Making the family your client

This is what I am hearing when I talk to my clients: “I don’t want my kids to fight over our money. I’m concerned that my money might lead to entitlement. I want to have a way to protect my children and grandchildren from the damage that our money can do to them. I believe that my wealth is more than money, but I don’t know how to manage this aspect with my current set of advisors.”

What are you hearing from your clients? And what have you done to address what you have heard?

To address what I was hearing led to a pivotal and game-changing transformation to my practice — total wealth management.

Imagine that you are woken up by your 5-year-old daughter who tells you that she smells smoke. You gather your family of four and congregate by the designated tree in front of the house. As you look back at the house, you see no flames, so you decide to return to gather a few items. As you enter the center hallway, the smoke is getting thicker. You drop to the floor and begin crawling down the hall. Your mind is racing as you realize that there is not enough time to gather all the things you would like.

There is a fireproof box in the bedroom closet with $30,000 in cash. In the room off of the kitchen is your laptop with all of your critical projects that you have not backed up in over six months. And in the hall closet is a box of family heirlooms that you just collected from your mother’s house after her passing. You make a snap decision to get just one item. You grab it and, as you exit the house, you turn around and see the house burst into flames.

Did you go for the money? Did you go for the thing that makes the money? Did you go for what’s “more than money”?

From my experience, the majority of people go for the family heirlooms. It’s what the majority of people feel is most important — their family. And growing a healthy family is high on the list of priorities. But how does a family grow strong roots to their family tree?

How is it that the giant redwood can grow to such heights? It is not the individual root system of each tree, but rather the interdependence of the roots of many generations, from old growth to the newest seedlings, that supports the family of trees as they reach the sky.

A critical aspect of building strong family roots is renewing focus on intangible assets — what we refer to as the “more than money” legacy.

At 3D Wealth Family Office Services, we have incorporated “more than money” advising alongside our traditional money advising. Here are the elements that go into the mix:

• A shift in focus from the individual as the client to the family as the client
• Incorporating multiple generations of the family into the planning process (yielding to a more likely successful succession plan)
• Incorporating multiple generations of the advisory practice into the planning processes (yielding to a more likely successful succession plan)
• Utilizing digital technology (using the next generation’s preferred mode of information processing) to connect the advisor with the family and the members of the family to one another
• Separating the “more than money” family office practice from the money practice. This will help the advisor from falling back into the traditional transaction trap

Monroe M. Diefendorf Jr., CLU, CIMA, is a 42-year MDRT member from Locust Valley, New York. Hear more in the new episode of MDRT Presents: