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.

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.

I consider myself a bit of a political junkie, so the current election in Quebec is a lot of fun for me to watch.  The TV debates take on huge importance since many casual observers choose whom to vote for based solely on this very limited exposure to what the candidates have to say. The debates are a key opportunity for voters to get to feel like they “know” the person for whom they will eventually cast their ballot.

Of course watching someone on TV for an hour or so is not really the best way to get to know someone, but in this case, it is often sufficient, insofar as it often confirms feelings that we already have based on other information that we have read or discussed with family and friends.

On a more personal note, we do have some relationships in our lives where getting to know the people that we deal with is much more important, especially when it comes to dealing with issues involving our loved ones and our finances, and the long term aspects of these key areas of our lives.

As parents it is normal to want to meet our children’s friends, teachers, coaches, etc. When it comes to our money, we like to think that we know the people who are managing things for us, but in many cases the bond is actually quite superficial.

Sure, when you open an account for any kind of investment, you spend a lot of time filling out forms with all sorts of information about yourself, including your net worth, your risk tolerances, and other tidbits that put you in some sort of risk profile. These forms have all become mandatory over the past decades because some investors were badly treated by “professionals” somewhere along the line.

So governments imposed KYC rules, (“Know Your Client”) which are supposed to stop brokers from loading up a widow’s account with speculative positions that could end up sending her to the local food banks and thrift shops once these investments go sour.

The relationships we have with those who manage the things that are most important to us work both ways, of course. We like to think that the people who are working for us are trustworthy and that we know them well. But they should also know as much as possible about us if they are to do a proper job for us. Depending on circumstances though, this is not always easy or possible.

When entrusting someone with important tasks and assets, it is always nice to feel like you understand the character of the people that you are dealing with. When you deal with someone who was recommended to you by someone you trust, that can be helpful, compared to just finding someone from the phone book.

So all this brings me to these blog posts that I have been writing here for the past few months. I try to write them using simple terms and language, so that even my preteen kids can understand them. And for the most part they do. I know, because I ask them to read them and then tell me if my thoughts are clearly expressed and if they understand what I have written.

They often ask me “who reads these blogs?” My honest answer is, “I don’t know”.
I then add that I am much less concerned with wide distribution of my messages than the ability to provide a deep understanding of what kind of person I am.

Tom and I are offering our services to what is admittedly a narrow segment of society: families with significant assets who are dealing with how they want those assets to serve the members of their families for the long term. Nobody is going to hire us before they have a very good feeling about who we are, how we think, what is important to us, how we work, and how we communicate.

As I have told my kids and anyone else about this blog, I want anyone to be able to come to our website and spend 20 minutes or 3 hours and just read these blog posts that we are writing.  I like to think that after anyone spends a bit of time reading these, they will have a pretty good idea who they are dealing with.

We trust that most people will get the impression that we are “two real square guys”, as my father would have put it. Yes, kids, that was meant to be a compliment in the “old days”.  Back to politics for a second, your grandfather also suggested to people NOT to go into politics, because then “even your friends with think you are an A**hole”.

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.

The London Olympics came to an end a few days ago, and watching the results over the two weeks, I found it fascinating to note the differences in the happiness of some of the medal winners compared to others.

It might seem normal that a gold medal winner would be happier than the winner of the silver, who in turn would be happier than the recipient of the bronze.

But there are of course many more things at play. For example, someone who had been expected to bring home gold would be disappointed with anything else, and someone who was not even on anyone’s radar for medal contention would likely be thrilled with a bronze.

Then there are differences in what country you represent. The USA team and many of their fans seem to believe that if you do not win the gold, then you are simply an also-ran. In contrast, Canadians almost always take great pride in taking home the Bronze.

So, is there anything wrong with this picture? We can all look at these differences and draw our own conclusions. Personally, I have no problem with any of them, as they are debatable, explainable, and rational in their own ways. What they all come down to in the end, of course, is the level of EXPECTATION.

Of all the things that go into one’s happiness, I believe that one’s expectation level plays a huge role, larger than most people would even think to believe. I want to break this down into three areas: 1) self-expectations, 2) family/friends/colleagues, and 3) outside of our control.

We have the most control over our own personal expectations, but some people take this to the extreme and are too hard on themselves when they fail to live up to some of their hopes and dreams. I can still picture some of the Olympians crying on the podium because they were not on the top step. Again, that is neither good or bad, just an observation. Perhaps they would not have even made the team if they did not have such focus and belief in their ability to shoot for the top step.

Obviously the other extreme of not having high enough expectations for yourself can have consequences that lead to disappointment as well. If you never push yourself to achieve anything, or think that you are not good enough to accomplish anything worthwhile, then you are not likely to achieve of accomplish much at all.

As for those people around us, anyone who has children knows how important it is to instill in them some kind of desire to find areas in their lives where they can focus on achieving great things, and encouraging them to do their best. We set up an expectation level in them, which goes a long way into how they grow up and where they should focus their priorities. How we help them deal with failures along the way also shapes them in fundamental ways. Helping them revise their expectations based on their abilities as they grow up becomes one of the most important tasks of any parent.

Outside of our immediate family there are other family members, friends, and coworkers that we deal with on a regular basis. Without getting into too much detail, let me just say that having realistic expectations with respect to what they can and will do for us is important if we do not want to continually be disappointed. There is a limit to how much control you can exert on most others.

When it comes to employees or professionals, however, I believe that it is important to raise the expectations bar. If you are paying people, you need to hold them accountable for what you are getting in return for the money you shell out. Often easier said than done, since there are usually negatives that arise from making changes in these areas, but constantly paying people who never seem to stop disappointing you will surely wear you down in the long run.

Lastly, there are the things over which we have no control, or at least very little. The weather, the economy, the stock market, and politics all come to mind.  I don’t think there is any better way to end this blog than with the serenity prayer, which summarizes many of my feelings:

God, grant me the serenity to accept the things I cannot change,
Courage to change the things I can,
And the wisdom to know the difference.

Amen to that!

Bosco is eight years old, and he has been living with us for over six years now. He is the friendliest dog you could ever meet. Unfortunately, he suffers from severe canine halitosis. But it is not as bad as it sounds, because as some of you have likely figured out, canine halitosis is just a fancy term for doggy bad breath. Sorry if I had you going there for a second, but I wanted to make a point here.

When you deal with professionals, the terms that they use on daily basis amongst their peers often creep into their discussions with “regular people” who are less familiar with their jargon. So you may find yourself subject to advisors who speak to you in a way that is difficult to follow.

Many people who are guilty of this kind of poor communication do not even realize that they are not getting through to their listeners. Some actually do it on purpose (even if only subconsciously) in order to make themselves seem superior. If you are the type who thinks “if the dog has bad breath, just tell me he has bad breath, don’t make it sound like some deadly disease”, then I hear you loud and clear.

Unfortunately many people will not recognize themselves as having this fault. After we sold the operations of our family business, it took me a few years to figure out what I would do career-wise. After a stint as an intellectual property licensing consultant I began to take on more of a portfolio manager role in the family office, which lead me to sign up for the CFA program.

Some friends looked at me like I was crazy. Why should I put myself through the trouble of studying all those hours in order to get another certificate on my wall and three more letters after my name? I worked for my family business, who was I trying to impress? The truth is, I did it for defensive purposes first and foremost. I knew that as someone who managed wealth, I would have people approaching me regularly, trying to convince me to invest in their products or services.

Many of those people would have those three letters, CFA, after their names. Those people must be smart, because many people enroll in the CFA program but a large percentage never get through it. So if they tell me that what they are selling is good for me, who am I to argue? Well, when they see the same three letters after my name, hopefully they understand that I understand.

You may think that this shows some insecurity on my part, and you may be right. But I am glad that I did it, and truthfully it was one of the most challenging things that I have taken on. The fact that I signed up for the program a week after our first child was born made it that much more of a challenge.

At the time I did not foresee the current career turn that I am making. Offering services to other families would not have even been a consideration if I did not have those credentials. Having an understanding of the financial products out there allows me to be kind of a translator, helping to explain seemingly complicated ideas to those who are not used to the concepts.

It is also a lot easier to ask questions for someone else. “I am pretty sure that I get it, but could you please explain to Mrs. Jones why she should add this product to her current holdings at this time?” is better than just nodding your head even though you are not sure you understood. When you get right down to it, if you cannot explain it to someone else in simple terms, you probably don’t understand it well enough yourself. And if that is the case, you probably shouldn’t be investing in it.