Some Advisors have found that bringing family members into the business-whether as the result of a plan or by accident-has its advantages.

Before starting Hammel Financial Advisory Group LLC in Nashville, Tenn., 20 years ago, Dick Hammel ran a small chain of auto parts stores with his brother. After he sold that company, he figured his family business days were over.

While he did harbor thoughts of working with his only child, Melissa, he saw little chance of it happening. She was, after all, a communications major in college and worked as a staff manager for Weight Watchers in Kentucky.

Even after a turn of events in 1996 that saw "Missie," as he calls her, quit her job and fill-in for his departed office manager, Dick Hammel still didn't see her stay as permanent. "It was the sort of thing where she wanted to help me out," he recalls. "She really didn't have an idea of making it a permanent thing."

That's what he thought, anyway. His daughter, however, had an inkling she might stay a while. And stay she did, in the process getting a CFP certification and becoming managing partner of the business. Melissa now handles much of the day-to-day operations, while Dick focuses on investing and meeting with clients.

Looking back, Melissa says, her communications major wasn't far removed from the financial advisory business after all. "Now that I'm in it, it's a natural fit because it's a people-oriented business," she says. "This was a natural, unplanned thing."

Both Hammels agree, as would many members of family run advisory businesses, that a family businesses doesn't have to be carefully planned from the start to be a success. They may be conceived through a whim, a sudden change of heart, a confluence of circumstances or even a lunchtime conversation.

If the family structure works, they also agree on the potential rewards. Many talk of a sense of trust that's impossible to attain in a typical workplace. Or of an increased sense of mission. Members of successful family businesses also seem to be unanimous in their belief that it strengthens bonds with clients, who typically are relieved to know the succession plans of their advisors are grounded in blood relationships.

"I'm 66, and when new clients come through the door, one of the first things they'll ask me is, 'Who's going to take your place?'" Dick says.

The Numbers Thing

Melissa Hammel was 30 years old by the time she took a job with her father. Why didn't she hook up with him sooner? Part of it was just happenstance. But there was also another problem: numbers.

"I was always intimidated by the financial planning field," she says. "I felt it was all about numbers, and I'm just intimidated by numbers."

It's a fear that might have scared her away from the profession, if not for the fact that her father made a conscious effort not to overwhelm her. For example, she took a couple of years to get her paraplanner certification, and she got her CFP certification in December. Her duties at first were limited to data entry, client correspondence, filing and other basic administrative tasks. Soon she was doing analytical work and sitting in on client meetings. "I got more confidence as I went along," she says. Somewhat to her surprise, she discovered she possessed "an affinity for cash flow and budgeting."

Once it was clear his daughter was interested in more than just a brief stay the firm, Dick says, he encouraged her to attend as many professional conferences as possible. Like her father, Melissa is an active member of the fee-only National Association of Personal Financial Advisors (NAPFA). Melissa says her role at the company started to grow significantly when she started her CFP certification studies in 1999. The following year she became a full partner at the firm, which has about 108 clients and $60 million under management.

Melissa and her father typically meet with clients together during the first few exploratory meetings and then split the clientele between them. They are starting to work on a full succession plan, with the help of their spouses. Once a quarter, Melissa says, she, her father, her husband and her mother have a meeting at which they discuss the business and its future. Melissa's husband, while not a planner, is a project manager for a local construction company.

"He and mom both have an objective viewpoint about the company," she says, citing a recent meeting in which her husband and mother both suggested Melissa and Dick cut down on their long work hours. "We were just trying to do too much and weren't delegating."

While the father-daughter team is focused on their business, they say they don't take things too far. At work, Melissa calls her father "dad" and Dick calls his daughter "Missie." Clients like it that way, Melissa says. "The type of clients who come to us like that type of family atmosphere," she says.

Unexpected Ventures

It started out as just lunch. Yet it turned out to be one of those life-changing moments that come out of nowhere.

As Marc Freedman remembers it, it was 1990 and he was a year out of college. He was working as a Chinese food container salesman and having lunch with his fiancée. The subject then turned to their future-more precisely, his career.

"She just asked me if I was sure I wanted to make a living out of selling Chinese food takeout containers," he says. While he was trying to figure out the answer, she followed up with another question: "Have you ever talked to your father about going to work for him?"

That father would be Barry Freedman, who in 1968 started Freedman Financial Associates, a successful financial planning and investment advisory firm in Peabody, Mass. Over the years, the elder Freedman has emerged as one of the profession's true thinkers. Both present and past associations have turned to him to develop conference agendas.

Marc Freedman knew that entering his father's business wouldn't be just a matter of picking up the phone and reserving a parking space. First of all, Marc had never planned on working there. While he did attend Babson College, a business school in Wellesley, Mass., his major was marketing. His big dream was to be the head of national marketing for Pepsi Cola or Frito Lay.

As for his father's business, he says, "I didn't really know what my father did. I knew it had something to do with money, but that's about it."

So, it was probably a surprise to both Marc and Barry when the younger Freedman, a talented musician who once played at the Super Bowl, picked up the phone and asked for a job at his dad's business. "He was floored," Marc recalls.

The elder Freedman says he was indeed surprised by the call, but that didn't dissuade him from thinking that his son was cut out for the job. Barry Freedman, in fact, always thought Marc was suited for the profession.

"I knew he would do well because I knew he had the personality for it," he says. "He's a social and outgoing guy, and this business is more about relationships than it is knowledge. Knowledge and research are commodities."

Barry did accept Marc into the practice, but with some ground rules. The first was that he would immediately start studying for his Series 7 exam, which he eventually took and passed in June 1991. Also part of the plan was that he would start out at the firm by watching and listening.

"I told him the first thing you need to do is sit down and do nothing for a while," he says. "Just sit there for a few months, listen in on client calls and meetings and not say a damned thing."

That's the way it went until one day later that year, when Barry turned to his son as they were getting ready for a client meeting and said, "Why don't you take this one."

Marc recalls that he talked so much in that first meeting, that it lasted two-and-a-half hours. As time went on, he brushed up on his listening skills, as well as other aspects of the business. He received his CFP certification in 1994 and became a partner in 1997. They will become equal partners next year.

To the delight of clients, the Freedmans say, they have mapped out a succession plan that has already started. Barry spends about five months of the year in Florida, where he maintains an office, while Marc takes care of business in Peabody.

Clients, they say, are equally comfortable with either Freedman. Even employees say they can't decipher which one is speaking when they listen in on client meetings. "When I walk by his office and hear him on the phone, he sounds like me. It's scary," Barry Freedman says of his son.

Living The Business

Dee Balliett says that that after helping run a family business for more than 30 years, the lines between work and family sometimes seem blurry. "Our life has become our business, our business our life," she says.

That has both its good sides and bad sides, she adds. For instance, the family business-Balliett Financial Services & Trust Co. in Winter Park, Fla.-has allowed her to stay in close touch with her two children, who are employees at the firm.

She and her husband, Gene, have been able to maintain a modest balance between family life and work, she says. One household rule is that there's a moratorium on business-related conversation anytime before 6 a.m. and after 7 p.m.

Yet there are some aspects of family businesses that make life harder, she says. One example: blowing off steam. "It's hard to go home and complain about my boss," Dee says. "And he can't complain about his boss. We don't have a sounding board."

Whatever it takes to adjust to family business life, the Ballietts have had a lot of practice. Gene and Dee, who are 71 and 70 years old respectively, started their business in the late 1960s as a medical management consulting firm in Teaneck, N.J. Gene consulted with doctors on how to run the business side of their practices, while Dee worked as a secretary.

As time went on, the financial planning aspect of the firm evolved, resulting in the firm's transition into a family financial planning practice after about 10 years. In 1986, they moved the business to Florida.

Along the way, Dee has filled multiple roles. After starting as secretary, she became research director and then road manager, coordinating her husband's speaking tours. She eventually took over the firm's financial planning operations, while Gene dealt with asset management.

Their son, Phil, joined the company more than 20 years ago. He describes himself as the company's "techno geek," specializing in managing the office's computer network. Dee says he also was instrumental in developing accounting software for the practice.

The Ballietts' daughter, meanwhile, started with the firm 18 years ago and works as a writer, proofreader and graphic artist. Among her duties are writing columns for the biweekly newsletter the firm sends to clients.

Both of them got an early taste of the business, Dee says. "When they were real little, they sharpened pencils and emptied waste baskets and got paid for it," she says.

Dee and Gene have no plans to retire. But the succession plan for the business is still unresolved, partly because neither of their children is involved in the financial planning or asset management ends of the business. Selling to employees or selling the business outright are among the options they're considering.

"We've been throwing this around for six years," she says. "This is probably the hardest issue we've had to face."

Fewer Sick Days

Being part of a family run business does have its drawbacks, says V. Peter Traphagen Jr. of Traphagen Investment Advisors in Oradell, N.J. "Your family knows your home phone number by heart and you can only call in sick when you're really sick," he says with a laugh.

Those, however, are about the only down sides to a family business that Traphagen can think of. Working in a firm that includes his father and uncle as partners, Peter Jr. feels the close ties of family translate well in a business environment.

He notes that in the business place, those ties extend beyond just blood relatives. Two nonrelatives are also partners in the firm, including one, Sue Lanza, who has been working with Peter's father for more than 20 years.

There's a higher level of trust among partners, he says, as well as a higher level of responsibility. "There's a little more pressure," he says. "It's a challenge. I think we all expect more from each other."

Clients also like the fact that two generations of Traphagens are looking after their money, he adds. The firm has about $60 million under management. "Many clients have expressed that they feel very secure working with our family owned business because there is a structure and succession plan in place to continue well into their future," he says. "They feel protected."

The roots of the firm were planted in 1970, when V. Peter Traphagen Sr. started his own accounting firm in Ridgefield Park, N.J. His younger brother Robert joined seven years later, forming the firm, Traphagen & Traphagen CPAs, which still exists today.

Oddly enough, it could have been an engineering firm. Peter Sr. says his father wanted him to study engineering in college, despite the fact that his father was also an accountant. "It was the early 1960s, and he felt that engineering was really the future," Peter Sr. says. His father, he adds, also was unhappy in his job as an accountant at a private company.

Although he aspired to be an accountant, Peter Sr. did follow his father's wishes, and did study engineering-but only for a year. The studies left him feeling isolated and confined, so he switched to accounting. "I preferred working with people," he says.

By abandoning his engineering major, Peter Sr. lost the financial backing of his family, so he worked at a small CPA firm during the day and attended accounting classes at night to get his degree. It was an experience that led Peter Sr. to exert as little pressure as possible on Peter Jr. when it came to his choice of a career. As it turns out, it didn't matter. Peter Jr. says he was intent on joining the family firm the moment he entered college. He graduated on a Sunday, and started working at the firm the next day.

"I was elated," Peter Sr. says. "The comfort I get is the knowledge that I can rely on my partners, including my family, when push comes to shove."

Tough Love

Don Nicholson Sr. was elated when, unexpectedly, his son approached him about joining his financial advisory business.

But then he thought about it and decided that some "tough love" was in order. So he took his son, Don Jr., out for a 45-minute walk to talk about it. "I finally told him, 'Let me think about it and talk to you later,'" he says.

If he went with his heart, Don Sr. probably would have been doing back flips when Don Jr. approached him that day nine years ago. Don Jr. was a finance major in college at the time, but had never expressed his thoughts about joining his father at Donald W. Nicholson & Associates in Wilmington, Del., which he started 35 years ago.

Don Sr., meanwhile, had dreamed of such a partnership, but he took a hands-off approach when it came to his son's career path. Yet, when his son sought a place in his business, Don Sr. made an effort not to lay out too rosy a path for him. "I always taught my children to be able to think for themselves," he says. "I wanted him not to look at me as a parent, but to look at me as a boss."

Don Sr. of course did get back to his son. When he did, he had a long talk with him about the business, the industry in general and the fact that his son still had a lot to learn after he graduated. What he suggested was that his son get a taste of the industry by first working for a large firm. Don Jr. followed the advice, and spent the next year working at Principal Financial Group in Media, Pa., before finally joining his father's firm seven years ago. "Every night when he came home from work, for a whole year, we'd go over everything he learned that day," Don Sr. says.

Talking about things came easy to the father and son because they were also close friends. Don Sr. coached his son's baseball team for 14 years. Don Jr. often turned to his father for advice. "In any industry, it's hard to find someone you can have 100 percent trust in," Don Jr. says.