"The Generational Wealth Management Maze" By: Lisa Gray A large body of work exists around the psychology and personality of investors. But what about the personalities of families? Family clients are, as every advisor knows, the ultimate prize for the investment advisor striving to attain ‘wealth advisor’ status. Thanks to the hard work of many psychologists and financial coaches, many more advisors are beginning to consider the personalities of their individual clients in an effort to build higher quality relationships with them. It would be at this point in a presentation I’d be making in front of a wealth advisory audience that I would ask for a show of hands in answer to the question, “How many of you have considered the personalities of your family clients in designing their asset allocations?” The traditional term for this personality is ‘family dynamics.’ Family dynamics have been portrayed as trains converging in a station (Strauss & Howe, “Generations: The History of America’s Future, 1584 – 2069,” pp. 28-30, Morrow/Quill, 1991) with each generational train pulling into the station at its birth and all trains collectively forming a ‘constellation’ representing that family’s unique dynamics. Another very effective analogy is that of a maze. When thinking of family personalities, the English garden maze readily comes to mind—it is a thing of both beauty and vexation. Its many ‘arms’ are unique and yet all part of the same complex entity. Since a single family member represents not only his or her own generation in the family constellation but any number of perspectives, a maze easily represents the winding pathways and ‘lost’ feeling that many families feel relative to the manner in which their family functions, particularly around the topic of their wealth.   The personality of the family consists of the following components: •        How the family communicates •        Individual and collective perceptions of roles •        Family values/family mission •        Size of family/size of wealth •        Relationships among branches •        Shared goals (or not) for the wealth   Each of these personality aspects affects decisions regarding the family wealth. Perceptions of roles as well as goals for the wealth are deeply rooted in generational perspectives. Generational perspectives largely shape the dynamics of the family. Rarely, however, is the connection between family dynamics and wealth management decisions made—either by advisors or by their family clients. Reasons for this disconnect stem from advisors’ fears of treading into ‘sensitive’ topic areas with clients to clients’ inability to know what they truly need until they ‘see’ it. What does this mean? Simply that clients want to be ‘known’ by their advisors. They want their advisors to ask the sensitive questions. That is where their deepest fears lie and also where advisors can be of the greatest help! Does it not follow, then, that astute advisors who learn the generational personalities of their family clients may more readily serve them in their best capacity?   Lisa Gray is president/CEO of graymatter STRATEGIES LLC, a consulting firm based in Memphis, TN whose purpose is to help advisors raise the level of their relationships with their clients. She has 18 years' experience in wealth management and is the author of "The New Family Office: Innovative Strategies for Consulting to the Affluent,” http://www.euromoneybooks.com/default.asp?page=4&productID=3178    **** Since our inception we have helped over 400 financial consultants make the move to independence. "I cannot express to you the joy and the increase in quality of life that I have found since leaving the wirehouse world." Shane Merritt, Branch Manager Merritt Capital Management Here Are A Few of the Benefits of "Going Independent": Payouts on all your business, including fee based accounts of 90% plus. The opportunity to build substantial equity in your business and sell it at an attractive multiple when you desire. The opportunity for you, not someone at the home office, to control your bottom line and the profitability of your practice. The opportunity to build related businesses such as insurance, qualified plans, or trust companies, and keep those revenues. 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They provide much needed transitional support to those experienced professionals who are seeking to take better control over their business lives and move to a more objective independent fee-based practice. The firm's unique turn-key asset management platform (TAMP) not only includes a wide array of traditional managed products, but also a significant offering of alternative structured investments, namely hedge funds (and funds of funds). Their advisors are able to best serve their high-end clients who desire these sophisticated products for yield enhancement, diversification, and/or hedging purposes. The company is uniquely positioned to leverage two extraordinary trends within the financial services industry: the investors' desire for sophisticated advice and their increasing demand for (and lack of) conflict-free objectivity. Most investors recognize that the financial services industry is currently plagued by conflicts of interest, operational inefficiencies, and scandals; more than ever, they seek out those advisors whose independent practices are removed from such potential abuses. The comprehensive broker-dealer services combined with a "best of breed" technology suite contributes to the advisors' successes through ongoing support, education, and training. This firm provides these professionals with all the needed support and the sophisticated investment solutions to meet the demands of their clients and grow their independent practices. Controlling Their Own Destiny: This BD allows advisors to maintain "destiny control" over compensation, marketing, employment decisions, product offerings, and expenses. Transitional Support: The firm guides advisors through an orderly transition from brokerage firm dependence to true advisor independence. Similarly, commission-based professionals are effectively transitioned to more objective fee-based compensation structures. Alternative Asset Classes: This BD provides advisors with highly specialized research and portfolio implementation on a full range of alternative investments: hedge funds, hedge-fund-of-funds, private equity capital, real estate, emerging market opportunities, and other sophisticated products demanded by their high end clients. Ongoing Training: Once the practice is established, the BD provides comprehensive education and training to help advisors remain abreast of the latest industry developments and compliance issues, while enhancing the level of service offered to their clients. 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www.BrokerBestPractices.com
www.BankBrokerBestPractices.com
www.IndependentRepBestPractices.com (*Sept 2005 REPORT AVAILABLE!)
www.FABestPractices.com (Financial Advisors)
www.InsuranceAgentBestPractices.com

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