Webinar: Aligning Family Health with Family Wealth

David Shaw (00:21):

Welcome everyone, and thank you for attending today’s webinar. I’m David Shaw, the publishing Director of Family Business Magazine. I hope that you and your family are all well and getting ready for summertime. Today we’re gonna discuss aligning your family health with your family wealth. Families invest a lot in protecting their wealth through trusts and estate plans and tax planning and governance and succession strategies, but far less attention is given to the deeper questions. What does wealth mean to us? How is it shaping our relationships, our identity, and our future? Today’s discussion should raise a number of fascinating issues. Before we get started some quick housekeeping details. If you’ve never attended one of our webinars we welcome your questions and especially thoughts and comments throughout. You’ll see the ask a question bar beneath the slide there. Hit that throughout the event and we will get to as many of your questions as we can.

David Shaw (01:25):

Webinar will go for no more than 60 minutes, and please let us know if you’re having any audio or technical difficulties. With that, I am very pleased to introduce our speakers today, Doug Baumoel and Dr. Shay Harris-Pierre from Continuity Family Business Consulting. Doug founded Continuity Family Business Consulting in 2003. His expertise spans family business, family offices and governance. He’s the co-author of Deconstructing Conflict: Understanding Family Business, Shared Wealth and Power; Dr. Shay Harris-Pierre is a clinically trained consultant working at the intersection of family relationships, wealth and identity. With nearly 15 years of clinical training as a marriage and family therapist, she brings expertise in family dynamics to her consulting work. With that, I’d like to welcome Doug and Dr. Shay and I will be back with questions. Doug, over to you.

Doug Baumoel (02:27):

Thank you. Thank you.

Doug Baumoel (02:30):

Does this work? Yes. So thank you David and thank you Debbie and Abby. So we thought we’d start with a bit of perspective of how the Continuity Center for Wealth Integration began. I founded Continuity as David was saying, in 2003, primarily to focus on helping families that work together manage differences and those differences from from simple disagreement through extreme conflict. Over the years, our work began to include family offices and families with generational wealth. Well, these families certainly have conflict from time to time, the conflict was different. Conflict in family business was typically more urgent because the issues that they are dealing with have the urgencies that a business provides. Conflict in these families was a, was a bit different. Those that sought our help had more generalized problems less urgent, no less important. The family members you know, the, the problems we were brought into were due to family members languishing in some way, family relationships, degrading individuals that were not making productive choices or regretful choices.

Doug Baumoel (03:54):

In general, the families that called us in were not happy and they were in pain. So we created the Center to focus on the specific issues that were brought to us by these, by these families. And they were in line with our purpose. And every presentation that we give, we try to include our purpose statement ’cause it’s really a thread that runs through all of our work. And it’s, we believe that every family should be able to enjoy what they have, know where they’re going, and make the most of their lives together. And whether it’s a family with a business, a family that shares significant assets together, or a family with just simply generational wealth, these issues are, are similar. There’s that unifying thread that runs through all of our work, which is depicted in this purpose statement. So, with that, I’ll turn it over to Shay.

Dr. Shay Harris-Pierre (04:49):

Yes, thanks Doug. And thank you to Family Business Magazine for having us. I also wanted to highlight that as a company at Continuity, we see ourselves as problem solvers, and that’s how we approach the field of wealth integration. We describe wealth integration as the process, and that process is defining and actively shaping how wealth influences families. When wealth is poorly integrated, that’s when those problems that we solve arise. And it family being shaped and defined by the wealth that they have. And that can lead to misdirected purpose, languishing relational dysfunction, the things that Doug alluded to. And so our work with families is less about helping those families, though we do help them, but helping those families who are in good shape, who wanna be better and more about working with families who have those problems that need solving, that are the problems that are related to poor wealth integration.

Dr. Shay Harris-Pierre (05:51):

So throughout the time today that we have, we’ll be taking through, taking you through some of our thinking and the frameworks that we’ve developed that we use to help families in the wealth integration process to problem solve some of the challenges that may show up when wealth is poorly integrated. And we’ll do that in the following ways. Here’s our agenda for the day. We’ll speak a little bit more to wealth integration. We’ll also speak to some of our frameworks through the wealth as wellbeing context. We don’t have time to go through all of the forms of capital, but we’ll speak specifically to human and financial capital as those are the most relevant and salient, I think, and more robust that will we’ll get to today. And then we’ll have some time at the end for our final thoughts, a little wrap up and questions for that the audience may have.

Dr. Shay Harris-Pierre (06:46):

So, as I mentioned, we’re problem solvers at heart. As some of you may know, Doug has a background in engineering. So that’s our, our business has been founded with the core of problem solving. And when we think about our wealth integration work, it’s no different. And some of the problems that poorly integrated wealth may create or manifest, they show up at both individual and family systems levels at the individual level. Those problems can show up as a lack of purpose or drive for an individual or a lack of autonomy, a lack of agency, a felt sense of, of that lack of agency and choices over their lives. Or an individual may feel that their wealth is confusing or feel controlled by it, or they may feel entitled by their wealth. And so some of those things on the individual level, excuse me, show up as a result of poorly integrated wealth.

Dr. Shay Harris-Pierre (07:50):

But at the family systems level, some of those challenges may show up as poor communication or no communication and conflicts that show up in the family related to spending or wealth transfer or prenup agreements or wealth disparity that may exist amongst branches within families or even amongst siblings. And then they all may root in that maybe rooted in that lack of aligned family purpose and values. And so through our work and research, we’ve created some frameworks and some insights, and we use those to help guide families through the wealth integration process, which I’ll describe a little bit for you before we get into what those frameworks and insights are. So what we do with families, just as I mentioned, the process of wealth integration or the impact and manifestation of poorly integrated wealth can show up at an individual level as well as at the familial level, the family systems level.

Dr. Shay Harris-Pierre (08:53):

And so we address wealth integration at both the individual level and the family systems level. So we start by helping family members to explore the meaning of wealth for those individuals within the family. And then we explore how that wealth impacts families, relationships, roles, responsibilities, conversations that happen across generations, how is wealth shaping the family system? That’s what that second piece is about. And then finally, in the integration stage, we help the family to identify ways that they can answer concrete questions about family culture, what wealth means for the family, what the structure or what structures need to be in place, and how can those structures be adjusted to account for their new meaning of wealth and what the specific expectations related to financial support and what those conversations can look like within the family. It’s important to note though, that although this is a very insight oriented process, that third phase is developed to help families to create something tangible that helps them to move forward with a very clear picture of how they’re integrating their wealth within their relationships and how they’re making meaning of it. And that can involve alterations to trust documents or building family governance processes or structures that have a tangible impact on the family as they move forward.

Dr. Shay Harris-Pierre (10:24):

So through this process, as we’re working with families, we orient our definition of wealth through the multiple capitals perspective. Many of you may be aware of the concept of wealth as wellbeing and the multiple capitals framework credited to J Hughes. And, but we use these five capitals. We define them as slightly differently than they’re, they’re typically defined. We define them as the questions that you see there on the screen. Human capital we define as the way a family answers the question. Is every member of the family thriving? We’ll get a little bit more into that in second. Spiritual capital is related to whether or not the family is able to let navigate life’s challenges with mutual goodwill. And if the family is able to present as a united front to the world despite differences that may exist within the family. Intellectual capital is related to the family’s ability to retain and build on the knowledge and shared history and shared stories and experiences across generations.

Dr. Shay Harris-Pierre (11:30):

And whether or not each member of the family has the knowledge that they need for their personal and professional development. Social capital, we describe as the family’s ability to leverage its strengths and resources to have the desired impact in the communities that they want. And if that benefit is if it benefits their own individual development as well. And then finally, financial capital. We define as whether or not a family’s wealth confuses, entitles, controls or empowers family members. And again, we’ll speak a little bit more to that later. And whether or not wealth is deployed effectively to build the other capitals, as was mentioned before, financial capital. There are so many structures that can be put in place that make sure that financial capital, financial assets grow and are sustained and are protected. But we approach financial capital through the lens of making sure that financial capital doesn’t just serve itself, but that it serves the other forms of capital in a family as well.

Dr. Shay Harris-Pierre (12:39):

And so when we talk about human capital, the question is every member of the family thriving comes up. And we’ll get a bit deeper into how we, the frameworks that we’ve created around this. But we believe that for every member of the family to thrive, they need to find meaning in life. And that requires an individual to be able to robustly answer the question or the questions, who am I identity? Right? Why do I do what I do? Do they have purpose and do I matter? And to whom do I matter? And so to be able to answer those questions as I, as I alluded to, an individual needs a healthy sense of identity, purpose, and mattering. And each of these things need to be self-authored. You can’t when a person has a, an ascribed or a prescribed identity that threatens their ability to find find meaning in life. And so we wanna make sure in our work that we help families and we help individuals within families to thrive through finding that meaning.

Doug Baumoel (13:46):

Okay. And so, like a lot of things we do, we created a framework, and the framework helps us have these conversations with the family members that we, we work with. The first component of making meaning this is called our meaning making framework. The first component is of course, identity. And we ask the question, does each family member truly know who they are, not defined by money, not defined by others’, expectations of them? That’s a pretty complex set of questions that good facilitation can help instigate really interesting conversation. And and results. Knowing who you are is probably is the foundation of everything else we’re gonna be talking about. The second component is purpose. Purpose is sort of what you do with your life. And again, not what you’re told to do, what you’re meant to do. And again, that is not as easy as it sounds.

Doug Baumoel (14:58):

And we have certain approaches, additional frameworks and insights to bring to the table to have these discussions with rising gen, even with wealth creators to better articulate true underlying purpose which is this second component. Third component as Dr. Shay was was talking about was mattering. Mattering is figuring out who, who is your tribe? Most people see their tribe as their family. Who is your community? Which is a bit broader? Do you matter to them? Do they matter to you? How is that exposed? And this, you know, one of the things we’re gonna be talking about in a future slide, this can actually be fraught. And this is often at the core of some of the problems that families come to us with. There was a wonderful dissertation from Joanie Bronfman for her doctor’s thesis that talked about how in her early childhood, she was a little confused.

Doug Baumoel (16:14):

Was her mother her mother, or was it the nanny? And to be honest, we’ve had a couple of clients where that has been part of the rising gens formative experience. They grew up because families are so busy, families high net worth families are so busy. And we’re gonna talk about why that is the case, that it’s not uncommon that that children get lost in the shuffle. So we’re gonna talk a lot about that in a couple of slides. But this is, sorry. Yeah. This is really where it gets, I think where it gets more interesting. When you connect your identity to your purpose, you find the drive to accomplish. And that’s a really interesting conversation with rising gen that are trying to figure this out. So, identity, and we’ll talk about this again in another slide or two, identity is really the foundation on which is all, all this is built, built. And when you find that purpose that connects what you do to truly who you are, you get that drive to accomplish, oh, I keep pressing the wrong advance button. When your purpose matters to those in your tribe and in your community, you have impact from what you do.

Doug Baumoel (17:42):

And again, I keep hitting the wrong buttons. And when you matter to yourself, that’s when you develop self-worth. And these are things that seem natural, but in families of wealth, families that are so busy families that the message, the messaging for during formative years about what you should be doing, what your, what your legacy is, what your responsibilities are, can be very distracting to forming true identity, self-authored identity, and finding true purpose what you’re meant to do, not what you’re being told to do. So wealth integration is disrupted when one or more of these components are lacking or prescribed rather than self-authored. And those are the conversations that we have in our work with, with these families. Again, hit the right button. And together, when all of these things are in place, that’s where meaning is found.

Doug Baumoel (19:01):

Okay a couple of words about purpose and identity. They’re, they’re very they seem intangible, but we’re trying to make them a little bit more tangible through the conversations that we have. Identity is a foundation on which purpose is built. And I, I wanna also say some of this is derived from my conversations with Anthony Burrow at Cornell who writes a lot, he has several books out on purpose and identity. And so in his frameworks, what comes through clearly is that identity is the foundation on which purpose is built. And it’s best to understand identity looking backwards in time.

Doug Baumoel (19:48):

Your history, the choices you make, not only the things that you choose, but what you choose not to do. The roads bypassed, the roads taken, those all define who you are. Those define your identity. So clarity on the identity conversation, more about looking backwards. Clarity on purpose is more about looking forward, what you do, what you intend to do, and, you know, finding purpose, having having effective results-oriented conversations about finding purpose is crucial. So there are three common ways of finding purpose, overcoming challenges in formative years. So in my family, we have a health challenge of epilepsy and one of our family members became a neurologist in order to address those challenges growing up. And we hear many stories from many successful people and those that are, you know, on the right path regarding if they’re successful or not yet about, you know, what is driving them to in their purpose.

Doug Baumoel (20:57):

And often it’s finding something that in their formative years inspired them to spend a lifetime in that purpose, in that endeavor. Finding an inspiring role model. Again, I’ll be personal. My role model growing up was my father. And he inspired me, his entrepreneurial story. It was the story I grew up with, and that informed a lot of what I’ve done in, in my life or the natural evolution of what just interests you. And again, I’ll make it personal. My son loved Legos and taking stuff apart, and he is an engineer now. Kind of makes sense. Straight line right through it.

Dr. Shay Harris-Pierre (21:43):

I’ll also add just briefly on that note that there are these three ways that purpose can be attained or found. But they’re not mutually exclusive. There may be an a story or a, a person’s life and purpose may be found through all three of these ways, all three of these avenues. So that’s just a, a little piece that I wanted to add as well.

Doug Baumoel (22:14):

Sure. Oh, sorry. You advanced the slide and I did it. Oh, I’m gonna take my hands off. I’m driving here, . Hold on.

Dr. Shay Harris-Pierre (22:26):

Okay, here we go.

Doug Baumoel (22:27):

So we’ve another, another sort of branch of science that, that informs the conversations we have with families in the frameworks that we create is the study of anthropology. And so we’ve studied the anthropology of wealth over the course of human evolution, and here are some of our takeaways. We have this fundamental belief that to some extent we’re prisoners of our DNA. For over 90% of human evolution, every member of the tribe was essential to that tribe’s survival and health or wellbeing. Each family, each tribal member, each family member mattered without question. And purpose was clear and it was self-evident generational accumulated wealth changes that the individual is not necessary, maybe not necessary for the family survival. And the, and this ability to accumulate and store wealth has read has led to the arrival of what has been called in the literature.

Doug Baumoel (23:45):

The leisure class. Today we refer to the leisure classes, ultra high net worth families. The interesting thing here is that the leisure class was defined by the ability to be freed up from labor, freedom from labor defined in, in the past the leisure class. And I mentioned this before in another slide. Today, it’s very, very different. Today, the leisure class or high net worth families are characterized by being very, very busy. It’s no longer that the, that wealth that inherited wealth is accepted as a matter of fact. There’s an expectation that people earn their wealth. And that’s very different from leisure classes. Historically, and, and again, the characteristic of affluent society is that they are very busy, very involved. And that, and just filling the void of being busy is just not satisfying. And one of the things that we hear from the families that we work with, yes, philanthropy is, is great, but for some it doesn’t connect with their purpose.

Doug Baumoel (25:12):

And they’re being told it should. For some they feel, they feel this drive or this, this need to recreate the experience of the wealth creator in their line. This drive to prove that they belong in the, in the affluent society because of how it’s been redefined over, over time. Those pressures, those pressures on identity and purpose and the complications in mattering, make finding meaning very difficult. And those are the families that that are struggling with those, at least in certain individuals within the family. That’s what a lot of our thinking is designed to address.

Dr. Shay Harris-Pierre (26:06):

And not only is it difficult to find that purpose when when there’s such a a pressure as you were mentioning Doug, there may be this idea that maybe philanthropy for some is just like a, the way to find purpose. And it brings to mind the concept of self-actualization through Abraham Maslow’s work. And, you know, something that we believe is that there’s this idea that self-actualization is this kind of finish line attainable thing. It’s a, a goal that could be achieved in one’s lifetime, but self-actualization in itself is just living up to one’s fullest potential. And rather than a finish line or, you know, purpose being this kind of concrete thing that you attain, it’s a process not necessarily a goal. And the satisfaction that you, you as individuals you create or that you get lives in becoming like in it lives in the becoming or the working toward rather than the achieving of the self-actualization. So I just wanted to add that little piece in there as well.

Doug Baumoel (27:28):

Yeah. Right. And we talked about this a lot before we created the the slideshow. And we actually omitted a slide ’cause we didn’t think we’d have time for it, . But this is a core point. Mm-Hmm . You know, this idea that, that we’re all driving towards self-actualization creates this unattainable standard. You know, no matter, yes, we all have these flashes of, of acknowledgement and achievement that feels self-actualizing. Those happen to, for hopefully all of us at some point in our lives. But we have, you know, we, we could never actually self, self-actualize on all of what we are capable of. You know, if I would self-actualize, I’d also be a great jazz player. Well, there’s not enough time in a day. If I had a second lifetime, maybe that’s what I would do. So am I self-actualizing? ’cause There’s a dozen things that I would really like to be great at and to self-actualize. So we have to make choices. And this false promise of achieving self-actualization is actually very debilitating. So anyway, that’s, that’s the point there.

Dr. Shay Harris-Pierre (28:40):

Yeah, absolutely. And so a theme that has a through line of everything that we’ve said so far is the idea that the lacking of autonomy in finding one’s purpose or integrating wealth well making meaning in one’s life that can do more harm than good when it comes to wealth integration. The lack of autonomy, though, I want to kind of zoom out a little bit and, and address how that lack of autonomy can be experienced at a larger scale, kind of at more of a macro level for families. When it comes to wealth in itself. We may be familiar with the phrase that wealth is a magnifier, and it does come with a lot of weight, so much so that it may have its own sort of gravitational pull. The analogy that we use is that wealth is kind of like the ocean in which our families exist, the water in which they exist and that water has its own, you know, riptides and or, you know, currents and the water flows the way that it flows.

Dr. Shay Harris-Pierre (29:49):

And wealth integration in itself is important for families because it’s easy to exist in this body of water and let the tide take you in the direction that it wants you to go. But if you’re able to properly and healthily integrate your wealth, you can set the tone and begin navigating those waters intentionally. And the process of wealth integration, we liken it to swim class, is the action or the process of helping individuals and families to gain the awareness and the knowledge and the skills to be able to navigate wealth intentionally and purposefully so that the wealth doesn’t define the family, rather the family defines where they want to go and what their direction is in the context of wealth.

Doug Baumoel (30:45):

Yep.

Doug Baumoel (30:48):

Okay. I think I’m driving. Yep. Okay. So those are some of our insights on the human capital bucket of the multiple capitals framework. There were additional insights. We kept it to just a few just so that we can give you a, a sampling. We’re gonna also give you a sampling of some of the core insights and frameworks that we talk about in the financial capital bucket. And the question that is answered by our work is, does family wealth confuse entitled control or empower family members? And is it deployed effectively to build the other four capitals? That’s the overarching approach. Now, this, some of you may recognize, we published an article about this several years ago in the international Family Office Journal. And we can make that available to you on, on request, but it has been a powerful framework that we’ve used with many, many families, and it goes like this.

Doug Baumoel (32:08):

We created this framework years ago when we were asked to address the question, what should we tell the kids about our wealth? And when should we tell them? In other words, how do we communicate about family wealth to our kids? And we created this framework that on the X axis, the horizontal axis, we talk about the rate of wealth transfer. And that’s the way we use it. It’s a little complex. A low rate of wealth transfer is either a low amount of actual wealth transfer and versus a high amount, but it’s also about the sporadic gifting. So you might give a tranche of wealth to a kid once in a to a, to a to a rising gen. You might give a tranche that is significant once in a while, and that may be considered a low amount of wealth transfer versus smaller amounts given repeatedly over time.

Doug Baumoel (33:15):

That might be considered a high level of wealth transfer. So it’s a little complicated. The, it combines both the sporadic nature of the gifting and the value of the gifting on the vertical axis, the Y axis, it’s the communication associated with each transfer. So no matter if it’s a small amount given regularly, a large amount in one tranche, what is the communication that is coupled with that transfer? And what we did in this, in this framework is identify four archetypes of gifting or transferring. The first where you have a low level or low rate of wealth transfer. And again, that could be a big tranche, very infrequently, or just little bits on and on. With low communication, a child gets a gift that maybe it’s, you don’t have to worry about your college education, it’s paid for or down payment on a house, but, or distribution of income from a family enterprise of some sort. But if there’s no communication about it or low communication, meaning the, the recipient of that gift does not understand that it’s part of a larger corpus of wealth or, and what that corpus is, they don’t understand if that’s gonna be repeated. They don’t understand because they haven’t been told how that fits into the family’s story of wealth and future. With wealth, basically, it keeps them guessing. It doesn’t allow them to plan their financial future. So that architect, that archetype, the keep him guessing archetype can be problematic.

Doug Baumoel (35:14):

Likewise, if there’s sporadic or low wealth transfer with a lot of messaging to it, and I’ll give you an example. We had a client that would give their rising gen, the grandparent actually would gift the grandkids for a house, right? And the messaging was pretty strong. This is for a down payment on your house, it has to be in this neighborhood. And by the way, I don’t want you to put in an in-law apartment because I don’t like your in-laws. So that’s an example. Absurd but true. That’s an example of a high communication with a low amount or limited amount of wealth transfer that serves to control, that uses wealth to control a a family member. Another example, we had one family we worked with that provided education for the rising Gen, for the kids of the rising gen.

Doug Baumoel (36:22):

But the education had to be for these very specific schools and only these specific schools and only these courses of study, et cetera. And that creates problems. The big worry for most families is that a high rate of wealth transfer will serve to entitle the rising gen. And without a, without sufficient communication about the, how the wealth was created how much there is, what you can expect over your lifetime, without good communication, it can be entitling. And what we strive for is this fourth archetype, which is to empower rising gen with wealth to couple substantial wealth transfer strategies with high levels of communication about the wealth that, that they’re going to receive so that they’re informed, knowledgeable, in control, educated about the wealth, et cetera. So by creating these four archetypes, we can set forth a, a goal that’s very useful for families in making this decision of what do we tell our kids, when do we tell, and how much do we tell our kids about family wealth? If we can change the conversation from being concerned about entitlement, to wanting to empower and wanting to also avoid controlling and confusing kids about wealth conversations and strategies can be developed to do that.

Dr. Shay Harris-Pierre (38:11):

I’ll also add real briefly that it, as you can see on this diagram, that the, the difference between entitlement and empowerment is the level of communication. And so the wealth integration process helps families to understand not only how to communicate about their wealth, but what to communicate. What are some of those stories? What are the, what is the history of the wealth? And what is the family’s shared vision for the purpose of the wealth? How is the family navigating? What direction is the family, you know, swimming in, to go back to the the previous metaphor, what direction is the family going? And that when families are clear on those things, it makes communication about wealth transfer and wealth in itself easier and helps to facilitate that empowerment of the rising gen. Yeah.

Doug Baumoel (39:07):

This is another framework that we bring to families in my clicking. Is it clicking? Yes. This is an interesting framework. We get a lot of feedback on this. So we thought we’d include this in, in today’s talk. This is about raising children in, in abundance, raising children in affluence. And we start by looking at middle class families. Most families, middle class families, when children are young, they live lives that are very interdependent. So in a typical middle class family, kids share a bedroom, they certainly share a bathroom. When they go to school, they go to their neighborhood school, and therefore their friends generally come from the neighborhood. And they have mixed groups of friends growing up. When they wanna go to a camp, they go to the family’s summer camp that maybe their cousins also go to. They live in communications probably closer to their extended family, to cousins, aunts and uncles.

Doug Baumoel (40:15):

When they are old enough to get a car, they have to share the car. The older brother or sister needs to carpool with the younger, et cetera. And if two are driving at the same time, they each get to, they, they have to share a car. And when they get older, when they leave the house, they can’t wait to get away from each other. They wanna live lives that are truly independent, but they’ve built these skills of knowing how to fight, how to heal, how to share because they’ve had to all their lives. Contrast this with, with what happens in more affluent families, it’s the exact opposite.

Doug Baumoel (41:00):

Children grow up very independent. They live in, they, they typically have their own bathrooms. They, they certainly have their own rooms. When they go to school, if one is really good at STEM, they might go to a boarding school or, or a private school that focuses on STEM. Another child is more interested in theater or art, they go to a different school. Their friends groups may be vastly different. When they go to summer camp, the child that’s great at tennis or interested in, in sailing, they go to those camps. The child that’s interested in horseback riding or art might go to a different camp. When they are old enough to get cars, they get their own cars. And I’m not saying that this is true for every affluent family, this is just the general, general trend that kids grow up more independent in affluent households than they do in middle class families.

Doug Baumoel (42:05):

Now, what happens with, with these kids when they grow up, they find that they’re co-beneficiaries or co-trustees in a foundation or have to work together in a family business. They find that their future together is very interdependent, and they have not built the muscle of sharing, fighting, and healing, communicating that their counterparts in middle class families more likely have. They grow up not knowing each other as well. And if you’ve seen our, our webinar on the Family Factor in building trust, knowing each other well is the cornerstone of building trust, so that there’s a degree of predictability in those relationships. So we get called in by these, by affluent families, families, both in the business side and with generational wealth that are suffering from these problems of, of growing up very independently and not having built that muscle that now they need to learn. And that’s, that’s what part of this wealth integration process teaches.

Doug Baumoel (43:24):

Let me give you a quick story if we have time. Yeah. We have a little time. I gave this presentation years ago to a group called the CCC Alliance. And I got a, an email several months later from somebody who saw the presentation and wrote me that and this CCC Alliance is a collection of family office leaders, family members in a family office. And this woman emailed me saying that after this presentation, she shut down a wing of her house. It was a large house, and she moved her kids into bunk beds. They were two and four, I believe at the time. And she’s downstairs in the kitchen listening to them, to them fight, make up, share together, play together. And she wrote me to say, my God, it changed everything in, in her family. So just wanted to add that story. So final thoughts and then we’ll take some questions. Shay I think this is your slide.

Dr. Shay Harris-Pierre (44:26):

Yeah, sure. So at the core of all of what we’ve been sharing today kind of as the foundation, our premise is that, as advisors, we need to shift the focus from wealth preservation for the sake of preserving wealth, just for the sake of it to wealth deployment for the sake of family preservation. Preserving wealth it implies passivity. It’s passive. It can cause the family to let the wealth define them, and being taken by that tide. To go back to that metaphor again because I love it , but it allows the family to kind of passively interact with wealth and be directed and guided by the wealth, rather than taking an active approach and deploying their wealth, specifically with an intentional purpose of preserving the family in itself. And so, well go ahead.

Doug Baumoel (45:31):

Yeah. It prioritizes the family over the wealth, which is what needs to happen. And you know, part of deploying wealth for family preservation is deploying wealth for future generations. So there is a mm-hmm . An investment aspect to wealth deployment, but it’s not the primary purpose, the primary purpose—and we think this, this is a reframing that needs to happen in the, in the entire industry—um of what’s called the wealth preservation industry. It really should be focused on you have wealth, you need to be actively thinking about what you’re going to do with it to preserve your family and to, to do all the things we talked about in human capital and all the things we can share in social, spiritual, and intellectual capital. It’s about deployment, less about preservation.

Dr. Shay Harris-Pierre (46:33):

Absolutely. And deployment is possible when wealth is integrated well. When the family is able to not only swim in their, the, the, the direction that they wanna go, but maybe even change the direction or change the course, change the tide of the wealth that they have letting the wealth serve the family rather than the family serving the wealth.

Doug Baumoel (46:58):

And I thought we’d end with this. This you’ve probably all heard this sort of proverb or saying. There’s no such thing as bad weather, just inappropriate clothing. And we apply that to, to wealth to money. Money isn’t bad. And we all know the work that’s being done in Wealth 3.0 reframing a more positive approach to wealth and money. And the analogy to this quote is that with good preparation and good wealth integration there’s no such thing as bad wealth. So that’s what we have for you today. And now I’d love to take some questions.

David Shaw (47:53):

Indeed, indeed. So first of all, let me there were some questions that are in of the nature of how this all works. There will be a copy of the recording of this webinar available on the family business website, as well as we make the video available to Doug and Dr. Shay as well. The webinar that Doug was referring to can also be found on the Family Business Magazine website. So please do go look there and, you know, you can kind of see the thinking that Continuity has worked around conflict and so on throughout several of the webinars that we have that have featured Doug. So I did wanna note those two things. Mm-Hmm . A question here. You know, you’re doing reframing a lot here, and this question came in, I can see this process resonating with the rising gens and and that they might be an easier group to approach with this framework as well. But what about the leading gen? How do you start a conversation and ask these types of questions that you were asking to say a 70-year-old patriarch?

Doug Baumoel (49:02):

So the, we see a bias sample of families. We see families that are experiencing some sort of pain, families that have differences, they need help negotiating or, or addressing. So you mentioned the 70-year-old person. Wealth Integration for that person, looks like transition. They’re probably in a position of leadership. If they’re the wealth creator or the leader of the family enterprise, family office. Changing one’s identity from that person in charge to a different identity, figuring out who you’re going to be when you’re no longer that person is core to the work we do on I on identity. Shay, can you add to that?

Dr. Shay Harris-Pierre (50:00):

Yeah. I’ll also add that, you know, for leading gen members, the, as I mentioned before, we’re problem solvers. And when we do a lot of our wealth integration work, it’s specifically in relation to some problems that have shown up within the family system, be it stalled decision making challenging relationships across generations and things like that. And so these conversations are very widely accepted or very readily accepted through the lens of, “Hey, we’ve identified this problem and this problem is a, is a result of poorly integrated wealth, here are some ways, some conversations that we can have to develop or alter what your idea of your identity is so that we can move toward a solution to the problem at hand.”

Doug Baumoel (50:54):

And the core of that is, is the meaning making line that runs through all of our work. How can families find meaning in some of these transitions that feel very fraught? Very likely to induce conflicts. You have to choose who the next leader is going to be. You have to transition control and ownership at some point. These decisions are fraught, and that’s why the work we do is also coupled with our DNA and in conflict management. ’cause The two go hand in hand.

Dr. Shay Harris-Pierre (51:36):

They do.

David Shaw (51:37):

So this question came in, how does this framework, you, you talked about independence and interdependence. How does that work in countries where the need for personal security is high and social class differentiation is also very high? How, how do you recommend we hold these conversations in countries like that?

Doug Baumoel (51:59):

I will first admit to having a western bias. Okay.

David Shaw (52:04):

This, I believe is Latin American.

Doug Baumoel (52:06):

Yeah. Yes, yes.

Dr. Shay Harris-Pierre (52:09):

Individualist bias.

Doug Baumoel (52:12):

Yes, we have an individualist bias. Yes. other cultures, we need to, and we typically do this, I do this in Asia recently. We need to know what we know and what we don’t know. And at Continuity, you know, I have no no shaming thing. We’re a United States-based company primarily. We have worked outside the United States quite a bit, but the frameworks that we’ve developed come from our experience and what we’ve learned from the families that we’ve worked, which, which is 90% U.S. Families, not exclusively, but 90%. That doesn’t mean that these frameworks are solely applicable to these families. But what it does mean is that we need to work carefully and typically with local advisors to purposefully adapt these frameworks to be useful for those families. And, and the person who asks a question makes a great point. Mm-Hmm . You don’t have to worry about running around with bodyguards here and in other cultures you do. And that changes how some of these frameworks and insights will be adapted for those cultures, those families.

Dr. Shay Harris-Pierre (53:33):

And even the concept of purpose and identity and mattering. All of those things mean one thing in an individualist culture like western cultures and can mean a completely different thing in more collectivist cultures or more honor cultures across the globe.

Doug Baumoel (53:52):

We did a webinar, you, we mentioned it before on family factor. We have a definition for the family factor. I, I did some work with another advisor, not a Continuity advisor, one of our collaborators over in Asia where we had a lot of conversation of what does the family factor actually need? How does the family factor need to adjust in order to be more meaningful to Asian families? And so we did actually change some of the wording.

David Shaw (54:31):

Well, the questioner who asked that question also just wrote and said, thank you for your honesty and, and the, I guess the limitations of or where your, your perspectives are. So yeah, an important, an important area you’ve been talking about that, that kind of, the glue that, that is the through line of, of your sort of, interestingly different three circles, model . So yeah. Can you kind of talk just briefly about the spiritual and social capital elements of these? I know you don’t have slides related to that.

Doug Baumoel (55:06):

Yeah. we actually did, we, we took them out because we didn’t have time to break them . But I’ll, I’ll talk a little bit about spiritual capital and one of our team members is really the expert on this, and that’s Chris Koenneman and maybe we’ll do a, a spiritual capital presentation webinar with, with Chris. I guess the way we see spiritual capital that’s different is that we define a lot of the spiritual capital elements as the family factor. Does the family show up as a united front to the world with good, with you know, with well-being for all and good communication, et cetera. So we see that the conversation around spiritual capital is very tightly tied to the, our idea of family factor. And, and for many families, the glue that that is, is the glue or is what they leverage to build a strong family factor is faith. So faith viewed from the lens of the family factor can actually be a very powerful component. And a, and an interesting way to talk about the, the implications of faith on family as they build spiritual capital and social capital. It, it’s a, you know, I guess I’ll, I’ll keep going, but social capital is the way we think about it.

Doug Baumoel (56:59):

It’s how the family aligns their purpose and their impact in their communities primarily. And that, that hearkens back to the, that meaning making Venn diagram of having impact and what is the right kind of impact. And we help families have those conversations. Yeah. And intellectual capital, you know, we have a similar adaptation or overlay to, to that meaning making circle.

Dr. Shay Harris-Pierre (57:30):

Excellent.

David Shaw (57:32):

Okay. Well, we’re coming toward the top of the hour, so I’d like, if you could any last thoughts or comments?

Doug Baumoel (57:40):

I’ll let Shay go first.

Dr. Shay Harris-Pierre (57:42):

. Well, I’m very grateful for this time. And if there’s any takeaway that the audience has, I hope that the the water analogy sticks and that families or advisors see wealth as something that families can take us, take a level of autonomy with and navigate intentionally and not be drawn by or directed by wealth and in itself, but rather take the reins and direct their purpose and their direction as a family within the context of wealth.

Doug Baumoel (58:21):

Yeah. And for me I, I think there’s a lot of pressure that rising gen certainly has wealth takes away a lot of a lot of excuses and people are held to impossible standards. And yeah it’s not as simple as that. And so our work is, is I think needed and necessary and very useful for, for families that are struggling.

David Shaw (59:01):

Yeah. Well, I found this very valuable. I wanted to just say thank you to Dr. Shay and to Doug and I hope you’ll all join us in the future for other webinars with. We are coming to the end here. So I did wanna note that if you’re working on issues related to these kinds of discussions, join us at Align in September. That’s our family office conference. That really works on making sure that the family and the family office are aligned for questions that we didn’t get to, including that very complicated question that arrived at the very last minute. Dr. Shay will see that and they’ll be able to answer that. Thank you for the great positive comments that are all coming in right now. Thank you, Doug. Thank you, Dr. Shay, and we’ll see you all at the next webinar.