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What Can You Learn from a FOX? Part 3

Open Architecture? Isn’t that a Computer Term?

This will be the third and final blog post on ideas that came out of the recent Family Office eXchange workshop that we recently attended in NYC. In my latest post, I mentioned that this term through me for a bit of a loop when I first heard it during the personal intros that all the participants were asked to make.

A man was describing the Multi-Family Office that he worked for, and was proudly stating that they were 100% “open architecture”. I recognized that phrase, having heard it in the past, but I was pretty sure that it had something to do with computer programming.

Putting it into the context of what the man was saying, and hearing it again a couple of other times later that first morning, it began to make sense to me. But the surprising part for me was not that this firm was 100% “open architecture”; it was that any other firm would NOT be. Let me explain.

This man was right to be proud of his firm, because their policy was to offer their clients all sorts of investment products and services, offered by all sorts of companies. That sounds great, and it is. But what, then, do other firms do? This sounds like a great idea, offering your clients choices, allowing them to pick and choose various investment products and services from every possible vendor.

But that is my point. It is so obvious to me, and hopefully anyone reading this, that this is the way that advisors can best serve the needs of their clients.  So why doesn’t everyone do it?

My father used to say that there are really only two reasons to do something: for love, or for money. When some advisor suggests that you invest in the financial products that just happen to come from the same employer that they work for, do you think that they are doing it for love? Me neither.

The move to open architecture is long overdue, but it is proceeding at a snail’s pace. A Google search of the term landed me on the website of a large US trust company, which had a brief document that talked about the use of open architecture by trustees.

“Conflicts of interest often occur when institutions offer only proprietary (in-house) products”. It also spoke of “clients’ uneasiness over lack of objectivity”, and ended with a statement about a new definition of the term “trusted advisor” that “provides the best advice possible without limitations on choices of investment options”

That document was dated less than a year ago. What took you so long? Then I came across a recent issue of Barron’s magazine with a story on the subject. It noted that some firms started offering open architecture  “Ten or more years ago”, but that others are just getting around to it.

Unfortunately for Canadians, many investment trends seem to take a while to reach across the border. A bit like multi-family offices. But they do go well together. We don’t have any products to sell, so it’s a no-brainer for us.

Back to my dad again: “Selling is reducing your inventory. Marketing is solving the customer’s problem.”  Personally, I hate selling, and I always have. The only thing we are “selling” now is our services, which, when you think about it, is really marketing. We know that there are people facing the same sorts of situations and problems that we have dealt with for years.  And we know that we can help solve them.

I always did like marketing better than selling.

Steve Legler “gets” business families.
 
He understands the issues that families face, as well as how each family member sees things from their own viewpoint.
 
He specializes in helping business families navigate the difficult areas where the family and the business overlap, by listening to each person’s concerns and ideas.  He then helps the family work together to bridge gaps by building common goals, based on their shared values and vision.
 
His background in family business, his experience running his own family office, along with his education and training in coaching, facilitation, and mediation, make him uniquely suited to the role of advising business families and families of wealth.
 
He is the author of Shift your Family Business (2014), he received his MBA from the Richard  Ivey School of Business (UWO, 1991), is a CFA Charterholder (CFA Institute, 2002), a Family Enterprise Advisor (IFEA 2014), and has received the ACFBA and CFWA accreditations (Family Firm Institute 2014-2015).
 
He prides himself on his ability to help families create the harmony they need to support the legacy they want. To learn how, start by signing up for his monthly newsletter and weekly blogs here.
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What Can You Learn from a FOX? Part 2

Transactions Vs. Transitions

My last blog was about the FOX workshop that Tom and I attended in NYC a little over a week ago.  I ended it off talking about the “discovery” process, which can be summarized as follows: If you want to get somewhere, first you need to figure out where you are now.

It all sounds so simple, but as I often say, simple does not always mean easy. In fact, it rarely does.  What does help to do difficult things, though, is to have them explained in simple terms. I pride myself on being able to do that.

One of the major themes that came through at the FOX conference was that advisors in our business are sought after in times of transition.  It is also at these times that our value to our clients is most apparent.

The transition we most often associate with family businesses is succession. It is one of those subjects that seems to get put off, for a couple of major reasons. Number one is that the founder is too busy running their business to “waste” time on such things. The second reason is that it is not as easy as it sounds.

It is simple to say that you should have a succession plan, but not easy to come up with one and put it in place. But succession is just one of the major transitions that come up, and unfortunately most of the other transitions suffer from the same “sounds simple, but isn’t easy” reality.

At the conference the attendees related stories about selling a business, divorce, remarriage, illness, death, children entering or leaving the business, family disputes, reconstituted families, placing people in nursing homes and even in rehab. We pretty well ran the gamut of things that can happen to a business or wealthy family.

The point I want to make here is that at times like these, it is reassuring to be assisted by people who help you focus on the big picture. These are major events, and often major transitions in the evolution of the family.
Many advisors look at only one small portion of the picture, and that is usually fine as well. But allow me to bring in the other word from the title of this blog: Transactions. A transaction is simply a one-time event.

You buy 1000 shares of a stock in your account, and you get a transaction slip. You go to your notary to sign a document to sell a property, it gets recorded, you get an invoice; more transactions.

These transactions are usually handled by specialists who handle these types of transactions every day, all day long. You cannot expect them to have the big picture view to advise you when it comes to the transitions in your life.

It is not always easy to find the kind of advice that you are looking for. Trust is a HUGE issue, as it should be. But right along with trust is objectivity. Yes, objectivity.

An objective advisor is someone who helps you decide what to do and how to do it, without regard to how he/she (the advisor) can benefit. Please do not forget about this when deciding whose counsel to take.

I will deal with that in my next blog, where we will get into another new term that we came across at FOX, that of Open Architecture.  It took me a minute or two to figure out what the others were talking about when they used that term, and I needed to explain it to Tom at the coffee break.

I will put up a blog on the subject in the coming week. I hope it will be informative, and as usual, I will try to keep it from being technical.

Steve Legler “gets” business families.
 
He understands the issues that families face, as well as how each family member sees things from their own viewpoint.
 
He specializes in helping business families navigate the difficult areas where the family and the business overlap, by listening to each person’s concerns and ideas.  He then helps the family work together to bridge gaps by building common goals, based on their shared values and vision.
 
His background in family business, his experience running his own family office, along with his education and training in coaching, facilitation, and mediation, make him uniquely suited to the role of advising business families and families of wealth.
 
He is the author of Shift your Family Business (2014), he received his MBA from the Richard  Ivey School of Business (UWO, 1991), is a CFA Charterholder (CFA Institute, 2002), a Family Enterprise Advisor (IFEA 2014), and has received the ACFBA and CFWA accreditations (Family Firm Institute 2014-2015).
 
He prides himself on his ability to help families create the harmony they need to support the legacy they want. To learn how, start by signing up for his monthly newsletter and weekly blogs here.
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What Can You Learn from a FOX? Part 1

Discovering “Discovery”

Last week was a very interesting one for me, as I had the opportunity to do a lot of actual learning about the “new “ industry into which TSI Heritage is now immersing itself.

I put the word “new” in quotation marks for a couple of reasons. The area of managing wealth for people outside my own family is still new to me, but that is not the only reason to highlight that word.

Late last year I discovered an organization called FOX, which stands for Family Office eXchange, and once I discovered what they were all about, I knew that we needed to join.  After attending a FOX workshop in Miami in February, it was now time for both Tom and me to attend a new workshop of theirs in NYC.

This workshop was aimed at MFO’s, or, Multi-Family Offices, a subject that I touched on in one of my earliest blog posts. While the idea of MFO’s is already prevalent in the USA, is still a relatively new concept here in Canada.

The good news for us was that while we are relative newcomers to the industry, we were in fact well prepared for the workshop by virtue of the planning and preparation that we had done in setting up our business. Just about everything that we have set up on our website, from service offerings and pricing, to staffing and investment issues, were all pretty much the same as those we learned about. We did not have many “A-Ha” moments.

The one term that was both new and very relevant for me was the word “Discovery”. Probably because there are so many lawyers in the US, some legal lingo ends up being introduced into other areas, in this case, the multi-family office.

What we discovered (pun intended) was that “Discovery” was something that we had planned on doing at the outset with any new client or prospective client. We just didn’t know that that was what it was called! (Much like my own working for a Family Office for years before realizing that I worked for a “Family Office”).

So now we know that each time we meet a new client, the first order of business is to perform a “discovery”.  Others might call it a “check-up”, or a no-obligation-evaluation. It is the process by which the client provides his current paperwork (investment statements, legal documents, etc.) for review.

Discovery is an important step for a number of reasons. For us, if we are to be able to provide proper advice, ideas, and guidance, we need to know where things currently stand. It is only when we can see the whole picture that we can begin to ask the proper questions to make sure that we are recommending things that work with where the client wants to go.

For the client, the discovery is also important. It usually makes them stop and think about each of the accounts and files that he turns over. These were likely set up and organized at different times, for different reasons, based on different priorities and under different circumstances.

Having someone take all this “data”, and turn it into “information”, upon which decisions can be made, cannot help but give wealth owners a sense of relief. Once the discovery is complete, they can see where they are. Once that is well understood and agreed upon, the fun part of figuring out where you want to go can begin.

Steve Legler “gets” business families.
 
He understands the issues that families face, as well as how each family member sees things from their own viewpoint.
 
He specializes in helping business families navigate the difficult areas where the family and the business overlap, by listening to each person’s concerns and ideas.  He then helps the family work together to bridge gaps by building common goals, based on their shared values and vision.
 
His background in family business, his experience running his own family office, along with his education and training in coaching, facilitation, and mediation, make him uniquely suited to the role of advising business families and families of wealth.
 
He is the author of Shift your Family Business (2014), he received his MBA from the Richard  Ivey School of Business (UWO, 1991), is a CFA Charterholder (CFA Institute, 2002), a Family Enterprise Advisor (IFEA 2014), and has received the ACFBA and CFWA accreditations (Family Firm Institute 2014-2015).
 
He prides himself on his ability to help families create the harmony they need to support the legacy they want. To learn how, start by signing up for his monthly newsletter and weekly blogs here.
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Peace of Mind Has Many Forms

This week I had the “pleasure” of undergoing my first colonoscopy. Thankfully, it was really no big deal, and even more importantly, nothing was found and I don’t have to have the procedure again for five years. The biggest benefit is the peace of mind that I now have, assured that there is nothing to worry about.

This is just one small example of taking care of your affairs so that you minimize the number of things that you need to be concerned about.

Whenever I get a renewal notice for an insurance premium, I usually feel a sense of relief when I make the payment, knowing that I am good for another year of not having to think about it, and knowing that I am covered in case something bad happens.

As a parent, you never really stop worrying about your children, but as they get older and learn to be more self-reliant, there is great satisfaction in seeing them overcome what used to be obstacles.

Just knowing that they now know how to swim, ride a bike safely, can go to the bathroom by themselves in a public place or walk to the corner store and get something for you, are all stages that they go through, and each provides their parents with a little bit more peace of mind in knowing that they can be trusted with their independence.

On the other end of the life spectrum, elderly parents often need to be cared for, and surely finding a place with caring staff, good facilities and enjoyable activities serves to provide peace of mind when that time comes.

In between the times in our lives when we have other people worrying about things for us, there is the part where we are responsible for looking after ourselves. What can we do to make sure that we maximize our peace of mind during those years?

I have already touched on a few of the areas. The colonoscopy is a small part of the making sure that you are being properly followed by medical professionals who will hopefully be able to spot anything early enough to be treated. Insurance is something that falls into another category; if you don’t have a go-to person for your insurance needs, you probably should have one.

Of course I would be remiss if I did not talk about the importance of making a will, and keeping it up-to-date. The whole subject of how much you tell your family about what is in the will is too big a subject to be properly treated here, and it will be the subject of a future blog post.

For now though, you should know that I am usually in favour of more communication and not less, so as to minimize the potential for misunderstandings.

Making sure that more people fully understand your wishes can go a very long way to making sure that things will be taken care of the way you want them to be.

Making your family aware of your wishes is the first important step. The second is making sure that at least one or two other, non-family people are aware is the second step. Having a notary and/or a trusted advisor on board can provide you with more peace of mind than anything else.

The problem is that these are not subjects that most people enjoy talking about. But if you think about the added peace of mind that you will feel once you have taken care of everything, maybe that will help you get moving.

Steve Legler “gets” business families.
 
He understands the issues that families face, as well as how each family member sees things from their own viewpoint.
 
He specializes in helping business families navigate the difficult areas where the family and the business overlap, by listening to each person’s concerns and ideas.  He then helps the family work together to bridge gaps by building common goals, based on their shared values and vision.
 
His background in family business, his experience running his own family office, along with his education and training in coaching, facilitation, and mediation, make him uniquely suited to the role of advising business families and families of wealth.
 
He is the author of Shift your Family Business (2014), he received his MBA from the Richard  Ivey School of Business (UWO, 1991), is a CFA Charterholder (CFA Institute, 2002), a Family Enterprise Advisor (IFEA 2014), and has received the ACFBA and CFWA accreditations (Family Firm Institute 2014-2015).
 
He prides himself on his ability to help families create the harmony they need to support the legacy they want. To learn how, start by signing up for his monthly newsletter and weekly blogs here.
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What do you want to be when you grow up?

Recently I noticed a billboard on the highway near my house that got me thinking about how people decide what they want to be when they grow up. It featured a toddler who was playing nurse with her injured teddy bear, and was seemingly aimed at encouraging youngsters to consider the nursing profession.

The tag line of the ad mentioned something about “you’ve always known that you were good at caring for others”, and so now you should follow your instincts and make this your career.

I know that some people are lucky enough to know very early on in life what career they wish to pursue, and then go about methodically taking all the steps required to get there. Good for them, but I suspect that they are a small minority.  I have trouble thinking of even a handful of people that I know who fit into that category.

As parents we try to help our children make the right choices and get involved in different activities to try to spark an interest in various career or vocational pursuits. You never really know what you are good at until you try, right?

Everyone is always told to “find what you are good at” and “do what you love and the money will follow”.  Some will take a long time to figure it out for themselves, and others will wander aimlessly from job to job.

Those who grow up in a family business often have some expectations put upon them at a young age. It could be a family restaurant or store where pre-teens are expected to help out after school and on weekends, and more power to those families who can manage to strike the right balance and keep everyone happy.

As the only son of an entrepreneur in the steel fabrication industry, it was drilled into me from a very young age that I was to follow my father’s footsteps and eventually take over the family business.  Do I regret doing it? No, not at all.  Looking back, would I have preferred to have some kind of choice? Um, yes, please.
On the popular TV show 30 Rock, there was an episode where someone mentions immigrants to Jack, to which he replies, ”Oh, I love immigrants. They come here, work hard, send their kids to school to become doctors and lawyers. And then their kids go windsurfing and take improv classes.”

We recently watched the only season of the TV show Freaks and Geeks (highly recommended if you have teens or pre-teens). The high schoolers are sitting around talking about career aspirations, and Ken says, “I’m going to inherit my father’s business, sell it, and move to Hawaii and go surfing”.

So where am I going with all this? Simply put, families with substantial wealth, usually from a family business or with professional parents, have different issues to consider when raising their children.

From assuming we know what they should become, to keeping them motivated; from finding something meaningful to pursue to treating each child fairly; from letting them in on the family’s wealth to making sure they hang around the right crowd, from cultivating the right attitude to those less fortunate to treating them as participants in the family and its plans, there are many subject to consider.

And I did not even mention learning how to handle money, credit, budgets, etc.

How long it takes to figure out what you want to be, or how old you are when you figure it out, are really not that important in the end.

If you can help your children find something meaningful, that makes them happy and hopefully makes the world a better place in some small way, I think that you can consider that a job well done. On that score, I know that my parents did a fine job.

Steve Legler “gets” business families.
 
He understands the issues that families face, as well as how each family member sees things from their own viewpoint.
 
He specializes in helping business families navigate the difficult areas where the family and the business overlap, by listening to each person’s concerns and ideas.  He then helps the family work together to bridge gaps by building common goals, based on their shared values and vision.
 
His background in family business, his experience running his own family office, along with his education and training in coaching, facilitation, and mediation, make him uniquely suited to the role of advising business families and families of wealth.
 
He is the author of Shift your Family Business (2014), he received his MBA from the Richard  Ivey School of Business (UWO, 1991), is a CFA Charterholder (CFA Institute, 2002), a Family Enterprise Advisor (IFEA 2014), and has received the ACFBA and CFWA accreditations (Family Firm Institute 2014-2015).
 
He prides himself on his ability to help families create the harmony they need to support the legacy they want. To learn how, start by signing up for his monthly newsletter and weekly blogs here.
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