On April 12, 2012 Jim Grubman moderated The TH!NK Forum panel, sponsored by Ballentine Partners at the Ritz-Carlton in Boston, to explore the question: "How Much Is Enough?" With 80 attendees consisting of both clients and advisors, the panel held a thoughtful discussion about the many issues impacting wealth transfers. The main themes emphasized family communication, preparation of heirs to receive wealth transfers, the role of philanthropy, and how to address the anxieties each generation has about inheritance planning. An additional podcast of the panel discussing audience questions that were not able to be answered at the time of the event can be heard here.
Many families are interested in holding family meetings but are confused about the process. Successful family meetings contribute immeasurably to the long-term health of the family and its legacy. Good ground rules are crucial for safe, respectful communication. Click on the following link for a list of helpful guidelines.
The following whitepaper (a collaboration with a former family-office subsidiary of Wachovia Corp.) helps outline essential principles of family meetings as a core part of governance and communication for families of wealth.
Should We Have a Family Meeting? - A Calibre White Paper, Spring 2007
The following articles outline the many problems inherent in incentive trusts and offer a groundbreaking alternative: the Financial Skills Trust (FST). This new approach to trust design - co-developed with colleagues Jon Gallo and Eileen Gallo of Gallo Consulting - integrates estate planning with what experts have learned over the past thirty years about the most important financial skills needed in adult life. Further delineation of the principles and procedures behind the Financial Skills Trust and the Results-Oriented Trust Environment™ (ROTE™) will be forthcoming in 2012 along with sample draft language and client situations. See links to Services for Families or Services for Advisors for more information on available training and consulting about the FST and ROTE™.
Not Your Typical Incentive Trust: The ROTE and FST: Part 1 and Not Your Typical Incentive Trust: The ROTE and FST: Part 2 - two companion articles from Journal of Financial Planning, April, 2011
The Use and Abuse of Incentive Trusts: Improvements and Alternatives - from the Proceedings of the 45th Annual Heckerling Institute on Estate Planning, January 2011.
Great role models can help foster crucial skills and attitudes about money for the next generation. This article for the Pitcairn Family Offices client newsletter provides down-to-earth advice for grandparents wanting to do the best they can for their grandchildren in learning about money and ultimately about wealth.
Of Treasured Kids and Treasure Hunts - Pitcairn Family Offices newsletter, November 2010
The broad population of affluent families contains many high-achieving individuals with ADHD and/or learning disorders (LD). In one of the few published articles on this important topic, Dr. Jim Grubman and colleague Dr. Jerry Schultz discuss one family's situation and how the strengths and stresses of ADHD/LD can be managed successfully in wealth management.
Whirlwinds and Wealth: Entrepreneurs, ADHD, and Wealth Management - Wealth Manager Magazine, July 2010
Understanding Differences between Wealth's Immigrants and Native-born Citizens
A surprising statistic is that typically 75% - 80% of wealthy households have come to wealth within their lifetime. Only about 20% of the wealthy have been raised with inherited wealth. First-generation wealthy families ("New Money") are much like immigrants, having traveled from the economic culture of their birth to a much higher economic level, what we might consider "the Land of Wealth." Lottery winners, recipients of sudden windfalls, and those marrying into wealthy families from modest backgrounds are immigrants of a different type who make the journey suddenly. The affluent who were born into wealthy families and raised in fortunate circumstances ("Old Money") are akin to "natives of the Land of Wealth" and have different perspectives on money, life, and identity.
Many of the stresses experienced by individuals and families of affluence are similar to other types of immigrant experience, including the strains between first-generation parents and their native-born children and grandchildren. This analogy is explored in a series of articles for families and wealth managers, with recommendations for how to approach these issues by the trusted and thoughtful advisor.
Immigration To The Land of Wealth - (with colleagues Dennis Jaffe and Keith Whitaker) Private Wealth Magazine, March/April 2009
Immigrants and Natives to Wealth: Understanding Clients Based on Their Wealth Origins - (with Dennis Jaffe) Journal of Financial Planning, July 2007
Acquirers' and Inheritors' Dilemma: Discovering Life Purpose and Building Personal Identity in the Presence of Wealth - (with Dennis Jaffe)The Journal of Wealth Management, Fall 2007
One of the worries most consistently voiced by affluent families is how to raise children who are productive, motivated, responsible, and generous. This task is difficult not only for parents who have acquired wealth during their lifetime but also for parents raised amid wealth themselves. See the links below for written and web-based resources about financial literacy, parenting skills, and family-oriented estate planning.
Taking the Time to Teach - A whitepaper developed in conjunction with Calibre, a former family-office division of Wachovia (now Wells Fargo) - May 2006
In collaboration with State Street Global Advisors, the following resources outline the basics of financial literacy for advisors and clients in two webcasts plus client handout. Each emphasizes the importance of starting early in building sound relationships with money for children (webcasts require free registration):
The ABC's of 123's: Helping Clients Raise Financially Intelligent Children: Webcast for Advisors
The ABC's of 123's: Helping Clients Raise Financially Intelligent Children: Webcast for Clients with pdf handout for Clients
A great financial advisor is not unlike a great doctor. Like healthcare professionals, advisors must be skilled in technical knowledge while highly adept at empathy and support. Financial advising is, at its core, a helping profession.
Financial service clients can and should expect their advisors to be trustworthy, attentive, and compassionate. What should you do if these qualities are missing in the advising relationship? This article addresses the tricky but important steps to be taken to insure the relationship succeeds.
Creating Great Relationships with Advisors - The More than Money Journal, May 2005
Many families tend to avoid talking about money, unfortunately with wide-ranging consequences. Children can be left in the dark about how to think about money or handle their finances, creating needless mystery and anxiety around money. This anxiety gets carried into adulthood and passed on in marriages and in parenting, thereby repeating the pattern.
Wealthy families are not necessarily more adept at talking about money than middle-class families. They may in fact communicate less, due to a culture of secrecy around wealth. Yet affluent parents possess much information which the children eventually need to know. All too often, this information doesn't come out until circumstances force the issue.
There are ways to understand the differences between healthy privacy and unhealthy secrecy. The following article can help clarify know how and when to face anxieties and break the silence around money.
Privacy versus Secrecy - The More than Money Journal, Winter 2001.