Many family offices and wealth management firms promote their client-centered approach, yet the physical environment of the firm's office speaks "financial" or "business" more than "client." Conversations about difficult personal issues and family dynamics can feel impersonal across a large conference room table, stifling discussion and limiting how much clients will really disclose what's on their mind. The room must fit the purpose of family wealth advising, encouraging conversations not only between advisor and client but between different generations or branches of a client family.
Many of the firms Jim Grubman has consulted to have established what they euphemistically call a "Grubman Room" - a living-room atmosphere of comfortable chairs, sofas, and tables where client meetings can be held. Modern technology is available via flat-panel monitors, wireless input devices, and computer servers, yet these are discreet and secondary rather than the main focus of attention. Every firm implementing this type of room has found that clients embrace the environment, conversations go deeper than ever before, and most clients don't want to go back to meeting in a fluorescent-lit, conference-table-dominated room again.
The following YouTube video describes an interview between a journalist and renowned AIA/LEED-accredited architect, Doug Quackenbush of Quackenbush Architects + Planners, concerning the design and implementation of one such room at Abacus Planning Group in South Carolina (main description occurs between times 04:00 and 07:40):
How to Design a Financial Advisor's Office - YouTube video
Most financial advisors find that overspending clients represent some of the most frustrating situations in their work. Time spent with these clients is often ineffective and ultimately unsuccessful. This article, co-written with colleagues Kathy Bollerud Ed.D. and Cheryl Holland CFP, provides an overview of addictive-type overspending and what advisors can do to help it.
Motivating and Helping the Overspending Client: A Stages-Of-Change Model - Journal of Financial Planning, March 2011
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.
Many families of significant wealth have a single family office (SFO) to serve the complex needs of their family members. Yet there are increasing advantages to shifting some or all family-office functions to a multi-family office (MFO). The following article, co-written with Jill Shipley MBA of GenSpring Family Offices, discusses the factors involved in considering such a shift.
Helping Families Transition from A Single-Family Office to A Multi-Family Office: Reasons, Risks, and Recommendations - IMCA Investments & Wealth Monitor, September/October 2011
Many families are interested in holding family meetings but are confused about the process. Run successfully, family meetings contribute immeasurably to the long-term health of the family and its legacy. This whitepaper (a collaboration with a former family-office subsidiary of Wachovia Corp.) helps outline essential principles of family meetings as a core part of basic governance and communication processes for families of wealth.
Should We Have a Family Meeting? - A Calibre White Paper, Spring 2007
Moments of major change for clients can occur due to job loss, the recent passing of a loved one, or even a sudden windfall of wealth. Advisors can offer unique value by helping clients steer a steady course through the turbulent emotions associated with these events. This webinar for State Street Global Advisors discusses the psychology of three life-changing events, offering useful guidance for how to listen and respond to a client with patience and wisdom.
Clients in Crisis: The Financial Psychology of Life Changing Events - SPDR University webinar
Many high-net-worth advisors want to help clients open communication within the family about legacy issues, inheritance conversations, and financial literacy education. This white paper, developed for Pioneer Investments, outlines the fundamental concepts, activities, and business aspects for this service area in wealth management. A resource guide accompanies the material.
Evolving Your Practice - Pioneer Investments White Paper
Many estate plans and wealth transfers fail, not because of technical problems with their design but because family dynamics and communication problems get in the way. It is crucial for beneficiaries to be ready to receive wealth transfers. Otherwise, the best-laid inheritance plans of wealth creators and their attorneys will not succeed. This article, co-authored with colleague Kathleen Burns Kingsbury, discuss these issues for advisors and clients.
Ensuring Success In Wealth Transfers: Involving and Preparing the Beneficiary - IMCA Investments & Wealth Monitor, October 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
Jim Grubman works closely with State Street Global Advisors through their online practice development service, SPDR University. Through innovative webcasts, resource materials, and whitepapers, he is on the forefront of training in the financial services industry, guiding professionals towards a deeper understanding of the issues clients face and how to address them with trust.
Visit SPDRU to view, hear, and download content useful for HNW financial advising such as the following:
Bridging the Trust Divide - This whitepaper with associated webcast and podcast (requires free registration) by State Street Global Advisors and Knowledge@Wharton explores key elements of trust in the advising relationship. Jim offers commentary on the research findings plus a down-to-earth set of recommendations about the highly-charged area of fee discussions, an area where many advisors fall short.
Effective Fee Discussions with Clients: 2011 - In an expansion and updating of the topic of fee discussions from Bridging the Trust Divide, this advisor resource goes into depth about understanding and handling communications with clients about fees.
Managing Clients' Reaction to Risk - This cutting-edge use of web technology provides video coaching by Jim Grubman using an interactive format to help advisors talk effectively with their clients about risk. Through three different client scenarios, advisors choose answers and get immediate feedback about the effectiveness of their responses.
The Financial Advisor's Guide to Active Listening - This easy-to-follow resource, combining both text and diagrams, explains how to use active listening to go deeper in conversations with clients.
Listen Before Advising: Using Structured Interview Techniques to Satisfy Clients - In a question-and-answer section in this webcast with Hannah Shaw Grove, Jim helps discuss how advisors can get to know what's important for clients, deepening and improving the advising relationship.
Every interaction in wealth management can be characterized along two dimensions: the complexity of the client's technical needs and the complexity of the client's personal and family needs. Advisors often attend mostly to the technical dimension, addressing clients' personal issues or family dynamics only when these are overly problematic. Yet, excellent wealth management requires advisors to have a solid foundation in client relationship skills as well as good basic knowledge of family-dynamics situations that commonly arise with wealth.
In an ongoing series of comprehensive articles, Jim Grubman and colleague Dennis Jaffe outline new ways to conceptualize, assess, and implement client-relationship skills and services in integrated family-office-level wealth management.
Client Relationships and Family Dynamics: Competencies and Services Necessary for Truly Integrated Wealth Management - The Journal of Wealth Management, Summer 2010
The Huxtables or the Sopranos? How to Assess a Family's Complexity Factor Early in the Recruitment Process - Private Wealth Magazine, December 2010.
The first published description of the Two-Axis Model was written by Jim with colleague Keith Whitaker for the Family Firm Institute's online journal:
A Two Axis Model of Financial Advising - FFI Practitioner, November 2008.
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.
Resource Guide for Financial Literacy and Estate Planning (pdf)
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
and,
The ABC's of 123's: Helping Clients Raise Financially Intelligent Children: Webcast for Clients with pdf handout for Clients
