Screaming, Shouting, Weeping - aka the Family Is Your Client: Part 3 of 9

A multi-part conversation with Cannon Executive Chairman Phil Buchanan

A few people scream. Others shout. Several weep. Has a calamity just occurred? No. This is the semi-annual meeting of the Jones family. Not their real name but a real family comprised of a patriarch, his third wife, six children, two sons-in-law, and a poodle.

I attended these meetings because I was the trust officer assigned to the account. The patriarch controlled all the money and he presided over these meetings—such as they were—which he held in the living room of his beach-front condo in South Florida. Despite my suggestion of different of “best practices” for such gatherings, he employed a format of his own which created anxiety and ill-feeling rather than harmony

After I spent thirty minutes giving a summary of his portfolio, the patriarch told each child and his third wife how much money they were going to get when he died. The amounts were not equal and they would change from family meeting to family meeting. That was the exact point at which the aforementioned screaming and weeping began as the beneficiaries argued over how much they were to receive. (One of his sons and one of his daughters pleaded for more money with such heart-wrenching performances they could have been Emmy-award winning actors).

I would dismiss myself to the far end of the room and look out over the calming waters of the Atlantic Ocean, hoping to become invisible. After being subjected to an hour of various arguments by his children over the inadequacy of the sum they were to receive upon his departure for Elysian Fields, the patriarch would bring the meeting to a close with this ritual phrase: “let’s not wash the family linen in front of our trust officer from the bank.”

Since I had been attending these meetings for several years, I had come to feel more like their laundryman than their trust officer since they washed and re-washed the family linen in front of me so often. Indeed, I had come to know everything about the family, much of which I neither needed nor wanted to know.

After hearing me tell this story, Phil Buchanan, Cannon’s Executive Chairman, remarked, “Well, I can’t recommend this method as a ‘best practice!’  Nonetheless, if you are an FA, you need to know all the relevant facts and emotional cross-currents about the families of your clients.” Phil suggested FAs gather this information in a planned way rather than taking notes in the middle of a family battle.

A key priority for every FA is getting to know the partners of her clients. Why? “As your clients ease into retirement, spouses or partners who heretofore have been silent in the typical advisor-client relationship will now come onto the stage,” said Phil.  “They helped build this jointly owned nest-egg and now they quite rightly want a say in how the accumulated money will be spent.”

Phil went onto say that the “silent partner” is often the female spouse or partner. Statistically, women live longer than men so women will eventually control a large portion of a family’s wealth. Said Phil, “traditionally in the wealth management business, a woman’s voice is often not heard as clearly or given the weight of what a male says. A wise FA will ensure he or she knows and understands both the female and male partners in a relationship. This isn’t a question of ‘political correctness.’ It’s just good business practice.”

Phil concluded by pointing out that FAs really need to understand that the definition of ‘family’ itself has changed dramatically. The mental picture many    have had of the classic ‘American family’ is a married heterosexual couple living together with their children. Yet according to the US Census Bureau, this classic ‘traditional family’ comprises only 19% of families in America. *

Said Phil, “Family Guy is one of the most popular sitcoms in the US yet even this most ‘politically incorrect’ of shows which pokes fun at American society features a working Dad, stay at home Mom and three kids. Is the show often hilarious? Yes. Representative of real-life family structures in the US? Not even close.”

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Sources/Resources:
* http://blogs.census.gov/2013/1...

Contributing Writer: Subject Matter Expert Charles McCain