Like many senior-level financial advisors, I was always looking for new ways to serve my affluent families beyond managing their money, and managing it well. The affluent families I work with were looking for guidance to help prepare their children for their future inheritance.
Although I was highly motivated to help my clients, I wasn’t sure what to do. That all changed in November 2008 when my partner, Jason Brown, and I attended a workshop on “Passing on Wealth and Values” for founders, heirs and their professional advisors at Pepperdine University in Malibu, California.
(As a side note, we almost didn’t make it to the workshop. That day, California was on fire, literally! We drove through smoke-filled freeways and canyons and almost turned back. When we arrived, the lecture room was filled with families and their advisors (mostly attorneys and tax advisors). Jason and I were the only financial advisors in the room.)
Among the workshop’s speakers was Roy Williams—a former San Francisco 49er tackle who stood 6-feet, 6 inches. He got our attention! After football, Roy went to work in the insurance industry, eventually becoming the top sales person for his company. He shared with us a conversation he had with one of his clients. The client asked, “Roy, you have sold us enough insurance, what am I going to do with my kids?”
It was then that Roy began to look into why 70% of all wealth transfers didn’t survive past three generations. Assets were lost and family unity broke down. Roy shared the findings of his research that involved interviewing more than 2,000 families post-estate transfer and his work with families spanning more than four decades.
What Roy learned was surprising. Family wealth transfer “failures” were not due to poorly drafted estate plans, insufficient tax planning or investment performance. The majority of these “failures” came from within the family itself—lack of trust and communication among family members being the number one reason why wealth transfers fail. Next was lack of prepared heirs followed by lack of a shared family wealth mission.
As a financial advisor, I had spent over 20 years developing what I felt was a superior investment process. In fact, I’ve been frequently asked to share my process with other advisors and I was named in Barron's Top 100 Women Financial Advisors.
Listening to Roy’s presentation, I realized that managing money and managing it well are not enough to meet the current needs of our affluent client families. I had not heard that 70% of all wealth transfers fail in one to three generations. I attended all the industry meetings and no one was talking about this! I asked myself the question, “What good am I really doing as a financial advisor for my clients if the money I am managing will only last through their lifetime?”
After this presentation, I recall telling Jason, “Something has changed here today.” From that point on, I was on a mission to make my clients and other advisors in the financial services industry aware of this new information. Over the next six months, the Institute for Preparing Heirs began to take shape.
Institute for Preparing Heirs foundational thinking is based on the life’s work of our co-founders, Roy Williams and his partner and co-author, Victor Preisser. My role has been instrumental in translating The Williams Group’s foundational work with families for a broader advisor audience through workshops, tools and support available from Institute for Preparing Heirs. Over the past seven years, the Institute for Preparing Heirs has become the financial industry’s top independent generational wealth transfer resource for advisors.
In recent years, we’ve benefited from the guidance, research and thinking of other leaders in their fields. These include family consultants Dr. Robert Kenny and Dr. Karen Weisgerber, who were formerly with Boston College Center on Wealth and Philanthropy; and Dr. Carol Scott, physician, author and preeminent thought-leader in bringing the wealth-health connection to the inheritance conversation.