Q: So then can the financial advisor be the one leading this retreat?
A: If the purpose of the retreat is to have a discussion of the assets, tax-efficient strategies, investments and future outlook on the economy, then financial advisors can do a terrific job. If they want to start moving into the land of family conflict or unresolved or what I call facilitating difficult discussions, then they're going to be in a challenged position.
Most advisors-and I know hundreds of them-don't want to go there because it's too risky. Why risk the goodwill that you've created on the financial side by stepping into the landmines of the family, the unresolved family issues?
Q: When families get into issues of ownership of the business and roles in the business, are you saying that's just not an area where financial advisors want to go?
A: That's an area where financial advisors may not be comfortable leading the discussion. They certainly should be participants in the financial side of those discussions. But leading that discussion could cost them a client. I've seen it happen many times.
Q: What can go bad?
A: For instance, take a case where the younger generation thinks that Dad and Mom ought to retire and let them run the business. Well, the financial advisor is conflicted immediately. When the father turns to the advisors and says, "What do you think?" what's he going to say? Is he going to risk disagreeing with the father, who is probably paying for the retreat and for his financial advice? Or is he going to risk losing future business from the younger generation? That's the kind of trap you can get stuck in.
Q: How do you deal with those no-win situations?
A: When I take on a case, I tell everybody in the family that I have four rules. One of them is that I'm neutral in this process. I'm not on anybody's side. Every once in a while, a father who is paying my fees will say to me before the retreat, "John, now remember here who's writing the checks." And I'll stop right at that moment and I'll say, "Bill, what did I tell you the first day we met? I'm going to pretend you didn't even say that. I'm neutral in this process. If you want my advice, I'm going to give it to you. But don't ever say that again to me." If someone is going to try to buy themselves a solution, I have no interest in doing that.