Joshua Rubenstein, a partner at Rosenman & Colin, in Newark, N.J., once told me this: "When estate planning goes wrong, it's never about the money. It's about the hurt feelings."
Rubenstein, who worked on estates for the Russian ballet dancer Rudolf Nureyev as well as various Greek shipping magnates, was one of my favorite sources when I wrote columns for The New York Times some years ago. This column has something to do with favorites. Thinking about them is no doubt what led me to Charlie Haines, who has emerged from the ashes like a Phoenix and transformed both himself and his company. I'll get back to that.
Like most reporters, I have favorite sources in many specialty areas. Yesterday, I got an e-mail advising me of a retirement reception for Ethan E. Kra, chief actuary for Mercer and an all-time favorite. What makes them favorites? It is not because they buy me drinks.
It's because they are never wrong! Kra and Rubenstein work in very arcane areas of taxes and pensions and estate planning. If I was working on a column-or a tip-in one of those areas, I could trust these two. They never gave me a wrong answer! That's important for a newspaper reporter on deadline. Glenn Daily, a fee-only insurance consultant in New York, is another one.
How am I going to bring this around to Charlie Haines? Here it is: I have favorite financial planners as well, and for the same reasons. When I began covering financial planning in 1986, there were just a handful of planners who set the standard for the profession, people like Eleanor Blayney and Deena Katz and Ross Levin. Of course, now there are many, many more. But I've made an effort to keep up with that first group to find out how their practices have developed over the past 25 years. When I lose touch with one of them, I grow concerned.
So it was most recently with Charles D. Haines. Like the rest of the group, Haines, a planner in Birmingham, Ala., is a visionary, always keeping at least one step ahead of the game. Evan Simonoff, the editorial director of Private Wealth magazine, profiled him nine years ago in Financial Advisor magazine, arguing that Haines "may just be building the multi-client family office of the future." Simonoff added that Charles D. Haines & Co. included a philanthropy center, a corporate governance expert, an alternative investments operation and a clinical social worker/psychologist, along with the expected financial planning and asset management businesses.
But not long after that story, Haines seemed to drop out of sight. When I caught up with him in late summer, he acknowledged that he has been MIA. "We've almost been in hiding for eight years," Haines said. "I was so preoccupied." With both good and bad events, it turns out.
Haines had some family and personal issues to resolve. He thought he'd nearly finished by this summer and was ready to charge ahead with his new firm when Davis, one of his 21-year-old twins, got run over by a truck while biking in Chicago. The truck driver didn't see him, made a right turn, and literally ran over him. "He had tire marks right down his body," Haines said. "They told me he had a 1% chance of living."
Thanks to the work of a brilliant surgeon, Davis Haines pulled through. But the surgeon refused to take credit for it. "I couldn't do this on my own," she said. "Somebody was helping us."
Once his son was off the critical list, Haines shifted into high gear on his business. The near-death and rebirth of his son represents something of a metaphor for what he's done himself. To me, he seems a different person. He paints. He's sold a painting. He acts in musical theater.
He's searched for his soul and found it! I remember talking with Haines some years ago, about the time Simonoff was writing the portrait of his company. Haines, who notably identified the difference between portfolio managers and financial planners-the first is technical, a numbers person; the second a counselor-aligned himself with the left-brained numbers guys, noting that on the Myers-Briggs personality test he was clearly a "thinker." Haines' industrial psychologist, Marty Carter, was using the Myers-Briggs to test employees to find out how they might best fit in the company. But when I talked with him the other week, he told me that even a left-brained person could be taught to do the counseling work that he does in his new company.
"Do you think you're left-brained?" I asked him.
"No," he said. "I think I'm more right-brained." Turns out that the Myers-Briggs test shows the same thing. Now he is a "feeler" rather than a "thinker." So he has changed himself! Part of the change is no doubt due to his wife, whom Haines married in December 2009. Guess what? She's an artist. On the first page of the brochure for his new company, it says: "Being a dreamer isn't always celebrated in our society." That's not the Charlie Haines I once knew.
But you want to hear about Haines' new business. "My new business is a reflection of my new life," he says. Haines introduced the name of Kinsight LLC just last summer (2011) His new business is pretty much what Simonoff predicted nine years ago but with even more frills: a multifamily office with real emphasis on creating a family legacy and a means of communication between different generations. Surely, other financial planners and multifamily offices have been moving in this direction for some time. One of the most visible is GenSpring Family Offices, which is spreading from Florida up the East Coast and now across the country.
Like other broad-based family wealth consultants, Kinsight focuses on wealthy families that want more help than just money advice. "We're not looking for people who value money," Haines said. "We're looking for people who worry that money will hurt their family."
For example, Haines recently met with a man who will be inheriting more than $20 million over the next few years. "He's worried that the money will hurt the children," Haines said. Kinsight has developed its entire program to work with families like this.
When Haines was searching for ways to best serve families, he considered developing his own program. If he could not design a program that was the best in the business, Haines decided he would work with someone else. And so it is that he is working with the Heritage Institute in Portland, Ore., which works with families on multigeneration planning. Haines has gone through the training program to become a certified wealth consultant.
The Heritage process begins with a "guided discovery" of the family's history and stories and values to create a genogram, or pictorial history of the family, including medical history. This might involve a family gathering where one of the members of the Kinsight team interviews the male and female head of the family. Children down to age 10 are included in these family discussions. Family members tell their life story and money stories and talk about what they've learned from them. Haines will proceed in whatever manner the family desires.
Many families want to create some tangible object that represents the family legacy. For example, the interviews with the family matriarch and patriarch might be filmed and edited. Several filmmakers, such as Iris E. Wagner, the founder of Memoirs Productions in Montreal, do this type of work, turning the family history and legacy into a dramatic story. A musical family might plan to trace the family's history in music.
One woman who quilts put the family stories on different squares and sewed them all into a family quilt. From this meeting, the family puts together a heritage statement, listing the family values and history that are important and that the family wants to preserve. It should say: "This is who I am. This is where I came from. This is what I believe. This is what I hope for my family, now and in the future." All the answers are put in the words of the family patriarch and matriarch so that future generations will hear "your story directly from you and not through word of mouth," according to the Heritage Institute.
Next, the family plans a "heritage day," which might include any of these topics as well as investments, philanthropy, human capital development, or anything else the family wants to focus on. The second heritage day is planned by the second generation. They choose whatever topic interests them or whatever they believe might give the family a good learning experience. "The parents step back and let the children have a pre-inheritance experience and begin building a foundation of how to work together as a family." After that, the family continues to plan annual heritage days.
Kinsight has 16 employees. Although recruitment is a problem area that Haines has mentioned in the past, he hasn't had much trouble recruiting for this company. Haines splits clients into two groups: $1 million to $10 million, and above $10 million. The most recent hire, who will be a portfolio manager for the clients in the $1 million to $10 million range portfolio, has an MBA, a master's degree in accounting and a master's degree in tax. When I went back and read past articles about Haines as I was preparing to interview him, I was amused to see that in one of the books I wrote for financial advisors, the chapter about his business model was titled: "Charlie Haines: The Care of Kith and Kin."
Haines believes individuals have unlimited potential, which he refers to as "wing span." He hopes the Heritage Process will result in better lives for his clients. And by weaving together multiple generations of the family and assigning young people in the firm to work with younger family members, he hopes to avoid losing the younger generation, a problem for most wealth management firms.
To prove his point about increasing "wing span," Haines says: "I'm evidence that even at age 55 you still don't know what's in you until you take the risks."
Mary Rowland can be reached at email@example.com. She has been a business and personal finance journalist for 30 years and has written two books for financial advisors:
Best Practices and
In Search of the Perfect Model.