Financial advisors are often on the front line when spotting signs of conflict in client families. Advisors see the stalled decision-making and family leaders blind to the impact of their control. When there’s conflict between siblings, the advisor is often caught in the middle.
Left unaddressed, family discord can adversely impact a successful wealth transition and unravel the good work of the advisor. Assets may be lost and family unity disrupted.
While advisors are experts in asset management and estate planning, they are not necessarily experts when it comes to family dynamics. Yet client families expect their trusted advisors to do what is in the family’s best interest long term. The challenge advisors face is how to get clients to take action and address the conversations they are avoiding. Advisors must also be able to offer resources when the situation is outside their areas of expertise.
Helpful suggestions to jump-start stalled families:
1. Make them aware of the dangers of not engaging the family dynamic. Suggest to them that they have put a lot of time and effort into their estate planning and protecting the assets. Spending some time on preparing the family for the assets completes the planning process. Consider sending them short articles, or perhaps a book on the subject.
2. Develop a personal compelling story of why you care. Advisors who speak from their own experiences are more authentic and credible when sharing examples of where they have seen family conflict become the source of assets dissipating and families disintegrating.
3. Use the very issues and behaviors as the tip of spear. When a family stalls in its decision-making, point it out. Ask the family leader, “If you were to guess at a reason for why it is taking three years to pull everyone together, what would you suggest it might be?”
In another example, if you find yourself in the middle of a conflict between siblings, ask one of the siblings, “I am having a similar conversation with your sibling and I don’t see the two of you getting closer together on this issue. What do you see would be needed for you to agree?” Another question would be, “What do you see happening if you don’t agree on this one?”
When the wealth creator would rather not tell the family about the estate or the plan to transfer it for fear of it overwhelming them, state your observation of that dynamic: “I hear you saying you are concerned that the wealth may be a disincentive for the kids. What stops you from telling them what your expectations are? Would you say the wealth is leading their lives, or are they leading the wealth?”
4. Suggest a family coach. If the wealth creator has concerns about the ability of the next generation to stay together after the wealth transition or is uncomfortable engaging in deeper conversations, suggest a family coach to bring more alignment to the family. A skilled family coach can teach the family how to have conflict be generative as well as leading discussions around family values and expectations.