SELF TEAM TRANSPARENCY SYSTEMIC FORCES EMPATHY
We often get asked the question, “who is your client?” For many advisors, the answer is “the person who initiated the work, or whoever is paying for the service”. Since sustainability of the family considers the well-being of each of the individual members, alignment requires consideration for the opportunities and challenges of each family member within the context of the whole.
The resources most families have are the result of wealth created more or less from commercial enterprises. In many cases, these businesses are a dominant concern and even threaten to eclipse the central well-being of the family. Issues that emerge when families work together in operating businesses and the attending transitional complexity associated with family ownership, are frequent “presenting problems” brought to us for scrutiny and solution.
Whether stewarding large or moderately large asset bases, families often have a more or less formal and articulated family office of some kind or another. The structure, systems and processes of these offices can support or undermine what the family is trying to accomplish at various stages in the life of the family’s liquidity and asset concentration strategies through time. As a family’s “second family business,” they are also subject to all of the complications of running any business that is family owned and seeks some form of sustainable contribution to the family’s well-being.
Invariably, there is a more or less trusted and capable set of advisors that are part of the family’s enterprise system. Who they are, what role they play, and how well they function as a team is often extremely important. Clarifying which family members turn to which advisors for what kinds of advice and counsel is extremely important to understanding how our work can complement, support, and sometimes shake up what is going on in the advisory team.
Families have varying forms and approaches to investing, and investments that are variously well or poorly managed. They are often a source of concern for families, and family members typically have a range of relationships to key investment processes on a continuum of complete lack of interest to near obsession. It is not unusual for a family to need to get their investment program right so that they can pay better attention to the other elements of the alignment system that may be crowding out well-being agendas.
Because many of these families have outsized financial resources and influence, they also have amplified social footprints, whether in the form of philanthropic endeavors or public personas. Issues of social identity and personal security are often part of this dimension. Families are increasingly interested in applying consistency across all of their enterprising activities.
This element refers to the reserve of intellectual resources and skills a family has—and the developmental agenda that is either present or not. This dimension of the system illustrates how a family is poised to grow, develop new leaders, contain various forms of intellectual capital, and how their strengths and weaknesses are understood opposite financial and non-financial family objectives.
Attraction and retention of high quality client relationships and employees is the backbone of organizational stability, and is maintained through proactive communications and management related to ownership, recruitment of key talent, client service delivery, business infrastructure, and financial staying power. Proactive business leadership is required to execute on these strategic imperatives and anticipate business bottlenecks, providing stability through inevitable organizational transitions.
Business stability is supported by an advisors ability to grow, creating organizational vitality required to attract and retain high quality clients and employees. As such, a strategic commitment to business visibility and relationship development needs to be in place to define a market message, qualify relationship opportunities, understand changing market forces, and internalize real-time external feedback.
Wealth advisors must meet the highest standard and disciplines for allocating capital across the global investment landscape, and across asset categories, to achieve client objectives. Process priorities need to be clarified related to client needs discovery, strategic allocation, macro analysis, asset allocation, captive investments, manager due diligence, capital deployment, and reporting. Additional resource allocation choices need to be made relative to ever expanding coverage that considers passive, active, alternatives, private, social, as well as global strategies and vehicles.
The breadth of wealth advisory services is only expanding given client life expectancy, legacy considerations, intergenerational communications, and increasing solution-set complexity. Advisors require the capacity to be experts across a full array of services domains, access other advisory resources as needed, as well as facilitate complex family system alignment. Intimacy considers form and frequency of communications, access to senior level personnel, empathic capacity, and responsiveness to requests based on the implied or explicit value promise and fees.
To support client solution development and implementation, given an expansive set of client services and investment management options, an organization must demonstrate collaborative decision-making and a technological capacity for gathering, synthesizing and reporting key wealth management data. Data management integrity also considers client accessibility, demonstrated expertise managing third party providers, as well as contingency, privacy and security implications.
Client solutions reach across accounting, tax management, insurance, trusts, estate planning, banking, financial planning, philanthropy, and a host of other wealth services. In order to plan and execute on custom client priorities, advisors need the personnel and process management capacity to coordinate projects and communications with a client’s entire wealth advisory team.
Business sustainability through the lifecycle of an advisory firm is driven by constant alignment of ever evolving interests across three primary stakeholder groups: employees, clients and owners. Different tensions arise at various stages of organizational development related to balancing culture, business investments, growth, service quality, delivery structure, capability development, and financial results.