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.