Editor's Note: The following article is an abridged excerpt from Budge's book, "The New Financial Advisor: Strategies for Successful Family Wealth Management," published by John Wiley & Sons Inc.
Family meetings are both overhyped and underdeveloped as a tool for financial advisors. But even as professional facilitators step up to do this work at the high end of the market, advisors can reap tremendous advantages by running family meetings themselves.
Family meetings, conventionally understood, bring the voices in a client's life into a room so advisors and clients can hear them speak for themselves. Gathering the perspectives of all players in a family is the only way to fully understand the dynamics behind a client's decisions. You can see and hear the playback in living color and surround sound and better understand, for example, why your client may have been inscrutably reluctant or resistant on certain issues.
Meetings orchestrated by financial advisors are in many ways deliberate interruptions in the typical flow of family communication. Because the meetings deal with money, which is deeply private and interwoven with other family dynamics, these interruptions are also interventions in the most basic sense: Your work will change the normal flow of family discourse. It can do this in a way that is trivial, ineffectual and undermining or meaningful and progressive.
What type of meeting should be contemplated in different situations? Experts categorize meetings by organizing them along the lines of their purpose-either content-intensive or process-intensive.
Content-focused meetings refer to discussions of technical matters and financial details. These types of meetings would be held, for example, to convey a complex investment concept, to provide an analysis of the family's balance sheet or to evaluate the tax implications of selling a family company.
Process-focused meetings concentrate less on what is being discussed (in most cases, financial content) and more on how decisions are made. Process-centric meetings focus on family interrelationships. How democratic is a family's decision-making? How will we weigh privacy versus openness? How unilateral or multilateral will we treat family financial matters? In the content-focused meeting, we're saying, "Here are some fish." In the process-focused meeting, it's, "Shall we go fishing, how have we fished in the past, and can we help you learn to fish better as time goes on?"
In other words, whether a 60/40 equities-to-fixed income portfolio is better in the client's case than a 50/50 portfolio is of less interest in a process-focused meeting than how the family unit is making the decision and what the decision reveals about their different beliefs in regard to what these portfolios mean.
These two meeting types are not meant to reflect pure states or differences of purpose. That is, there is no meeting that does not have content and process. They are inseparable. You can no more run a pure process meeting than speak a sentence without using words. The reason for this distinction is to identify what kind of meeting is being staged and what the advisor, as facilitator, is going to concentrate on. The core focus of the meeting will drive those things that will be tabled or placed in the "parking lot" for later attention.
Once you have decided the purpose of
the meeting and what kind of meeting you are trying to execute, these
steps will help you anticipate and optimize your meetings:
Strive for inclusiveness and constructive member participation. Pay attention to the form of participation of family members as well as how the group is managing speaking and silence. One does not have to speak to participate actively, but excessive silence is generally something to move against in these meetings.
Track who is saying what to whom. Family meetings, like other human encounters, are like a staging of non-fiction drama where part of what you are listening for are roles and voices. Sometimes, asking speakers to identify who they are and who they are talking to can be extremely clarifying. For example, if a father barks at his daughter in a meeting on family business matters, you can ask if he is addressing her as her boss or as her father, and check with the daughter to see if she is hearing him as her boss or her father.
Stay neutral to the players and issues. In most cases, you will want to avoid taking sides. An exception to this is when you are asked to be the "expert witness" and withholding your point of view would be inappropriate or obstructionist.
Lead by example. Maintain an open and non-partisan approach to interpersonal exchanges. Show the family how superheated issues can be explored in a dispassionate but caring manner. Let them see honesty and integrity in action. When conflicts emerge, don't rush in to snuff out the polarization. Instead, convey trust that the family has the ability to solve problems, even if not all at once.
Build small agreements. Successful expert facilitation is not always marked by dramatic and life-changing "ah-ha!" moments, but rather by bite-sized resolutions that can be used as building blocks for a better functioning family. Listen for the one source of agreement amid the dialogue. Make explicit observations about those areas where there is agreement, and ask if there are others that can be found and built upon.
Bring patience to the room. Make sure that any overly ambitious agenda that you have developed is checked at the door. Meeting a family where they are and moving them forward at their pace is a hallmark of successful facilitation. All the preparation you've done is like leading a horse to water. The choice to drink is theirs.
Promote the kind of discussion that is needed. Depending on what you are trying to accomplish, you can structure different types of discussions that open, narrow or provide closure in conversations. If you want to open the discursive field, try using brainstorming, free association, lists and surveys. If you want to narrow the discussion, use strategies such as polling, prioritizing and eliminating duplicate options and voting. If you
wish to close the conversation, use negative polling (where options are eliminated to get to those that should be kept); develop and apply decision criteria; or generate next steps.
'What's going on?' Assemble and reframe the fact pattern. One of the most interesting things a facilitator can ask when there is a lot of activity in the meeting is, "What's going on?" This question will usually stop a group in its tracks and provoke genuine reflection and discovery-one that uncovers one or two core processes going on that are masked by a frenzy of seemingly disconnected conversations and activity.
There are a handful of situations that no advisor, no matter how experienced, would want to see in a family meeting. These situations go beyond agenda deviations, presentation technology failures, passive resistance or minor ground-rule violations:
Escalating conflict. Even if you have prepared participants well, and they understand what the central issues are, families will often unconsciously use the safety of your presence to intensify their reactions-sometimes to a surprising level.
Rule Of Thumb: Identify the emerging conflict and use the group to clarify what it is about. Once the outlines of the conflict are clear, shift away from the disagreement and toward the development of a resolution that promotes a reframing of the issue. Those conflicts that are not central to the purpose of the meeting should be relegated to the "parking lot" and flagged for further work.
Crying. Few things unnerve a novice facilitator more in a meeting than someone breaking down in tears. This is hardly rare, however, since families will inevitably explore potentially painful issues.
Rule Of Thumb: There are many reasons why someone may cry. Family members can also interpret crying in a range of ways. Don't under- or over-react. Try to ascertain the reason for the tears and whether or not they are provoking resistance or irritation in others. As people react, ask them what it is that they are reacting to, besides the obvious.