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Speak Up or Risk Losing Your Best Clients (and Their Kids)

HNW clients want advisors they trust to engage their families in conversations about more than portfolio performance.

By Amy Castoro

Financial Advisor Neil Douthat saw it coming.

At the end of a lengthy and costly consulting engagement, Douthat, a UBS advisor in Kansas City, had worked with a wealthy client for a decade that now had a structure in place to transfer the estate to his large, multigenerational family. But it lacked a basis for settling ongoing disputes among family members. Douthat knew he had to speak up.

“A lot of time and money was spent to prepare the estate for the heirs, but no attention was paid to prepare the heirs,” Douthat said. 

Family member participation at family meetings was declining, women’s voices were not being heard, communication was top down, producing growing resentment, relationships growing apart and competition among family members, which all was negatively impacting the business.

Seeing first hand the direction the family had taken, Douthat recommended to involve a trusted family wealth transition consultant to supplement his work by addressing unmet needs of the family.

“With full family involvement, they were able to move the family in a more positive direction with regard to its wealth and harmony. Through this process, the family was able to articulate its unique values and agree on a long-term vision for the family. The communication patterns of the family that had been in place for four decades were augmented by new skills that allowed for greater trust, unity and joy.”

Douthat’s experience with wealthy clients transferring assets to unprepared heirs is all too common. “I learned a long time ago that my practice wouldn’t evolve if I sat on the sidelines. I needed to speak up when the family’s future and its wealth were in jeopardy,” he said. “Great wealth in families often comes with great dissonance.”

It’s about more than the money

Trusted advisors, like Douthat, are the ones who feel a duty to take the initiative, and even risks, by offering advice and resources in areas that clients haven’t asked about, which that may not result in compensation, but could have a more long-term impact on the family wealth. Trusted advisors help instill a culture of a healthy relationship over money, and a legacy of trust and harmony among all family members. 

Trust is at the core of building deeper client relationships and ultimately a connection with the entire family. For trust to be genuine, advisors must demonstrate reliability (doing what they say they will and when), sincerity (meaning what they say) and competence (having the skills and capacity to meet client expectations). Above all, advisors must genuinely care about the future well-being of the client and his family. They must have the competence or at least confidence to broach difficult topics, such as entitlement, concerns about how the wealth will impact the family and their relationship within and across generations, and the development of human capital.

Wealthy clients know when advisors are sincere

The degree of authenticity advisors bring to the client/advisor relationship has a direct impact on their ability to build and manage trust. Clients won’t hesitate to take their businesses elsewhere if they suspect their advisors are not sincere or appear to simply be going through the motions. Clients today make the assessment of sincerity and value based on an advisor’s level of care for the entire family, not just the portfolio performance.

The human instinct for trust is always on alert and deeply wired in all of us. Our gut feeling is a powerful tool for navigating relationships and for determining when we can trust someone. 

Dr. Albert Mehrabian, Professor Emeritus of Psychology at UCLA and a pioneer in research on non-verbal communication, asked the question, “Why do we trust someone?”  His research revealed that trusting someone’s message was influenced 7 percent by content, 38 percent by voice, tone and tempo and 55 percent by body language. If we consider voice and body language as products of our physical presence, then we can say 93 percent of the impact of our communication comes through how we say it. 

How can a technically trained advisor gain the confidence to speak up and ask clients the more personal, and often challenging, questions in an authentic way? It begins by advisors asking themselves: 

  • Do I truly care about whether or not my client families stay intact and continue to prosper after wealth transfers? 
  • Do I have first-hand experience or a familiarity with the outcomes of a family divided by its money? 
  • Perhaps most importantly, can I offer guidance, such as introducing the benefits of a family wealth transition consultant, to families who are struggling with dissonance among family members or have concerns about constructive wealth transfer and heir readiness? Fulfilling the role of trusted advisor should include knowing other advisors, such as family coaches, who work collaboratively.

Earning trust

In their book, Building Trust: In Business, Politics, Relationships, and Life, Robert C. Solomon and Dr. Fernando Flores talk about the need to establish a “shared understanding” so that clients feel their core needs are met and legitimatized. A core need of every family leader is to know the wealth will not result in family deterioration. Trust is earned when advisors take the time to understand the core needs of their clients beyond the return sought on investments to maintain lifestyle:

  • Does the family have a mission statement that spells out the overall purpose of its wealth?
  • Are the heirs familiar with at least the general framework of the family estate plan and have been included in its implementation? If not, why? 
  • What is the biggest fear regarding the impact of the wealth on the family?
  • Are younger family members encouraged to participate in family philanthropy and/or investment decisions?
  • On a scale of 1-10, what is the level of trust among siblings? Why isn’t it a 10? 

Be relentless ... your clients will

When sincerity is in question on either side, any relationship is weakened. And when turbulent times occur, the strained relationship may not be able to weather the storm. Odds are your clients are assessing you (as distinct from your performance) relentlessly; their instincts are a formidable tool for them and you could be missing a powerful opportunity to build trust through authentic and caring communication.

Dr. Flores writes, “Trust is destroyed by cordial hypocrisy.” Cordial hypocrisy is manifested when advisors avoid the tough calls with clients. As an advisor, how do you assess the level of accountability, authentic communication, collaboration and alignment between you and your clients? One measure might be how willing clients are to introduce you to their families and open the door to multigenerational financial management.

Building and maintaining trust is not a one-time event, but an ongoing set of practices that are routinely observed, tested, refined and managed.  Markets change, clients get nervous and the competition comes out with a great product. You will be successful in weathering these times if you have established a strong foundation of trust. 

Clients want advisors they trust to engage their families in conversations about more than portfolio performance. Clients want their advisors to help prepare their heirs to be responsible stewards of wealth. Continually ask, and even push, clients to consider the desired ends or purposes of their wealth and whether heirs are prepared to oversee the stewardship of the family’s financial resources and the development of its human capital.

If you have not built a meaningful relationship with both spouses and the children regarding wealth, the inheriting generation will find another advisor. Getting the client to introduce you to the children and grandchildren requires trust and when necessary to speak up.


Amy Castoro is the President of The Williams Group and co-author of the book, Bridging Generations: Transitioning Family Wealth and Values for a Sustainable Legacy.

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