The game goes something like this: Children are given a certain amount of money each month to spend on the items they would buy to furnish a bedroom. Those who choose a bed first are rewarded. Those who opt for a television are given a talking to.

In another game, the children follow a dollar as it moves through the economy-from the bank to the consumer to the pizzeria, where it is spent on cheese and so on. One girl had her dollar move from America to Africa-where her family had gone on vacation-and then back again, undergoing currency exchanges in between. What she was doing would have been savvy if she were a teenager. But she was actually 5.

"They surprise you with what they know," says Kate Brown Donnelly, who oversaw this game as a client analyst at Laird Norton Tyee, the largest privately held wealth management firm in the Pacific Northwest. The exercises were part of the firm's effort to educate the children of its wealthy clients.

The game serves two purposes: The clients feel their heirs are getting a better understanding about money. And the firm develops a relationship with its clients' children. It's like the board game Othello. The trick is to gain control of the spots along the edge of the board. If one controls the nearest and farthest positions, one controls everything else in between. In wealth management, too, firms that successfully court the oldest and youngest members of a family have a good chance of retaining the assets between them.

The Seattle-based firm knows a little something about family wealth. The Lairds and the Nortons were sawmill owners from Winona, Minn., who made a fortune in 1900 by helping Frederick Weyerhaeuser acquire 900,000 acres of timberland. That partnership created Weyerhaeuser, the world's largest lumber company. The two families managed their fortune themselves until 1967, when they launched a family office and trust company to oversee their assets. In 1979, the company began managing the assets of families outside the Laird Norton empire.

The firm became Laird Norton Tyee in 2004 when this office merged with Tyee Asset Strategies LLC, a rapidly growing advisory firm serving first-generation millionaires from Puget Sound-area companies such as Microsoft Corp., Inc. and RealNetworks Inc. In partnering with Tyee, the old money firm of Laird Norton Trust Co. picked up an independent advisory business offering services to the region's wealthy young entrepreneurs. And Tyee joined a firm that managed money for more than 300 members of one of the Pacific Northwest's lumber scions, giving it expertise and a reputation in managing intergenerational wealth-not to mention the trust company and estate planning component. (See sidebar, "The Making of a Merger," for more on how the firms combined.)

Barbara Potter, who heads up the firm's fiduciary services team and is an alumnus of the old Laird Norton Co., says the tenor of the firm has changed a lot from its days as a family office. Employees once had to watch what they said to clients, because they might want to show something that one client did as a bad example for another, and yet for all they knew, they were talking to the first client's sister or cousin.

"It was very different in that it was only a handful of non-Lairds or Nortons," Potter says, noting that today, these family members are only 25% of the client base. Much of the other 75% is not inherited wealth at all. "It's money people made by owning or selling their business. It's personally made wealth rather than inherited wealth, and that's very different."
With about $4 billion in assets and more than 425 clients as of September 2008, the firm caters to business owners, founding shareholders and senior managers of private companies as well as multigenerational wealth. Its average client has about $7 million in investable assets. Its most wealthy clients have as much as $100 million.

The firm prides itself on its open-architecture approach, meaning it puts clients into third-party products rather than its own. Moreover, none of the investments generate referral fees for the firm, which makes its recommendations conflict-free. Laird Norton Tyee makes its money by charging clients an annual fee for its advice.

"We don't take soft dollars or the whole laundry list of other things," says Kaycee Krysty, the firm's chief executive officer. "We are only paid by our clients. There are a lot of people who say they are fee-only, but they aren't as strict about it as we are."

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