that? You know, so as an example, I'VE worked with families where one of the family members put themselves in charge of human capital and the human and intellectual side of the capital, and she built programs for the families, and she actually put all that together. Her brother ended up becoming the next gen of the business. There are other siblings. DiBlane just completely didn't want to be involved at all. And so the key is. And again, I kind of go back to the fundamental approach. If you start with a household or an individual and you understand their circumstances, you can then organize and build it upward, and you can help to smooth the frictions that are going to naturally be in every family.
- [37:52]
A
That's a great personal, great example and great story. Kind of also made me think of the TV show succession right when just expecting the next generation to be able to do what the first did is just not always realistic, and it's incredibly difficult. Tell me a little bit. I mean, as we start to round out here, so much of, again, what we're talking about, an advisor might be thinking, at what point do I bring in a specialist? How would you counsel an advisor in that regard of when would be the right time to bring in someone, especially with a complex family business or Jeff, some of those clients that you've worked with too?
- [38:29]
C
I would, I would say, you know, there's two stages. I feel like that, that would make it feel safe for an advisor and have it be a good, good experience for the family. First, if. If an advisor would invest in getting some coaching with someone that stays in the background and isn't necessarily exposed to the family, I think that's kind of step one so that the advisor can get some comfort level, they can get deeper in conversations. And then when the advisor knows clearly, hey, these are some areas that I don't want to take on by myself. Once they're clear on that, then I think they will be in a better position to bring someone alongside. I mean, I'm typically brought in when families have tried to navigate the generational conversations, and it either hasn't worked well. I'm also brought in by advisors that are nervous about getting sideways with the family because there are tough questions that need to be asked during these transitions. And ultimately, if you need someone to represent the entire family rather than representing, you know, an owner and kind of facilitate a process, oftentimes the advisor could do it, but often they feel that it may put their relationship in jeopardy. And so that may be a proper time to partner. I'd be curious what. Jeff. Jeff, what you'd say.
- [39:55]
B
I would agree entirely with that and to maybe to add to that is I would say always, how's that? And just to have fun with, the question is really, when you're working with an affluent family, it's not a family office structure. It's really a virtual family office structure. And so that family is served by people in house. They're served by attorneys, accountants that are external investment advisors, planners. There are people that will contribute to family governance, address complex family dynamics. So really, the role of the advisor is really as an architect and an integrator, coordinating all of these outsource outside professionals into a unified solution. And when done properly, they're all working with the same understanding of the client and the intent of the wealth. And now it elevates their ability to do better work for the family. So I would say always. And I would also kind of highlight, you know, one of the areas that without question is don't try and solve the family dynamic issues by yourself. And there's a practical reason for that, is if an advisor is working with each household, every one of those households feels like that advisor is their advocate. They don't perceive any conflict. And because of that, there's a unique opportunity to take all of these individual parts of the households and roll them into an overarching family structure. If you take on an issue where there's interpersonal dynamics between family members, now what's going to happen is one of the two of those are going to think that you're working on behalf of another and you just lost your credibility. And so, without question, bring in an outside person to address those kinds of dynamics. But the same thing is true with don't do the taxes yourself, don't build the actual estate plan, all of these things. Think of it as a virtual family office structure or modular system. And as the advisor, you're the architect and the integrator. And then you outsource and allow the other activities to be distributed by other people.
- [42:11]
C
It takes incredible courage to be a great collaborator because most advisors worry like, well, maybe this new person will become the favorite, you know, But. But if you can be a courageous collaborator, I'll just share a personal story. My son, he was born with hemi vertebrae, which is like misshapen vertebrae in six different spots in his back. When he was 11, we took him in and they decided he needed to have an emergency surgery. That surgeon said, I want to collaborate with a different surgeon at a different hospital because I think they're the best in the world. So as a father, first of all, I was so Grateful for the courage of one surgeon who typically has a big ego. You know, you don't get that far in that specialization without having some sort of ego to say, you know, I'd like to collaborate with someone else on this. And it turned out it was a collaboration of nine professionals in an 8 1/2 hour surgery for one 11 year old boy. And so from that point on, Steven, it affected how I look at how we collaborate with families because it takes incredible courage, it takes communication, it takes us holding each other accountable on behalf of the family to create an incredible outcome. My son had an incredible outcome. I am confident he would not have had that outcome and be the healthy young man he is today had one person decided, I think I'm smart enough to do this on my own. And so that became very personal for me. And that is like the lens through which I look at collaboration with all the families that I work with in thinking about my son and the courage of one surgeon to say, I would like to collaborate with someone else that's even better than me. And so anyways, it was very personal to me, but I'll never forget it. I'll never forget it.
- [44:09]
A
Yeah, well, I won't either. I mean, that's a powerful story and you know, as a parent myself, you know, that really resonates and that's what I would want as well. Yeah, thank you for sharing that really powerful story.
- [44:21]
B
You know, from a practical perspective, an advisor doesn't need to do everything. And so when you think about a typical advisor, a lot of advisors, when they think about an affluent family, they kind of hesitate because they say, well, hey, do, do I need to be able to do the client's taxes? Do I need to be able to do an estate plan? Do I need to be able to do all of these things? And the answer is no. What an advisor needs to be able to do is be the central architect of someone's financial strategy and identify the overall solution and then connect that to the experts that are going to implement the individual components. And whether that's investing the dollar or doing the taxes, or creating an estate structure, applying risk management, whatever that is, all of those things are experts so they don't have to redesign the practice. You can manage the wealth of the most affluent with a handful of people in what I'll call as a virtual family office structure. So I would walk into it thinking that way. And that empowers both the business, but it also tends to end up with a better outcome and solution for the clients.
- [45:31]
A
It's A great point. It's a good reminder, especially because we oftentimes do feel like we maybe need to shoulder. And as we see in our Global Advisor study, advisors are continually adding more services and continually offering more services. And part of that might be an evolution of the industry. But being open and courageous to ask the right questions and not feel like you have to do it all yourself is a really powerful reminder. So I appreciate that from both of you. As we go in to close here, I just want to give us some more practical tips that you would give to an advisor if maybe what's one thing in the next 30 days that an advisor can do to better serve multi generational families or ultra affluent families? What's one tip you'd give or one suggestion that maybe something they can ask during discovery or a conversation they should have earlier than they probably would. How would, what would you leave them with?
- [46:24]
C
If there's one thing that can change the career of an advisor, it's to spend more time developing questions rather than planning on what they're going to say or what they're going to show or what they're going to present. So if you think back to the way that we prepare for meetings, you know, we're creating a deck to show them we're, we're developing an agenda, we even are developing maybe our scripts with how we're going to hand it off between one advisor and another. But how much time are we spending in the development of, of a really great question that is going to get them into story mode? I think if every advisor can begin their preparation with what's one or two questions that I can be prepared with that will get my client into story mode to get them to tell me what they, what really matters, then we will have a successful meeting. So that would be my takeaway is spend a little less time on, on preparation of what I'm going to say or present and spend more time on developing questions that are open ended, get them into story mode and allow us to discover what really matters.
- [47:36]
A
That's great. I'm going to take that advice from the next podcast that we do here too. So that's Jeff.
- [47:46]
B
Well, you know, I, I'll just, I'll just add to that. I thought that was perfect. And the way that I, I might add a little framing to that is, is just to be, become more mindful. Don't necessarily just optimize your expertise. Be mindful and optimize the intent of that wealth. So when, when Dave was talking about questions, questions are really designed to tease out what the intent of the wealth is. And once you learn the intent of the wealth, all of the solutions just fold right into place. And so I think that's what I would say is be mindful about not optimizing your expertise. Optimize the intent of the families.
- [48:20]
A
I really appreciate that. And this is such good insights and a powerful way to think about this. And since both of you, you have spent your careers thinking about this, thinking about family, thinking about legacy, and you're both now grandfathers. I'm curious, has that changed the way you think about your work and work in this, in our industry here?
- [48:45]
C
Jeff, you want to go?
- [48:47]
B
Sure, I guess so. I, you know, I, I'm very fortunate to have a family that loves and supports each other. That's not the case. And I'm very fortunate and grateful for that. You know, when our grandchild showed up, it was kind of funny because he's now our new bookend. And so what he's done is he's shifted everybody up to a different role. Our kids are now his parents, we're now his grandpar. And these are all part of life's experiences and it's very rich. And I think the other thing is, is when you see a brand new person, you know, they've got their own journey, their own decisions to make and I think it causes you to step back with a bit of humility and say, you know, how can we empower him to make the best decisions and to find his most suitable path? And I think those are questions that relate to every family. I think.
- [49:34]
A
Yeah, well, well put or a good pearls of wisdom there. And Dave, I know you're 11 days in, so no, no pressure to,
- [49:44]
C
but how are you doing? I'm doing all right. For me it's about, I want to pursue kind of being relationship rich. And that means several things. One is, you know, in what way am I showing up for my son in law? In what way am I helping him to find success and fulfillment in what he's pursuing, in what way can I help daughter who's a new mother to feel seen and to feel heard. So in what way can I, I leverage relationships that I have to be helpful to them and to my. Helpful to my family. I'm a huge believer that my financial capital is going to be far less valuable to them than, than my relational capital, the intellectual capital, the, the learning journey that I can help them create. And so for me it's, it's, it's remembering that I need to over index on those things rather than just accumulating more financial capital.
- [50:43]
A
Well, that's great, great, great advice. And as a. As a parent myself, too, that really hits. Hits home. So in closing, I'll ask one one final question for you all. You guys may know I started my career as a history and civics teacher, and I credit a large part of that to the great educators and mentors I had along the way. I'd love to hear from you all who was an instrumental mentor in your life. And Dave, why don't you go first?
- [51:11]
C
Well, I'll give you two quick ones. One is, her name is Pat Frischkopf, and I was working at LPL Financial. I had just finished my master's degree and really had a desire to work with family businesses, but there was no clear path to actually do this work. And so I reached out to her and she got me started. And then I have a longtime mentor, James Hughes Jr. And with Jay, I developed the masterclass. And he's been a mentor of mine for over 10 years. And it's generous people that are willing to share their knowledge, share their time, and clear a path for the next generation that wants to do this work. So I'm forever grateful for both of them.
- [51:50]
A
So, Jeff, who is an instrumental educator or mentor in your life, and how has that guided you today?
- [51:55]
B
You know, I've been fortunate to have two really fundamental mentors in my career. And the first one was, his name's Brian Sullivan. He remained friend throughout his life. He recently passed, but he gave me my first big break, and he hired me. And I was a trader, a securities futures options trader at Bear Stearns. And he taught me in a very supportive way that mistakes weren't acceptable and meaning that, you know, when you're a trader, you can't make mistakes. You're out of business. And what it did, it really heightened my sense of detail and the rigor of my work. He also taught me, he said, you know, always exceed expectations. People would call into the desk. When I was the youngest person and I was a person, I was kind of like their Google. And he said, you know, if they think you're going to get back to them in 10 minutes, get back to them in one minute. And that has served me really well. And the last is be true to yourself. You know, understand who you are, live by your principles and be true to yourself. The second person, his name's Robert Fisher, and he hired me in at a place called Wertheim Schroeder way back when. And what he taught me is he said, you know, you can sell all day long as an example, right? And people can manipulate people into making a decision. He said, but that's not a client that's good for you or for them, you know, and what he did is he taught me to empower people with information, allow them to come to their own conclusion. And if they come to the same conclusion that you have in mind, you have a wonderful relationship on your hands. And so I think those two people have been fairly foundational. They've helped to establish principles that I operate by. And I greatly appreciate both of them.
- [53:43]
A
Wow, that is really, really great to hear. And it's good advice. It's good advice for any really stage in your career life too.
- [53:52]
B
So.
- [53:53]
A
And I know that you, you do always exceed expectations and you don't make mistakes, you know, so I can see you, you live by that very truly.
- [54:02]
B
So mistakes are made. You just don't want to accept they are acceptable.
- [54:06]
A
Jeff, Dave, thank you so much for your time today. Your thoughtful insights, your stories, your personal examples, and your contributions to the industry. I mean, it really is impactful. It helps us all be better at what we do and how we show up for advisors out there. So thank you. Some of the takeaways I took from our conversation today are just the power of being genuinely curious and figuring out what questions we should be asking at different levels of the agenda, when we should be engaging with specialists. And to Jeff's point of just thinking about being a virtual family office, and that notion of constantly engaging others, being careful about how we engage the younger generations of families, I thought that was something that stood out and something too that was consistent was this notion of optimizing for the intent of wealth instead of optimizing for your expertise. I think that's great advice we can all carry. So in conclusion, Jeff, any final thoughts or comments that you'd like to share as we close out out here?
- [55:18]
B
I've been doing this a while and it's been a real gift. It's a gift to be presented with a challenging puzzle to solve and to do that working with people and having an ability to have a positive impact on their lives. And so it's, yes, it's a big puzzle, but it's also a gift. And so I hope, and what I've come to appreciate is, as I do appreciate that it makes my work enjoyable and it makes, and it builds better and stronger relationships, which I appreciate.
- [55:49]
A
I appreciate that as well. And I appreciate you and all you've done for our broader community. Well, Jeff and Dave, thank you both for just a terrific conversation. The big takeaway for me is that advisors have an opportunity to move beyond managing portfolios and help families make better decisions about wealth, responsibility, business ownership and the next generation. And as we heard, that starts with the better questions, a broader view of the family, and humility to bring in the right expertise when needed. I especially appreciated the reminder that advisors should not simply optimize their own expertise, but optimize for the intent of the wealth. So advisors listening out there, go ask one better question in your next client meeting. What is this wealth really meant to do and who who needs to be prepared for it? Jeff Dave, thank you again for joining us on Managing youg Practice.
- [56:43]
D
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