Family Meetings: Institute Professionals Offer Advice on How to Get Things Right
Successful families tend to have successful family meetings, according to an article in Barron’s Advisor magazine that quotes three Institute members, Jim Grubman, Kathy Lintz and Jonathan Bergman. Grubman, who serves as Content & Curriculum Chair for the Institute, says advisors should “expect strong differences of opinion among family members and always be ready to diffuse conflict before it gets out of hand”. Says Lintz, “Family meetings are about setting the family up for future decision-making.” She is an Institute Director and Partner in Matter Family Office. Bergman, a UHNW Institute Advisory Board member and President of TAG, states “Family meetings are critical milestones for families of wealth, the way that parents measure their children’s growth. (Read the full article below or access it here.)
Want to Serve Ultrawealthy Clients? Learn How to Run a Successful Family Meeting.
By: Charles Paikert
April 20, 2022
For the ultrawealthy, official family meetings are serious business—especially when they concern financial matters.
Meeting topics can include investing, estate planning, philanthropy, the family business, and preparing younger generations to assume leadership. Because these clans possess assets totaling tens of millions of dollars—or more—the stakes of big decisions can be high.
Advisory firms are increasingly hoping to add wealthy families to their client roster by offering family office services. To win the confidence of multigenerational, ultrahigh-net worth families, the ability to conduct a successful family meeting is absolutely essential, industry experts say.
“Family meetings are critical milestones for families of wealth, the way that parents measure their children’s growth,” says Jonathan Bergman, president of TAG Associates, a New York-based wealth management firm. “Families want to ensure that what they’ve created continues into the future, and family meetings measure the progress of financial stewardship, education, responsibilities, and values.”
While substantial wealth is the starting point for family meetings, the money itself often is not the point, experienced facilitators say.
“Family meetings are about setting the family up for future decision-making,” says Kathy Lintz, partner at Matter Family Office in St. Louis. Family wealth consultant Jim Grubman, who has facilitated hundreds of family meetings, goes a step further.
“Transferring decision-making is often more important than transferring the money,” Grubman says. “Shared decision-making is really what family meetings are about.”
So what are the secrets of facilitating a successful family meeting?
“Start by defining who actually is a family member and who should be included,” says Rebecca Meyer, partner at consulting firm Relative Solutions. “What age groups should attend? Should spouses be there? Extended family? Outsiders? The family should decide, but advisors can help facilitate.”
Not everyone will be enthusiastic. “Start with the willing,” advises Grubman. “You can also start with smaller groups before bringing everyone together.”
Talk to the family members who will attend. Find out what’s on their mind, what their concerns are. “Pre-calls with each individual is a must,” Lintz says. “Never do a family meeting without a pre-call. It opens doors that might otherwise have been closed.”
Find the right location where everyone is comfortable. “Neutral is best,” Bergman says. “We have meetings in our office, but some families may prefer a hotel or a resort where everyone can stay for a weekend. But they shouldn’t meet in someone’s home or place of business.”
What about virtual meetings?
Meeting over Zoom can make scheduling easier and give participants opting to stay in the comfort of their homes “a greater sense of security,” Meyer says.
Not surprisingly, more families are having virtual meetings since the pandemic, according to Grubman. But in-person is still better, he maintains: “You can’t pick up important nonverbal cues on a screen or replicate the closeness of being together in the same place.”
In some cases, where families prefer remote meetings, Grubman recommends keeping them structured, with frequent breaks.
Whether the meeting is in-person or over Zoom, it’s important to set ground rules. Family members must respect each other and speak for themselves, not others. Everyone must be fully present, patient, and accept differences of opinion. And no distractions: no phones or tablets.
“Privacy is absolutely essential,” Grubman adds. “Turn off phones, avoid hotel staff coming in and out, no large glass walls, no name on hotel placards.”
Set an agenda with the family. Topics may include estate planning, the family business, investments, philanthropy, family governance and education.
Even more important than specific topics is the format of the meeting. Is it a report or a dialogue? The latter is usually the better choice.
“It’s not always easy, but you really want to promote an open dialogue among family members, where no one is afraid to speak up,” says Neil Shapiro, a managing partner at TAG who runs family meetings for the firm’s wealthy clients. “That’s what’s going to give the family the flexibility they need to address needs as they develop in the future.”
As the meeting unfolds, issues will arise—issues that often have very deep, and sometimes painful, psychological origins. Often, they revolve around who gets what in an estate plan.
“Distribution of assets is a difficult issue,” Lintz says. “Advisors have to remind family members that fair isn’t always exactly equal.”
Advisors should advocate for full disclosure from parents, she adds. “The most common obstacle we face is the ambivalence of the first generation to be transparent with the second.”
Entwined with issues of distribution of assets is that age-old tension: sibling rivalry. And helping to resolve conflicts among siblings can be a tall order.
“In an early family meeting, things turned around so quickly for sisters with longstanding conflict that they all ended up hugging each other, reconciling,” Grubman recounts. “It felt like an episode of the Dr. Phil show. But I knew enough to assume this was probably an unusual event and not to expect it very often. I turned out to be right. That kind of magical reconciliation is heartwarming but pretty rare.”
Grubman recalls one wealthy family headed by an aging, strong-willed father who had five children. At family meetings, one of the patriarch’s daughters who was very much like him tended to dominate. Her siblings were more easygoing but wanted more input.
Grubman was brought in to defuse the tension and told the siblings they needed to collaborate and determine how to share decision-making. “I told them they first had to recognize their old habits,” he says, “and then establish how they were going to deal with each other as a family.”
Sometimes spouses can inflame conflicts among siblings. For example, Meyer recalls sisters whose husbands appeared to be mortal enemies regarding the family estate, driving a wedge between the families. When she asked the sisters to meet her without their husbands present, they were able to resolve their differences.
Tensions within extended and blended families are far from uncommon.
“Working with blended families can be very hard,” says Lintz. “The husband and wife may not agree on allocation of resources [to children from previous marriages] but have ignored talking about it. Encourage transparency early on and develop a strategy so the family can communicate what they’re thinking.”
Even if deep-seated personal issues can’t be completely resolved, establishing a sense of fairness and trust is critical.
“Facilitating a family meeting is about brokering fairness,” Shapiro says. “You want to encourage parents to disclose relevant information, which is a way of signaling their intention of fairness.”
Advisors must promote fairness no matter who pays the bills, Meyer cautions.
“You can’t just listen to the parents or you’ll get blindsided,” she says. “If you become an agent of the founder, even if they’re paying you, it will be difficult to gain the trust of the other family members.”
Collaboration should also be used to promote trust.
“One of our big goals is to get family members to learn how to collaborate across generations and practice working together,” says Meyer. “They realize that Aunt Jane, who was quiet and overlooked, has talents they weren’t aware of. Things go much more smoothly when people know each other better.”
Lintz recalls working with parents in their 70s who were reluctant to disclose their complete financial information to their children, who were in their 40s. Lintz suggested they work together on portfolio construction, which gave the parents greater confidence and led to full disclosure of all their assets.
Facilitating family meetings also requires having good negotiating skills, according to Grubman, who has a Ph.D. in clinical psychology.
“Communication leads to understanding, while negotiation leads to resolution,” he explains. “Communicating well means conveying your views and hearing the views of someone else effectively. When communication is matched by collaboration and good negotiation, you can create solutions that can be implemented.”
Expect strong differences of opinion at family meetings, Grubman adds, but be able to distinguish reasonable tension from dangerous conflict.
“When differences escalate or seem intractable, tension can escalate into dangerous—and damaging—conflict,” he says. “A good family meeting tolerates tension and seeks to understand differences, normal to human relationships. But when families allow tolerable tension to become dangerous conflict, they often lose the ability to solve problems and negotiate proposals.”
Advisors conducting family meetings should also keep in mind the maxim “physician, heal thyself,” Meyer says.
“You’re going to see multigenerational patterns of behavior play out among family members,” she says. “They keep recurring and lead to fixed positions, which can make resolving issues difficult. You want to help the family break these patterns and make a different choice before World War III breaks out. But to do that, it’s very helpful to first examine your own family dynamics and recognize the patterns in your own situation.”