Monday, January 27, 2014

The Problem is Our Planning

“We have met the enemy, and it is us.”  Pogo

             A. Two Problems, One Cause

The voice on the phone was filled with panic.  It was a seasoned and successful financial advisor from the Northeast and he was worried.  One of his best clients had died recently and things were spinning out of control. 

“His children won’t talk to me.  They’ve even hired a new estate settlement attorney.  I’m going to lose $2 million of assets I have under management and the $5 million of life insurance proceeds I set up for them in a dynasty trust.  They don’t seem to appreciate all I’ve done for them.  What can I do?  How can I hang on to this business?”

I had to break the bad news to him that, at this stage of the game, there wasn’t much he could do because his client’s children and grandchildren barely knew him.  All the great service he had given his client and all the great planning he had done for his client were not going to help him with his client’s children. 

Sadly, this episode is repeated frequently, very frequently.

98% of the time, professional wealth advisors lose their client’s business within one year of the death of their client. 

This phenomenon, well known to observant practitioners, has been documented by several in-depth studies, including a recent survey conducted by Price Waterhouse Coopers, Global Private Banking/Wealth Management Group.  This incredibly high attrition rate of 98% has severe implications for advisors wishing to maintain their firm’s profitability and eventually sell their practices.

Unfortunately, the client’s children and grandchildren won’t fare much better, even with the decedent’s millions.  Unbeknownst to them, in all likelihood they are already on their own financial and relational death spiral.

90% of the time, the wealth and solidarity of affluent families are dissipated by the end of the third generation. 

This phenomenon is so universal that it is encapsulated in a similar proverb in nearly every country on earth.  In the US, it is “Shirt sleeves to shirt sleeves in three generations.”  In Holland and Ireland, it is “Clogs to clogs in three generations.”  In China, it is “Rice paddy to rice paddy in three generations.”

As my friend and colleague Courtney Pullen wrote in the Introduction to his brand-new book, Intentional Wealth:

“From shirt sleeves to shirt sleeves in three generations.”  This is an ancient saying about the fleeting nature of wealth, and modern research has confirmed its accuracy.  Approximately 90% of affluent families lose their wealth by the end of the third generation.  The tragedy of this statistic isn’t the loss of the money; it’s the loss of the family that goes with it.  As the wealth dissipates, so does the connective tissue of the family, whose members often end up disconnected and embroiled in conflict.”

       B.  The root cause for both these stark failures is the same: our method of planning.

The cause for failed multigenerational families and failed multigenerational advisory relationships is the traditional planning paradigm, which is founded on a mindset of superiority, secrecy, and control.  It works like this:

When affluent clients set out to create a plan for the perpetuation of their wealth and their values across multiple generations, they typically assume that they and they alone know what’s best for their descendants and they have the right to dictate the rules.  After all, it is their money.  Many are well-intended: they may wish to shelter or protect their descendants from the challenges and complexities of creating these plans.  Regardless of the clients’ motivations, family members most affected by these plans are seldom consulted except in the most superficial ways.

The clients’ old-school professional advisors, locked in the mindset of the traditional planning paradigm, reinforce this patronizing attitude because it plays into their own mindset of superiority and control.  This creates an echo chamber in which clients and advisors hear only what they want to hear. 

And lest anyone slow down the planning in progress or undo it once it is written, the entire process is cloaked in secrecy.  Family member don’t speak to advisors and advisors don’t speak to family members except until the very end when, in the stereotypical “reading of the will” the great plan is finally unveiled. 

By then, the die for the family dynasty is cast.  The surviving family members’ lives for the next several generations have been largely determined without their even being consulted.  As it turns out, the so-called “objects of the client’s bounty” are merely pawns in the process.  The result is the objectification and infantilization of the clients’ children and grandchildren.  The plan—carefully crafted by the client and his advisors—becomes a patronizing, self-fulfilling prophecy. 

It is highly unlikely that those who are thus neutered by being treated by their parents and grandparents as objects and infants will succeed in maintaining and building the family wealth or family relationships beyond their own generation.  Instead, they will — 90% of the time — go to great lengths to resist and eventually dismantle their parents’ planning.

It is highly unlikely the client’s children and grandchildren will feel much affection for their parents’ “co-conspirators,” the professional advisors who devised the plans that now hold them hostage.  Instead, they will — 98% of the time — fire those advisors and hire others more sympathetic to their point of view.

It is no small irony that the planning process itself, the very process that is intended to perpetuate the client’s success and make his advisors indispensable to the heirs, plants the seeds of failure on both counts.

      C.  Two Problems, One Solution:  SunBridge 3-GEN Planning

Einstein defined insanity as continuing to do things as they’ve always been done while expecting a different result.  For those astute enough to recognize that the old paradigm of planning doesn’t work, it’s clear we’ve got to re-think the way we plan.  Fortunately, there is a solution to both these serious problems.  It is a new—but actually age-old—approach to planning called “SunBridge 3-GEN Planning.”

What is SunBridge 3-GEN Planning?

  • In SunBridge 3-GEN Planning, planning isn’t something we do to our family, or even for our family.  It’s something we do with our family.
  •  In SunBridge 3-GEN Planning, planning isn’t a lecture the patriarch delivers to his posterity through a megaphone, it’s a thoughtful and respectful conversation among all of them.
  • In SunBridge 3-GEN Planning we stop treating the clients’ children and grandchildren as mere objects or pawns.  We treat them as real people who have a real stake in this process.
  •  In SunBridge 3-GEN Planning we stop infantilizing the clients’ children and grandchildren in a misguided quest to build a family dynasty by fiat.  After all, why worry about the 7th generation if your family and your wealth aren’t going to survive past the 3rd?  What good is a 100-year plan if your children and grandchildren are falling apart today, and will be tearing each other apart as soon as you’re gone?
  • In SunBridge 3-GEN Planning, three generations come together to create a blueprint for a happy and successful life for everyone, both today and tomorrow.
  • In SunBridge 3-GEN Planning, we bring everyone to the table and discover solutions to the family’s biggest questions.  Then we implement them.
  • In SunBridge 3-GEN Planning, the advisory team assumes the role of educating and mentoring family members and guiding them into a new collaborative model of family dynamics.

D. Why SunBridge 3-GEN Planning Works

The plan that emerges from the SunBridge 3-GEN Planning process is a shared, collaborative plan, built by the family working together with their trusted advisors.  Not everyone gets everything they want, but they get a voice and a place at the table.

Since everyone has a say, everyone buys in and takes ownership.  Everyone takes responsibility for making it work, not only for their generation but for generations to come.  No more “shirtsleeves to shirtsleeves.”

As a SunBridge 3-GEN Planner, you connect with your clients’ children and grandchildren naturally and organically during these planning experiences.  They know you and trust you, so of course they will turn to you for advice and counsel when their parent or grandparent passes on.  Unlike 98% of your peers, you will not lose the business when the patriarch dies.  This will secure the long-term value of your business.

      E.  SunBridge teaches advisors how to become 3-GEN Planners

SunBridge is the national leader in 3-GEN Planning.  Our mission is to guide professional advisors through the process of becoming SunBridge 3-GEN Planners.  We understand what’s required to step up and take charge of one’s professional development.

SunBridge is uniquely qualified to help professional planners and advisors add this exclusive planning methodology to their professional service offering.  Members of the SunBridge Network experience our powerful and time-tested “TRAINING – TOOLS – SUPPORT” approach to equipping professionals for this amazing journey of becoming a SunBridge 3-GEN Planner.

Since 1999, we’ve been showing professional advisors how to address the WHOLENESS of their clients’ wealth, not just their money.  We provide SunBridge Network members with a wide array of resources, including our latest graphic and conceptual image, “The Thriving 3-GEN Family.”  This exclusive proprietary tool will help you, your clients, and your colleagues “get” what 3-GEN Planning is all about.

 It’s our job to help advisors shift their thinking and their perspective to achieve the new mind-set they will need to succeed in this important work.  We help them develop additional capabilities so they will have the new skill-set required to operate effectively in this broader role.  We equip them with a new tool-set to make their work more efficient and profitable.  And we provide them a new support-set so they can make this transformation stick for the long haul.

The process of becoming a SunBridge 3-GEN Planner is a joyful, meaningful journey, perhaps more so than anything else in your prior work experience.  Using “The Thriving 3-GEN Family” planning model, the twin dangers of the loss of family wealth and solidarity within three generations and the loss of the advisor’s business at the death of the client can be effectively addressed and avoided.

      F.  Imagine Yourself as a SunBridge 3-GEN Planner

Can you picture what it would be like to practice this way? See if you can visualize yourself in settings such as these:

As a SunBridge 3-GEN Planner, you teach a teenage grandchild how to conduct a “Priceless Conversation” interview with his or her grandparent, then listen in the wings as it actually happens.  Imagine witnessing a grandchild’s delight in uncovering his grandparent’s stories and a grandparent’s pride in sharing his life’s wisdom.

As a SunBridge 3-GEN Planner, you lead an “Angels & Heroes” activity for the entire multigenerational family.  During the exercise, each person’s honest and authentic value system is discovered, shared, and appreciated.  Imagine the impact of carefully weaving this insight into the family’s 3-GEN plan.

As a SunBridge 3-GEN Planner, you guide a three-generation client family through a real-life philanthropic adventure using the “Main Street Giving Experience.”  This hands-on activity draws the family together and changes the lives of everyone involved.  Imagine them discovering what makes each one come alive and recognizing their power to make a difference in their communities.

As a SunBridge 3-GEN Planner, you facilitate a “Time to Think Council” in which the family’s knottiest issues are artfully and lovingly dissected and resolved, to the amazement and satisfaction of all.  Picture a family learning — perhaps for the first time — how to talk to each other about difficult subjects without it turning into a shouting match.

As a SunBridge 3-GEN Planner, you make sure that a large bequest from a parent or grandparent is not a “Sudden Money” event, because you prepare the children and grandchildren to receive it long in advance.

As a SunBridge 3-GEN Planner, you don’t let your clients make “The Ultimate Gift” mistake of waiting until they’re dead, then counting on others (or their documents, or even a DVD) to fix their family.  As a SunBridge 3-GEN Planner, you understand that “it is better to build a fence at the top of the cliff than it is to station an ambulance at the bottom.” Harold B. Lee

As a SunBridge 3-GEN Planner, you get paid for connecting families and changing lives.  Your work is richly rewarding, in every sense of the word.

      G.   An Invitation

If you’ve always dreamed of practicing this way, or if you can at least imagine yourself working this way with select clients, I invite you to become a member of the SunBridge Network and learn to become a SunBridge 3-GEN Planner. 

Your journey will begin with a free introductory webinar “The Case for 3-GEN Planning” on Wednesday, February 12, 2014, at Noon Eastern.  That will be followed by monthly SunBridge Network training conference calls on the fourth Wednesday at Noon Eastern. 

We are offering two 2-day workshops this spring and summer that will kick your training into high gear:

“The Main Street Giving Experience for Facilitators and Ambassadors,” Thursday and Friday, April 3-4, 2014, in Orlando, Florida

“The SunBridge 3-GEN Planning Retreat,” Thursday and Friday, June 26-27, 2014, in Orlando, Florida.

If you’re ready to step up your game, we’re ready to support you every step of the way.  Don’t you owe it to yourself and to your clients and their families, for generations to come?

For more information contact Scott Farnsworth, 407-593-2386,