Practical analysis for investment professionals
15 September 2015

Family Dynamics and the Advisory Process

Family Dynamics and the Advisory Process

An estimated $40 trillion will be handed down from one generation to another over the next 40 years.

This will constitute an enormous challenge to investment advisers and wealth managers, and they need to prepare for this massive transition by working with clients and their families across generations to make the process as seamless as possible.

A central aspect of intergenerational wealth management is navigating often-complicated family relationships. Lisa Gray, founder and managing member of Graymatter Strategies, spoke with Stephan Horan, CFA, CIPM, about the importance of incorporating family dynamics into the advisory process in a Take 15 interview.

“We have found that generational perspectives set up the dynamics of interaction between family members,” Gray says. “There’s so much that goes on before the client actually gets into the adviser’s office that if the adviser is not clued in on what’s happening on this side of the equation, they’re really operating in the dark. It’s like being in a strange city with no GPS system and trying to find your way.”


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One common situation advisers face is when a family sends a member to interview the adviser. “A lot of times the adviser may not even be talking to the right person,” Gray says. “They may not be talking to the right decision maker.”

According to Gray, the larger issue is not knowing about all the family members involved, what their particular concerns are, and the role they play in the client’s life . “If you are not aware of the influences that happen on the decisions that you’re hoping these clients are going to make to do business with you, and to have the opportunity to serve them, then you’re really missing the mark,” she says.

Despite the challenges, Gray believes that working with families today is a rewarding experience. A key component of that is the wave of technological innovation that has made it easier to connect and interact with clients. “The beautiful thing today is that we have technology that . . . frees advisers to have more time to really develop the relationships with their clients, and clients demand that today,” she says.

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

Image credit: ©iStockphoto.com/CSA-Archive

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