2024 FOX Family Office & Wealth Advisor Forum Recap
Enjoy a recap of the 2024 Family Office & Wealth Advisor Forum by Erin Hulse, Founder of Deviate Consulting.
Monday, July 15, 2024 | Day 1
Unlocking the Value of Time Capital
John K. Coyle, Design Thinking Expert, Olympic Medalist, and Emmy Award Winner
John emphasized the importance of time management, memory creation, and storytelling in shaping personal experiences and identity. He shared personal anecdotes and discussed the concept of the 'flow state' in memory retention and the need for challenge and growth in personal development. John also highlighted the significance of aligning work with personal interests, evaluating the ROI of various investments, and the impact of our choices on others' lives.
Time Management, Priorities, and Determination
John led a discussion on the importance of time management and its impact on personal priorities. He encouraged the team to reflect on their current strategies and consider whether they align with their values. John also presented a thought-provoking scenario about the potential trade-off of an extra day per week for more time with loved ones. The conversation ended with John sharing his personal experience of running with the bulls at the San Fermin Festival in Spain, highlighting the importance of determination, camaraderie, and strategic thinking in such situations.
Savoring Moments for a Slower Perception of Time
John discussed the importance of savoring moments rather than focusing on the passage of time. He explained that our memories shape our identities, so we should consciously record significant experiences. John argued that as we get older and fall into routines, time seems to accelerate due to a lack of novel stimuli. To counteract this, he recommended embracing new experiences that create rich emotional memories to make time feel slower. John presented his theories using metaphors from neuroscience and his own background as an Olympian.
John shared a personal anecdote about his friend Amalia, who overcame her fear of performing and emphasized the importance of taking risks and expanding one's experiences. He also discussed the paradoxical relationship between time perception and memory, arguing that experiences that may seem boring or monotonous in the present can be vividly remembered later. Lastly, John highlighted the significance of storytelling in guiding our lives, pointing out that all stories, across cultures and time, follow the same pattern, suggesting that understanding and utilizing this pattern can help us better design our lives and experiences.
Time Experiment and Appreciation Challenge
John shared a personal experience and discussed the concept of time, including its malleability and the phenomenon of time dilation. He proposed an experiment for the team to design a week of their lives with memorable moments, aiming to find value and appreciation in routine days. The team agreed to participate in this experiment.
Eugene O’Kelly's Remarkable Life and Legacy
John shared the story of Eugene Kelly, the former CEO of KPMG who was diagnosed with brain cancer and given 90 days to live. Instead of focusing on his impending death, Eugene decided to design his remaining days to maximize experiences and time with loved ones. He recreated memorable moments and made new ones, including traveling to see the Northern Lights and the castle of prophecy. John highlighted Eugene's gratitude and hopeful outlook, even in the face of his terminal illness.
Memory Retention and Flow State Strategies
John discussed the science behind memory retention and the concept of the 'flow state', which is a peak performance zone where time seems to disappear, and internal thoughts stop. He explained that being in a state of high emotional intensity, uniqueness, and risk can enhance memory recall. John emphasized the importance of creating memorable and impactful moments, suggesting that two such moments per year could be beneficial. He also offered to provide a consultant's guide to help people design these moments.
Creating Memorable Experiences on a Budget
John shared two stories about creating memorable experiences without breaking the bank. The first involved surprising a client's son on his 12th birthday by arranging a soccer match in London, while the second was about observing a meteor shower with his business partner's children. John also shared his ongoing search for a romantic partner, recounting a humorous anecdote about planning a surprise show for a date, which unexpectedly turned into a free performance by Ariana Grande. Despite this setback, John remained optimistic and continued his search.
Evaluating ROI, Aligning Work, and Growth
John underscored the need to evaluate the ROI of various investments and suggested focusing on high-value activities. He advocated for aligning work with personal interests for a more fulfilling career and highlighted the concept of the 'flow zone' for optimal work performance. John also cautioned against becoming too complacent in one's comfort zone, emphasizing the importance of challenge and growth for personal development.
John's Personal Journey and Impact
John shared his personal journey of overcoming challenges and achieving success. He discussed how a chance encounter with a former convict led to his acquiring a rotating pedestal, and how this experience inspired him to write a letter to a man whose son had won a silver medal at the Olympics. John emphasized the importance of the choices we make and how they can impact others' lives. He also mentioned his work as a consultant, his experience as a commentator at the Olympics, and his role as an analyst for NBC.
The Human Factor of AI: Preparing Your Organization for Positive Disruption
Dr. Alexander D. Wissner-Gross, Founder and CEO, Reified
Kent Lawson, Chief Technology Officer, FOX
Jeff Strese, Family Learning and Leadership Consultant, FOX
The team discussed the exponential growth of AI and its potential applications in various fields, including family offices, and emphasized the importance of human capital, communication, and effective leadership in implementing change. They also highlighted the predictable grief cycle during times of change and the role of change leadership in managing resistance and maintaining productivity. Lastly, they stressed the significance of employee engagement, emotional intelligence, and a collaborative approach to technology implementation amidst the challenges of integrating AI and the impact of the pandemic on technology within family offices.
AI Encoding Principles for Conversational Systems
The team discusses the potential of using AI to encode principles and wisdom for applications like conversational systems for wealth management. They highlighted the emergence of language agents that could act as intelligent advisors, leveraging capital and wisdom from previous generations. They emphasized considering future legacy and the need for positive disruption when implementing change initiatives in the family office. Kent is recognized for his emotional intelligence, seen as valuable for technology leaders driving change.
Embracing Technology and Change Leadership
The team emphasized the importance of human capital and the role of technology in solving business needs. They discussed the need for a culture of lifelong learning to adapt to new technologies and overcome the fear of being replaced by AI. They also highlighted the significance of change leadership and the need to understand and maximize the potential of new tools. They pointed out that resistance and back-channeling information often stall technology implementation, underscoring the necessity of clear communication and leadership. They also mentioned that a roadmap and specific slides with recommendations and strategies for change leadership would be available for the team.
Effective Communication and Leadership in Change Implementation
The team emphasized the importance of effective communication and leadership in implementing change. They discussed the need for a growth mindset and the ability to facilitate cross-functional collaboration. They highlighted the significance of addressing concerns and building trust during the change process. They also stressed the importance of considering the culture and readiness of the organization before implementing new technologies. They presented a model that outlines the expected level of performance during times of change.
Navigating Change and Managing Grief Cycles
The team discussed the predictable grief cycle individuals, teams, and organizations experience during times of change, such as those experienced during the pandemic. They emphasized the importance of navigating this cycle effectively to maintain talent and culture. They stressed that perfection is not attainable when implementing change and encouraged a 'do it as fast as you can, ask forgiveness later' approach, especially in the context of rapidly evolving technology. They also highlighted the need for coaching, training, and upskilling to prepare for future job disruptions.
Change Leadership and Managing Resistance
The team emphasized the role of change leadership in managing resistance to change and maintaining productivity. They shared examples of organizations that successfully navigated through failed implementations by adopting a positive destruction approach and focusing on change management. They then asked the attendees to discuss ways they have addressed resistance to change in their own offices. They also highlighted the importance of understanding and addressing the common frustrations and challenges in change leadership.
Employee Engagement and Human Capital Strategies in Organizational Change
The team emphasized the importance of human capital strategies and career development in the context of organizational change. They discussed the three categories of employee engagement according to the Gallup organization: engaged, disengaged, and actively disengaged. They stressed that engaged employees are committed, change-adaptive, and fully committed to their jobs, while disengaged and actively disengaged employees may be resistant to change and can negatively impact the organization. They underscored the role of leaders in managing change and maintaining employee engagement, particularly during times of disruption. They also highlighted the ongoing nature of these efforts, emphasizing that they are not tied to specific seasons or events.
Intentional Change Leadership and Employee Engagement
The team stressed the importance of intentional change leadership and its impact on employee engagement. They highlighted that managers and leaders need to focus on coaching and delegating responsibility to their team members as a career pathing strategy. They also emphasized the significance of addressing and encouraging learning from employees, particularly during times of disruption, to foster higher engagement. They further discussed the necessity of investigating and addressing negative behaviors within the workplace. Lastly, they underlined the critical role of emotional intelligence in navigating the new economy and its importance in achieving successful leadership outcomes.
Emotional Intelligence, Collaboration, and Technology Integration
The team underscored the significance of developing emotional intelligence and self-awareness to navigate changes successfully. They advocated for a collaborative approach to technology implementation, considering both technology and family office requirements. They also identified language and security as major challenges in integrating AI and emphasized the need to manage wealth owner and organizational leadership expectations in preparing for generational shifts. They further discussed the impact of the pandemic on technology within family offices, stressing the importance of a gradual adaptation to new technologies.
Tuesday, July 16, 2024 | Day 2
Trends Transforming Management of Family Wealth
David Toth, President, Membership, FOX
David discussed the significant changes and trends in the global investment landscape, including the impact of the Big Bang and the emergence of a new generation of providers. He also highlighted the increasing complexity of the global wealth landscape, the shift towards a more human-centric approach, and the changing landscape of the advisory industry. Lastly, he emphasized the importance of understanding families' values and investment strategies, and the challenges this presents for service providers.
Global Investment Landscape and Transformative Trends
David discussed the significant changes and trends that are shaping attitudes towards wealth and the global investment landscape. He highlighted the impact of the Big Bang on the universe and used this metaphor to illustrate the transformative effects on the financial world. David also emphasized the importance of understanding the rollout effects of these changes and their impact on portfolio groups. Lastly, he touched on the emergence of a new generation of providers and the transformation of roles within the industry.
Global Wealth Landscape and Attitudes
David discussed the increasing complexity and messiness of the global wealth landscape, highlighting the doubling of wealthy households and family offices over the past five years. He noted that traditional sources of wealth creation, such as first-generation business owners, are being challenged by new forms of wealth, including those from alternative investments. David also pointed out the changing attitudes towards wealth, with 77% of respondents expecting some intergenerational support and 78% valuing added services outside of investments. He emphasized the rising demand for education and gender engagement, and the challenges this presents for service providers.
Human-Centric Approach for Financial Decisions
David discussed the importance of understanding families' values and investment strategies to better inform financial decisions. He highlighted the shift towards a more human-centric approach, where human capital informs decisions on financial capital, leading to more sustainable solutions. David also noted the significant changes in portfolio allocations over the past decade, with a 10% and 20% growth in private equity allocations. He pointed out the need for more advisors to assist families in their direct investing, and the high percentage of family work in family offices.
Advisory Industry Transition and Skills Development
David discussed the changing landscape of the advisory industry, emphasizing the need for advisors to develop strong qualitative skills to effectively work with families. He highlighted the top skills such as trustworthiness, good service communication, and high emotional intelligence. David also pointed out the industry's transformation, with a shift towards long-term thinking and privately oriented families. He noted the challenges this presents, particularly in preparing the next generation of advisors. David also touched on the rising fees for services and the increasing distinction between the advisory industry and wealth management. Finally, he reminded the team about the membership satisfaction survey.
David discussed the significant changes and trends that are shaping attitudes towards wealth and the global investment landscape. He highlighted the impact of the Big Bang on the universe and used this metaphor to illustrate the transformative effects on the financial world. David also emphasized the importance of understanding the rollout effects of these changes and their impact on portfolio groups. Lastly, he touched on the emergence of a new generation of providers and the transformation of roles within the industry.
Wealth Transfer Planning: Top of Mind Considerations
Kim Kamin, Partner, Chief Wealth Strategist, Gresham Partners LLC
Barbara Grayson, Partner and Midwest Chair, Private Wealth Group, Willkie Farr & Gallagher LLP
Kim discussed the complexities of setting up trusts and the importance of flexibility in the face of potential challenges such as divorce and changes in tax laws. She also highlighted the need for accurate valuations, leveraging gift tax exemptions, and the importance of building flexibility into trusts for future unknowns. Lastly, she outlined upcoming changes to various provisions and urged attendees to take advantage of current bonus exemptions and to draft with maximum flexibility for future uncertainties.
Agenda Overview and Trust Reimbursement Discussion
Kim introduced Barbara and outlined the agenda including recent developments, the corporate transparency act, TPJA sunset exemption planning, and drafting for flexibility. She discussed the importance of a trust reimbursement clause in the Grantor Trust and potential risks of transferring interests between beneficiaries. Barbara highlighted the IRS's concerns regarding interest transfers and possible solutions like using a trust protector. She mentioned her campaign to persuade states to enact statutes allowing default branch or trust reimbursement. Barbara was then to discuss the Corporate Transparency Act in detail.
Entity Reporting Requirements and Exceptions
Barbara discussed the reporting requirements for entities, explaining that not all entities need to report. For instance, entities with less than 10 full-time employees in the US, those without a physical presence, and those with less than $5 million in gross assets are exempt. State-regulated private trust companies are also exempt, but not all entities owned by a private company qualify. Tax-exempt organizations and political organizations are subject to reporting rules. Barbara emphasized the importance of identifying beneficial owners, defined as those who exercise substantial control over the entity, directly or indirectly. She also clarified that trusts with broad beneficiaries and discretionary distributions may not have a beneficial owner. Exceptions to reporting include minors, nominees, employees, and future interests through inheritance or creditor.
Addressing Client Identification and Tax Changes
Kim discussed the challenges her clients face in providing valid identification for beneficial ownership structures, emphasizing the need for non-expired IDs. She recommended obtaining a beneficial ID and utilizing vendors for filing. Kim highlighted upcoming changes to the corporate transparency act taking effect in 2025, advising clients to prepare and utilize service providers. She also mentioned the impending expiration of the TCJA (Tax Cuts and Jobs Act) bonus exemption, stressing the importance of staying informed about potential legislative changes due to the election. Kim emphasized planning for current tax laws while preparing for potential changes, considering clients' remaining exemptions.
Irrevocable Trusts and Divorce Considerations
Kim discussed the complexities of setting up irrevocable trusts in the face of potential divorce. She emphasized the need for flexibility and precision in drafting these trusts, as divorce can have significant implications for the trust's beneficiaries. Kim suggested that trustees or fiduciaries should have the power to remove a divorcing spouse from the trust or transfer trust assets to a new trust where the spouse is no longer a beneficiary. She also cautioned against assuming that a divorce would be adversarial or permanent, as reconciliation is a possibility.
Navigating Flexible Gifting for Clients
Barbara discussed the complexities of helping clients preserve flexibility while making gifts. She emphasized the importance of accurate valuations and using formula-based gift provisions to ensure clients do not exceed their exemptions. Barbara also highlighted the need to identify and utilize available assets, suggesting creative solutions like using convertible notes to move assets out of irrevocable trusts. She stressed that for most clients, setting up trusts that can grow without income is ideal. Barbara also noted the time value of money leveraged through discounts for very wealthy clients using exemptions to transfer as much wealth as possible into trusts.
Leveraging Gift Tax Exemptions Strategically
Kim discussed strategies for planning and utilizing gift tax exemptions. She emphasized the importance of leveraging existing trusts and documents and modifying them to build in more optionality. Kim also suggested using the gift tax exemptions efficiently, considering a trust merger or transferring assets to ensure full utilization of the exemptions. She highlighted the need to review and clean up client documents, notices, and intra-family loans, and encouraged the use of annual exclusion gifts as a powerful gifting tool. Kim also stressed the importance of client engagement and using the current focus on sunset and CTAs (Corporate Transparency Act) as an opportunity to review and potentially adjust clients' plans.
Upcoming Changes and Tax Rate Increases
Barbara discussed upcoming changes to various provisions, including the sunsetting of some and the continuation of others. She highlighted that tax rates would increase, the state and local tax deduction would be unlimited once again, and the API limit on tax donations to charities would be reduced. Barbara also mentioned the end of the qualified business income summer, the permanent deletion of certain technical termination rules, and the discontinuation of 1031 exchanges for personal property. She emphasized the importance of building flexibility into client documents to adapt to future changes.
Building Flexibility into Trusts for Future Uncertainties
Kim emphasized the importance of building flexibility into trusts for future unknowns, such as changes in laws or family needs. She suggested including features like multiple grantor trust powers, the ability to add charities, and provisions for changing the governing law or removing underperforming trustees. Kim also highlighted the value of having a trust protector and a statutory campaign or independent trustee to move assets to ultimate beneficiaries. She concluded by urging the attendees to take advantage of current bonus exemptions and to draft with maximum flexibility for future uncertainties.
Strategic Approach to Managing Family Office Complexity
Amjed M. Saffarini, Chief Executive Officer, Trove
Peter Moustakerski, CEO, FOX
Amjed shared his insights on the evolving landscape of family offices, emphasizing the need for understanding and effectively managing their complexities, and the importance of aligning work with team members' interests. He also discussed the significance of having an operating manual, understanding, and mapping the different dimensions of the families they work with, and the value of analyzing metadata collected from 450 families. Lastly, he touched on the challenges of managing and reporting on family estates and businesses, the value drivers in liability administration, and the concept of philanthropic wealth.
Amjed's Journey and Firm Growth
Amjed shared his journey of learning about family offices and how his definition of a family office differs from the traditional financial construct. He discussed the growth of his firm, which is entirely owned by the team and has expanded significantly in the past few years. Amjed emphasized the importance of understanding the needs of clients and the complexity of their operations. He also highlighted the company's mission to transform complexity to clarity, their commitment to objectivity and smart decision-making, and their dedication to sweating the details.
Managing Family Offices and Transitioning Trends
Amjed discussed the company's unique approach to managing family offices. He shared that the company, a three-year-old venture with 20-year-old foundations, gave teams the opportunity to design a 'clean sheet' family office, resulting in the successful management of over 150 family offices with hundreds of members. Amjed also highlighted the company's focus on serving first-generation wealth creators and anticipated the transformation or disappearance of many of the 6,000 existing family offices due to changing complexity. Lastly, he mentioned the existence of institutional family offices that recognize their efficiency in specific verticals and seek partnerships.
Complex Assets and Family Offices
Amjed discussed the shift in wealth towards complex assets and its implications for family offices. He highlighted that the complexity of these assets, driven by passions, can lead to chaos and consume a significant amount of time in family offices. Amjed also pointed out the limitations of traditional balance sheets in accurately reflecting the true complexity and multi-dimensionality of these assets. Lastly, he initiated a poll to gather the team's views on the concept of a 'once the Female Family Office'.
Managing Complexities in Family Offices
Amjed emphasized the importance of understanding and effectively managing the complexities of the family office ecosystem. He highlighted the need for competency in various areas, such as tax and accounting services, investment management, and family engagement education. Amjed also pointed out the gap between the skills family officers typically have and the complexity families may require, suggesting that officers must learn to 'sell' these gaps by continuously educating themselves on new topics. He used the example of private jets and airport knowledge to illustrate this point, stressing the need to understand and communicate about things that matter to the family.
Aligning Work with Team Passions
Amjed discussed the disconnect between the work done and the passions of the team, emphasizing the need to align work with team members' interests. He highlighted the complexity of family offices and the challenges they face, referring to a podcast about Japanese families' 1,000-year-old companies. Amjed also addressed the team's discomfort with their current governance framework and operating model, suggesting that a year off to build a dream family office could be beneficial. He encouraged the team to reflect on the list of issues and identify which ones resonate with them.
Operating Manual for Family Offices
Amjed emphasized the importance of having an operating manual for family offices and suggested that this could help mitigate risks and improve team succession. He highlighted the need to understand the audience, or the family in question, and to build an archetype, considering factors such as the value stream, journey map, and communication layers. Amjed also stressed the importance of considering transactional and communication aspects, including physical, virtual, and third-party interactions. He offered to discuss these points in more detail with Jamie.
Understanding Family Dimensions and Data
Amjed emphasized the importance of understanding and mapping the different dimensions of the families they work with. He highlighted the significance of various forms of capital, such as financial, social, nonprofit, and political, and the need to understand how to translate one form of capital into others. Amjed also stressed the crucial role of data in their work, noting that it is the foundation of everything they do and must be properly ingested, managed, and transformed. He pointed out the complexity and variety of the data, and the challenge of structuring it all in one place. Lastly, He touched on the analytics layer, which involves investment reporting and analyzing the balance sheet from different perspectives.
Navigating Complex Family Estates and Businesses
Amjed discussed the complexity of managing and reporting on family estates and businesses. He used the example of aviation to illustrate the intricacies involved, highlighting the need for decision support to navigate these complexities. Amjed also touched on the different trajectories families can take, either maintaining a business-centric approach or diversifying into non-business activities. He suggested that over time, the latter may become more prevalent due to the complexity of managing businesses across generations. Amjed also mentioned the potential for a workshop to further explore these ideas.
Liability Administration Value Drivers Discussed
Amjed discussed the value drivers in liability administration, emphasizing the importance of data completeness, accuracy, efficiency, and analytics and compliance. He explained how these attributes can be assessed at different levels of complexity and sophistication, using accuracy as an example. Amjed also highlighted the utility of this approach in setting goals and requirements, using the example of a consulting firm helping to fill identified gaps. He encouraged the team to consider these ideas further and invited them to join her after the meeting.
Analyzing Metadata for Family Alignment
Amjed discussed the importance and benefits of analyzing metadata collected from 450 families. He emphasized how this data could help individuals benchmark themselves against their peers and align their goals and resources accordingly. Amjed also introduced the concept of a third model focusing on the inside career track within family operations. He highlighted the need for pathways and structure in family offices based on capabilities. Amjed also mentioned the significance of credibility in this context.
Family Offices and Outsourcing Decisions
Amjed discussed the challenges and considerations faced by family offices in deciding between in-house and outsourcing functions. He emphasized the need for family offices to understand their internal capabilities and external expectations and highlighted the importance of managing risk and aligning with client needs. Amjed also presented a comparison of costs for family offices and suggested that family offices should aim to have a broad understanding of the services they offer, even if they choose to outsource certain functions. He concluded by sharing a case study of a multi-generational family in the mountain west.
Philanthropic Wealth and Future Generations
Amjed discussed the concept of philanthropic wealth and its impact on future generations. He highlighted the importance of considering the lifetime value of a client and the potential for long-term investments to ensure their success. Amjed also emphasized the value of peer sharing and learning and expressed gratitude for the opportunity to work with outside wealth managers. The team then proceeded to lunch.
Value-based Advising: Going Beyond Transitioning Wealth to Transitioning Meaning and Impact
Rachel Caviness, National Client Relationship Director, Private Client and Family Office Services, BDO
Gabriella Salvatore, Human Capital Management, Practice Leader, BDO
Scott Muench, Managing Director, Membership, FOX
David Toth, President, Membership, FOX
Discussion on the importance of understanding and prioritizing values in family office relationships, emphasizing the need for humility, learning from clients, and effective communication. They also highlighted the process of identifying core values within a family setting and the significance of trust in family systems and advisor-client relationships. Lastly, they touched on various topics including the concept of a 'grand director', the role of an advisor in navigating complex intergenerational relationships, and the importance of trust in successful negotiations.
Prioritizing Values in Family Office Relationships
Discussion on the importance of understanding and prioritizing values in family office relationships. They guided the team through an exercise of sorting important and not important values, emphasizing the iterative nature of this process. They also highlighted the need for humility and learning from clients, and the importance of following up and communication in managing conflicts. The team was then tasked to continue sorting their values into important and not important categories.
Identifying Core Values in Families
They discussed the process of identifying core values within a family setting. They emphasized the importance of each family member feeling heard and the significance of the chosen words, which represent not only the present but also the family's history and shared experiences. They also highlighted the power of this process in creating memories and meaning, and the need to acknowledge and understand the significance of certain events in shaping the family's outlook.
Values-Based Advice and Human Capital Shift
Emphasized the importance of values-based advice in the meeting. They explained that individuals' brains process an overwhelming amount of information, and they select some data as important and ignore others based on their experiences, expertise, ethnicity, college degree, and values. It was stressed that values are a crucial driver of decision-making and that attendees were already applying this process in their daily lives. They also hinted at a shift towards focusing more on human capital and less on tax work.
Trust, Psychological Safety, and Family Systems
They underscored the significance of trust in family systems and its impact on decision-making processes. They discussed the concept of psychological safety and the factors that contribute to building trust, such as competence, motivation, and integrity. They also stressed the importance of open communication, collaboration, and understanding each other's values and desires within families. They shared their experiences with a group of cousins and highlighted the role of an advisor in navigating complex intergenerational relationships.
Discussion on Questions, Trust, and Testing
A discussion that touched on various topics, including asking for examples of questions that could be used for gathering information. They also expressed interest in the concept of a 'grand director' and noted the importance of testing. They emphasized the two-way nature of trust within a family context.
Trust in Advisor-Client Relationships
Emphasized the importance of trust in advisor-client relationships. They discussed a study conducted by the Harvard Negotiation Project, which found that 80% of successful negotiations rely on establishing trust. They highlighted that this trust is built through reciprocal behavior and mirroring, which is a fundamental aspect of human behavior. They stressed that as advisors, they have the power to influence and shape this behavior.
Human Capital: Insights and Your Questions Answered
Cassie Atteberry, Principal / Founder, Talent Outside the Lines
Gabriella Salvatore, Human Capital Management, Practice Leader, BDO
Peter Leo, Director, Human Capital, FOX
A discussion on human resources, focusing on the current labor market, its implications for family offices, and the need for a strategic approach in human resources. Highlighted the importance of employee experience, building a resilient workforce, and strategic conversations around retention and turnover. Lastly, they emphasized the need for a diverse and inclusive workforce, the impact of technology on the workplace, and strategies for attracting and retaining talent.
Human Resources and Family Offices
Cassie led a discussion on human resources, focusing on the current labor market and its implications for family offices. She emphasized the need to understand the broader picture and encouraged input on concerns related to human capital. Cassie also highlighted the importance of transitioning to a more strategic approach in human resources, given the changing world of work. She introduced the concept of the 'new shape of war' and its implications for the family office industry, particularly with regard to the potential disproportionate impact of family members. Cassie also noted a current labor shortage.
Labor Market Trends and Workforce Challenges
Cassie discussed the current state of the labor market, highlighting a significant labor shortage with hiring rates outpacing population growth. She noted the aging population and the resulting decrease in people entering the workforce, coupled with an increase in those leaving. Cassie emphasized the need for smarter upscaling and the creation of attractive work experiences, as well as the necessity of educating principals about these issues. She also pointed out the disproportionate representation of millennials and Gen. X in the workforce, with baby boomers and millennials colliding in terms of the percent they make up.
Workplace Compensation Challenges and Transparency
Cassie discussed the challenges and considerations in workplace compensation, particularly in relation to generational differences, pay equity, and financial education. She highlighted the complexities of determining employee pay, including the impact of inflation and the persistent wage gap. Cassie also emphasized the importance of transparency and financial education for both employees and principals and urged the team to be proactive in addressing these issues. Starting January 1, 2025, there will be new requirements regarding pay transparency, which Cassie noted as an opportunity for the team to educate their principals about these issues.
Employee Experience and Diversity Importance
Cassie emphasized the importance of employee experience, which encompasses not just the employee's value proposition but also their overall experience working at a company. She highlighted four key areas where companies excelling in this space are focusing: human-centric productivity, addressing burnout, promoting flexibility, and fostering trust through transparency and equitable work practices. Cassie also underscored the significance of diversity, equity, and inclusion in the workplace, noting that these aspects are becoming increasingly important as workforces become more diverse.
Building Resilient Workforce in the Modern Age
Cassie discussed the importance of building a resilient and ready workforce in the face of diverse risks in the modern world of work. She emphasized the need for workforce planning, prioritizing employee health and wealth, and providing learning and skill agility. Cassie also highlighted the significance of leveraging technology for insight and connection and noted that employees who enjoy experimenting with technology are more likely to thrive. Lastly, she urged for better communication and habit formation regarding topics regularly discussed with boards or principles to ensure they are on the journey towards the new world of work.
Strategic Conversations for Retention and Turnover
Cassie emphasized the importance of strategic conversations around retention and turnover, noting that not all retention is created equal. She urged family offices to rethink their approach to compensation, benefits, and career path, suggesting they should be more transparent and tailored to their workforce. Cassie also recommended that offices should listen to their employees and take actionable insights into account when considering career development. She offered to have further consultations to help with these issues.
Creating Inclusive Workforce and Leadership Development
Cassie emphasized the importance of creating a diverse and inclusive workforce, focusing on career growth, and learning opportunities. She highlighted the need for equitable talent processes, succession planning, and considering different work models to accommodate individual needs and preferences. Cassie also stressed the significance of addressing and managing generational and cultural differences within the workplace, and the necessity of developing strong leadership skills to complement technical expertise. She encouraged the use of resources like the "Admired Leadership" program to enhance leadership capabilities.
Technology, Workplace Transformation, and Gender Equity
Cassie discussed the impact of technology on the workplace and its potential to change work models. She highlighted the importance of using technology to drive insights and improve communication, while also cautioning against overwhelming the workforce with technology. Cassie also addressed the issue of gender and pay disparity in the tech community, suggesting that transparency and data analysis could help address this. She encouraged the attendees to share their best practices for using technology and promoting transparency in their organizations.
Attracting and Retaining Talent in Family Offices
Cassie addressed the challenges and strategies for family offices in attracting and retaining talent. She pointed out that the traditional recruitment approach is no longer sufficient and advocated for a more targeted and network-based approach. Cassie also emphasized the importance of aligning company values with daily operations and ensuring these values are embedded in the organization's culture. She highlighted the need for open communication, skill development, and accountability, and criticized the ineffectiveness of traditional performance review processes. Cassie invited the HR industry to share their insights on these matters.
Employee Retention and Work Culture Strategies
Cassie discussed strategies for retaining employees and creating a positive work culture. She emphasized the importance of understanding employees' motivations, providing opportunities for development, and staying in tune with their needs. Cassie also highlighted the challenges of balancing the needs of different generations within a team and the necessity of education about trends and challenges. She stressed the influence of 'signal setters' within the board and reiterated the importance of employee development.
Cultivating Future Family Leaders
Kim Llumiquinga, Senior Wealth Strategist, TFO Family Office Partners
Farrah H. Whitworth, Chief Operating Officer, Globe Trust Company, LLC
Mindy Kalinowski Earley, Chief Learning Officer, FOX
Kim discussed the dynamics of a family-owned business spanning three generations, emphasizing the importance of collaboration, communication, and the need for each generation to transform the operating business according to their interests. She also highlighted the process of assessing the family's dynamics, skills, and potential needs for external advisors, and the importance of introducing the younger generation to the concept of regular family meetings. Lastly, she discussed the extensive operations of the family business, the importance of the rising generation in the family enterprise, and the need to regularly review and update family governing documents.
Family-Owned Business Dynamics and Future Planning
Kim discussed the dynamics of a family-owned business spanning three generations. She highlighted the unique situation of having a female-led enterprise in the fourth generation, requiring careful management of wealth and family income. She also noted recent changes, such as separating the family homes from the operating business for tax and transparency purposes. Kim expressed concern about the impending mass exodus of key management positions and the need to define the corporation's future direction, emphasizing the importance of each generation having the freedom to transform the operating business according to their interests.
Family Leadership Generation Collaboration and Communication
Farrah discussed the importance of collaboration and communication within the family leadership generation. She emphasized that the older generation, or G4, should act as mentors and advisors, while also respecting the decisions and opinions of the younger generation. Farrah also highlighted the need for the younger generation to learn from the older generation's behavior and examples. She stressed the importance of developing relationships, building trust, and enhancing communication skills among family members. Farrah also mentioned the creation of a process to help the younger generation develop the necessary skills and tools to become effective leaders for the family.
Assessing Family Dynamics and Needs
Kim discussed the process of assessing a family's dynamics, skills, and potential needs for external advisors. She highlighted the importance of honesty in the assessment, particularly in regard to family dynamics, as this directly translates into skills that the next generation may need. Kim also emphasized the need for direct communication and addressing any misconceptions within the family. She further stressed the importance of ensuring that all generations, including the leadership generation, buy into the program and that it is tailored to the family's specific needs.
Introducing G. 5 to Family Meetings Process
Farrah discussed the process of introducing the G5 to the concept of having regular family meetings. She explained that the first year involved getting the G5 accustomed to the idea of having meetings, with activities designed to foster family alignment and celebrate family ties. Farrah also mentioned a survey and interview process to understand the family's feelings and challenges. She emphasized that the program's direction is entirely driven by the G5's commitments and goals. Farrah also shared that the annual G5 retreat is a four-day event focusing on learning, with a mix of technical topics, family governance team building, and trust building.
Family Retreat Planning and Impact
Kim discussed the organization and purpose of a recent family retreat. She emphasized the importance of the retreat as a means of fostering community and understanding among family members, particularly the next generation. Kim highlighted the unique learning opportunities provided by the retreat, such as conflict resolution training through shared tasks like cooking and cleaning. She also noted that the retreat serves as a guide for the content of learning sessions throughout the year. Kim expressed her pride in the family's active involvement in planning and executing the retreat.
Family Business Operations and Learning Opportunities
Farrah discussed the extensive operations of the family business, which includes swag bags with local products and private label wines. She highlighted the importance of learning opportunities, both through quarterly sessions and one-on-one office hours. Farrah also mentioned the initiative of a virtual coffee chat for employees to develop relationships with the family office. Furthermore, she introduced the 'Awkward Questions Committee', a system designed to allow family members to anonymously submit questions they might feel uncomfortable asking in person.
Engaging the Rising Generation in Family Enterprise
Kim discussed the importance of the rising generation (G5) in the family enterprise, highlighting their role as mentors to the next generation (G6) and their active participation in various committees. She emphasized the need to make the rising generation program engaging and fun, and to accommodate their busy schedules by offering flexible meeting times. Kim also shared that the program has learned to adapt and be flexible each year to better suit the needs and interests of the rising generation.
Reviewing and Updating Family Governing Documents
Farrah emphasized the importance of regularly reviewing and updating family governing documents to ensure they align with modern needs and the expectations of the next generation. She suggested involving the next generation in this process, as they will be influenced by the policies they help create. Farrah also highlighted the value of outside consultants in providing objective perspectives and commercial insights. She stressed the importance of making the process fun and engaging for all involved and shared her pride in seeing the growth and confidence of the younger members of the family. Farrah also pointed out the need to consider the budget for teaching and operating within the family's complex systems.
Wednesday, July 17, 2024 | Day 3
The 5 Principles of Invisible Wealth: A Framework for Redefining Wealth
Jennifer Wines, Author of Invisible Wealth
Mindy Kalinowski Earley, Chief Learning Officer, FOX
Jennifer emphasized the importance of personal values and the five principles she presented in a previous session, and how they can guide individuals in prioritizing their goals and achieving a rich life. She also discussed the concept of wealth, the retirement plans of two individuals, and the interplay between various assets, focusing on the principles of maximizing and trade-offs. Lastly, she highlighted the significance of technology, the integration of principles and values, and the concept of living a truly wealthy life, encouraging the use of personal values as a guide.
Prioritizing Principles for a Rich Life
Jennifer discussed the interplay between personal values and the five principles she presented in a previous session. She emphasized that individuals interpret these principles differently based on their unique values and life circumstances. Jennifer then moved on to discuss the importance of prioritizing these principles, acknowledging that it can be a challenging task due to the inherent value of each principle. She encouraged the participants to reflect on their current priorities and how they align with the five principles. Jennifer emphasized the importance of prioritization in achieving personal goals and creating a rich life, using the analogy of a Rubik's cube to illustrate the need to focus on one color at a time to solve the puzzle. She also highlighted that everyone has different values and reasons for their choices, and there's no judgment in playing different games. Jennifer stressed that prioritizing principles and goals, especially love goals, helps to create a clear vision and attract attention to what's essential.
Re-Defining Wealth and Identifying Themes
Jennifer spoke about the concept of wealth and the five principles that guide its pursuit. She emphasized the broad interpretation of 'wealth', allowing individuals to define it based on their values. Jennifer noted a shift in mindset towards wealth, with a growing positivity in discussions. She highlighted the themes that emerged from her clients' experiences and the process she uses to identify these. Jennifer also stressed the importance of practicality and relationships in their business operations and encouraged open dialogue to share examples of how this framework has impacted their requirements.
Retirement Plans and Goals Alignment
Jennifer discussed the retirement plans of two individuals, Susan and John, who had different approaches to their post-retirement lives. John, who had achieved a high-status position at a university, planned to focus on knowledge, status, and influence, while Susan, who was also successful, intended to concentrate on relationships with herself and others. Jennifer emphasized the importance of understanding each other's intentions and aligning their goals and timeframes. Despite their different paths, both Susan and John were able to support each other's plans.
Maximizing Assets and Trade-Offs Discussion
Jennifer discussed the interplay between various assets, focusing on the principles of maximizing and trade-offs. She emphasized the importance of time and energy in achieving one's goals and highlighted the role of money as a tool. Jennifer also touched on the concept of wealth as the number of physical transfers and transformations, introduced by physicist David Deutsch. She noted that there are likely exclusive trade-offs and the need to prioritize one's values to determine what can be maximized.
Identifying Top Assets and Faith
Jennifer emphasized the importance of identifying and focusing on one's top assets, which are inspired by one's values. She suggested a three-step exercise to help individuals determine their primary focus. Jennifer also highlighted the significance of mental and spiritual health, and the role of faith and religion in this context. She discussed how these aspects could be incorporated into an individual's top principles, and how they could be a source of comfort and strength in various life events.
Technology, Values, and Client Understanding
Jennifer discussed the significance of technology in enhancing visibility and managing stress. She highlighted the importance of values in the current and future economy, particularly for millennials, and Gen Z. Jennifer also emphasized the shift from quantitative to qualitative factors driving the economy. She then introduced a set of poll questions, focusing on the concept of values and their relevance in client understanding. Jennifer also touched on the changing dynamics of status and the need for exploration in this area.
Integrating Principles, Values, and Technology
Jennifer discussed the integration of principles and values, emphasizing the importance of understanding and positioning these concepts based on the individual. She highlighted the role of technology in providing new platforms for people to establish status, knowledge, and influence. Jennifer expressed her hope that those contributing value to society would be celebrated, noting the current state of social media and its impact on this dynamic.
Living a Wealthy Life Authentically
Jennifer discussed the concept of living a truly wealthy life, emphasizing the importance of authenticity, and understanding oneself. She encouraged the idea of using personal values as a guide and shared her anticipation for reading a new book on the topic. Jennifer also suggested that these concepts could be beneficial for families, particularly in improving communication. She invited further questions and comments and offered to share additional resources.
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Deviate Consulting is a professional services firm that provides a full suite of software consulting and back office services for single and multi-family offices. Our software expertise includes a wide range of investment and partnership accounting suites prominent in the UHNW wealth management space. |