A New Breed of Planner
From my vantage point, I believe we are witnessing the budding of a fresh, new model of planning and the appearance of a brand-new breed of advisor who is capable of working with clients in a revolutionary new way. And yet, while I call it “fresh” and “brand-new” and “revolutionary,” it is really as old as human communication. It is financial planning and estate planning based on our native language of story. I have not only envisioned the possibilities but have also experienced them, and I’m happy to report they are very tantalizing, both for clients and advisors.
I believe there are exceptional advantages for families and individual clients who work with financial advisors and estate planners who personally understand the power and importance of sharing and saving stories, and who have the skills and tools to elegantly and seamlessly weave a story-based approach to client services into their handling of the more traditional elements of planning such as investments, insurance, taxes, legal documents, public benefits, charitable giving, and the like.
Traditional financial services and estate planning, with their emphasis on numbers, formulas, tax codes, legal minutiae, and other “hard” issues, are not usually thought of as being naturally compatible with the “soft” issues of stories. Some in these fields tend to pooh-pooh the notion that story has much, if any, relevance to what they do. Story to them is just “warm and fuzzy,” “touchy-feely” kind of stuff.
But I don’t think there is a conflict between good technical skill and good story skills. I think both are essential to good results.
We believe those planners who look down their noses at story skills run the risk of creating glorious, gleaming plans that are technically correct but inside are empty shells because they fail to connect with the human dimension of planning. As a result of not checking carefully with the people involved, their ladders of “successful” plans end up leaning against the wrong walls, to borrow Covey’s metaphor. Like the Alaskan congressman’s ultimate earmark boondoggle, they design and build the financial or estate planning equivalents of “the bridge to nowhere.”
Good technical expertise and good story skills are both required to do the job right and to do the right job. I had an experience several years ago that illustrates this point. The names and some of the non-material details have been changed to protect the client’s identity.
Mr. Jacobs came to see our firm when he was 88 years old. With an estate worth approximately $9 million, he was looking down the barrel of an estate tax of about $5 million, largely because of some botched planning that had previously been done for him.
After reviewing the situation, I asked Mr. Jacobs if he were open to the idea of charitable giving. He was. “I’ve been a lifelong member of Rotary, and I’d be happy to donate $2,000. My deceased wife was an active member of a sewing club. I could give them $3,000 in her memory.”
I decided to save the discussion of charitable giving for another time. Instead, I started getting to know Mr. Jacobs. He was a good man with a remarkable story. It seems he had grown up and spent his long life on two pieces of ground. Born in upstate New York, he had lived on a farm there until his family moved when he was 10. They bought a small farm near the town of Ocoee, where he had lived ever since.
He’d certainly had his share of misfortune. As a boy in New York, he had lost an eye in a farming accident. He also had had polio, so one of his legs was withered, and he walked with a pronounced limp. He had been married for many years, but his wife had passed away about five years before I met him. He had one child, a daughter in her mid-50s who had not fulfilled any particular ambitions, and still waited tables at a local all-you-can-eat restaurant. She had two children, a son and a daughter, both in their early 20s at the time. Both were heavily involved with illicit drug use. The son had been arrested for dealing drugs for his father, Mr. Jacobs’ ex-son-in-law, who was serving time in a federal prison. Mr. Jacobs’ granddaughter also was pregnant; Mr. Jacobs did not know who the father might be.
In view of all this, and understandably, while Mr. Jacobs wanted to make sure that his child’s and his grandchildren’s needs were met, he certainly had no intention of leaving them $9 million. Mr. Jacobs had worked hard all his life. When he was a teenager, he and his father had built a service station on their property, which Mr. Jacobs had operated since he was 18. He told me interesting stories about sleeping in the station all night, so in case a car drove by he would be there to sell them a quarter’s worth of gas. At one point, he owned his own tanker truck, and worked in the station all day, and drove a tanker to Tampa, which in those days, took four or five hours, filled up, drove back, and worked all day taking care of customers.
Ocoee, where Mr. Jacobs lived, might fairly be described as a stepchild of Orange County—a town with a hard luck story much like Mr. Jacobs’. In the early 1920s, there had been a race riot there on Election Day. Several people were killed—an incident that had stigmatized the town and still cast a shadow over it even these many years later. Early in the Great Depression, the town lost its bank, leaving it no source of lending for businesses looking to put down roots and grow there. Mr. Jacobs told me that he knew a number of merchants who went to the bank of a nearby town seeking a loan, and were refused because the bank did not want to support businesses that would compete with those in its own town.
Mr. Jacobs chose to use this setback as an opportunity. In the 60s, he and a few Rotary Club buddies opened a bank in Ocoee. He donated the property on which the bank was built. One merger followed another until eventually Mr. Jacobs’ investments of land for the bank had returned the current value of his estate—$9 million.
Mr. Jacobs and I spent a good bit of time together. I helped him capture and articulate some of these stories. I wanted to make sure that, in addition to protecting the financial resources he had, we also preserved the rest of his wealth—who he was, what he had learned, and the values that have guided him to his hard-won wisdom, and ensure that these somehow would be passed along intact to those who would follow him, even though, at the time, they did not seem particularly interested in what he had to say.
As we talked one afternoon, I was struck by an insight into what might be important for Mr. Jacobs. He was describing his friendships and associations with citizens of Ocoee, his adopted hometown, and it suddenly seemed clear to me that this was the key. “Mr. Jacobs,” I asked, “what would you think if we could take the money in your estate that otherwise would go to the IRS, and instead direct it into an account that you and those you trust could dispense for projects in Ocoee?”
He looked at me and asked, “What do you mean?”
“We could take the money that otherwise would have to be paid in taxes, and see to it that it was spent to improve the town and the lives of the people there.”
He was intrigued. “Give me an example,” he said, leaning forward.
“Well,” I said, “suppose that the elementary school needed new playground equipment. We could take some of the money that we had set aside in a special fund—one that you and those you trust could control—and buy the equipment. If the girls needed a new softball field to play on, you could finance its construction. If you just wanted to make the Christmas parade extra special one-year, you could direct funds to do just that.”
Mr. Jacobs’s eyes grew wide; I could see he was imagining the possibilities. “We could do that?” he asked.
“Indeed, we could. And it wouldn’t take away anything from your family, because the money we’d be using to set up the fund would otherwise just have gone to the government.”
Mr. Jacobs sat back in his chair with a deeply satisfied grin. “This is exciting,” he said, and a new mood of enthusiasm came over him. He was already planning what he would do with the money.
Rather than giving $2,000 to the Rotary Club or $3.000 to his wife’s sewing circle, Mr. Jacobs ended up contributing $5 million. The money was used, as we had discussed, to create a fund to benefit the city of Ocoee—a fund that would be controlled by him and those he trusted, and be used expressly to support worthwhile community projects for that town, in keeping with the things that Mr. Jacobs felt were most important. With his wife gone, and appropriate arrangements made to care for his child and grandchildren, his remaining great love was the town of Ocoee. The difference that this advising made for him and for the citizens of Ocoee may well extend beyond the foreseeable future, benefiting countless generations to come.
I believe the best advisors are those who are able to engage their clients on the story level and then use the insights and understandings gleaned in that exchange to build technically brilliant plans that reflect the values, personalities, fears, dreams, wisdom, and life-learning of their clients and their families.