The Northern Trust Experience

Transcription

1 The Norther Trust Experiece ACCESS. EXPERTISE. SERVICE. Keepig It Together: Helpig the Family Stay Effective i Ucertai Times November 5, 2010 A Freel Director, Family Educatio ad Goverace Services 2010 Norther Trust Corporatio orthertrust.com

2 2 The Norther Trust Experiece Our Time Today What Happes The Realities of Chage ad Ucertaity for Wealthy Families What You Ca Do How to Help Cliets Navigate Chage Effectively Together

3 3 The Norther Trust Experiece Our Families Iheritace: What s Differet Today Society The Next Geeratio* Family Wealth Chagig job security ad career paths The Milleials / Geeratio Y : bor late 70s early 90s A cofused market, lower short-term returs, tight credit markets Ecoomic ad cultural trasitios: Globalizatio, emergig ecoomies, ed of the America Cetury Largest geeratio after Boomers (their parets) Decreased liquidity for may assets New defiitios of family life Diverse 38% idetify as o-white Family assets may be used to meet immediate eeds Iformatio access, scope, speed Grew up i the Decade of the Child Icreasigly taxable eviromet at federal ad state levels Techological impacts o huma relatioships Chagig health, healthcare, ad life spa expectatios Defiig evets: Columbie, 9/11, corporate scadals, ecoomic meltdow Strog o collaboratio, selfcofidece; seek ope coversatio, recogitio, respect, ad to make a differece Societal split persoality regardig wealth Privacy of fiacial iformatio o loger exists the way it used to * Adapted from Deloitte Cosultig Group research

4 4 The Norther Trust Experiece Multi-Geeratioal Wealth: Chage + Ucertaity = Complexity Multigeeratioal Fiacial Assets G1 G2 G3 Geerate wealth Co-maage wealth Co-maage wealth Co-maage wealth Co-maage wealth Co-maage wealth ad so o, ad so o (or ot?)

5 5 The Norther Trust Experiece The Family: Chage ad Costacy Life s oly costat vs. Dyamic chage (atural progressios + trasitio poits)

6 6 The Norther Trust Experiece How Chage Affects Us: Behavior

7 7 The Norther Trust Experiece How Chage Affects Us: Emotios Positive As we progress through the chage cycle Uiformed Optimism ( hoeymoo period ) Completio Iformed Optimism Mood Time Negative Iformed Pessimism

8 8 The Norther Trust Experiece How Chage Affects Us: Family Dyamics cotributig Followers Complete what is said Support what is happeig Iitiators Start chage passive active Bystaders Provide perspective o what is happeig Opposers Challege what is happeig balacig Source: Acoa ad Isaacs All are valuable ad importat to the chage process

9 9 The Norther Trust Experiece Family Effectiveess i the Midst of Chage ad Ucertaity Reactivity vs. Proactivity Opportuities to adapt or perish Who moved my cheese? Law of uaticipated cosequeces Is there a better way? Positive practices for multigeeratioal fiacial families Plaig from the iside out Powerig plas with o-fiacial family wealth Aticipatig ad plaig for chage ot i spite of it

10 10 The Norther Trust Experiece What Makes a Differece: Family Wealth, Redefied * Huma Capital The "Persoal" Who are we? Why do we stay together? Relatioships Iterpersoal Dyamics Itellectual Capital The "Professioal" What do we kow ad what ca we do? Kowledge Skills Experiece/Expertise Life Skills Attitudes Social Capital The "Public" How do we ifluece the world outside our doors? Networks Ifluece Philathropy Marketable Securities Alterative Assets Real Estate Govermet Markets Fiacial Capital The "Pockets" How do we maage our fiacial wealth? Commodities Busiess Vetures Artwork, Collectios * Adapted ad exteded from the works of Collier ad Hughes

11 11 The Norther Trust Experiece Legacy Plaig (From the Iside Out ) Maage chage ad ucertaity effectively by focusig o the ceter Social Capital Huma Capital Itellectual Capital Fiacial Capital

12 12 The Norther Trust Experiece Legacy Plaig (From the Iside Out ) How do the plas that you create for cliets leverage ad support the family s o-fiacial wealth? Huma Relatioships Shared Values Shared Purpose Itellectual Social Family Educatio Leadership Developmet Decisio-Makig & Goverace Systems Philathropy Etrepreeurism Networks ad Ifluece

13 13 The Norther Trust Experiece Implicatios for Advisors: Supportig Effective Behavior Help them feel heard Liste ad reflect back ad look for relaxatio respose Cosider commuicatio prefereces Normalize their experiece Create a family developmet pla to parallel wealth plas Based o specific elemets of wealth plas Cocrete, how I will do it actio steps - I will do X, the Y Address if/the situatios (sceario plaig) Whe emotios are high, focus o what rather tha why questios Advice vs. therapy

14 14 The Norther Trust Experiece Implicatios for Advisors: Supportig Effective Behavior What we believe iflueces how we behave Problematic behaviors are ofte based o iaccurate ifereces, ot facts Commuicatio strategy: Help cliets move dow the ladder of iferece Share your data ad decisio processes Ask cliets about theirs

15 15 The Norther Trust Experiece Implicatios for Advisors: Supportig Emotioal Itelligece Model calm curiosity Aticipate each phase ad schedule extra support (especially for Iformed Pessimism phase) Paradoxical thikig Resiliece Recogizig, helpig them maage emotioal resposes Idetify family members motivatig fears ad desires Ier/itrisic Exteral/group Traditio

16 16 The Norther Trust Experiece How to be a Ati-Emotioal Coach "I ca really remove the emotio from the decisio-makig process. It ca help [the cliet] break dow decisios to their core, ad ot be swayed by the emotio obviously attached." Katie Nixo, Norther Trust, i the Wall Street Joural

17 17 The Norther Trust Experiece Implicatios for Advisors: Supportig Family Effectiveess Help cliets recogize ad balace all four roles durig wealth plaig Iitiator, follower, bystader, opposer Clarify shared values ad priciples the family agrees to use as touchstoes Model iclusio i the plaig process Who have you shared with? Who else should we share with? Create what if plas to address cocers about sharig e.g., phased disclosure Observe ad as eeded, reframe cliet ifereces

18 18 The Norther Trust Experiece Implicatios for Advisors: Supportig Family Effectiveess Help cliets embrace costructive failure Build pre-iheritace experieces How much will help them lear ad still allow you to sleep at ight? Several experieces make the differece Debriefig ad revisig plas matters most Rewards ad recogitio Right directio, ot just results Family stories Perseverace Resiliece Creativity

19 19 The Norther Trust Experiece Implicatios for Advisors: Supportig Family Effectiveess Documet the huma side of family wealth trasfer Regular reviews ad updates Review together whe possible Discuss family defiitios of terms/phrases Sceario discussios Supplemet legally bidig documets with isight documets Share isight documets whe they are writte Before they are placed Revise, refresh, share agai over time

20 20 The Norther Trust Experiece Closig Thoughts If you wat 1 year of prosperity, grow grai. If you wat 10 years of prosperity, grow trees. If you wat 100 years of prosperity, grow people. - Chiese Proverb

21 21 The Norther Trust Experiece Closig Thoughts

22 The Norther Trust Experiece ACCESS. EXPERTISE. SERVICE. Thak You. November 5, 2010 A Freel Director, Family Educatio ad Goverace Services 2010 Norther Trust Corporatio orthertrust.com

23 23 The Norther Trust Experiece Value Propositio: Family Educatio ad Goverace Services Our Visio The future we wat to achieve Cliet families who are able to leverage their wealth to develop ad grow, so that they are better able to reach their goals ad perpetuate their family s well-beig through multiple geeratios.

24 24 The Norther Trust Experiece Value Propositio: Family Educatio ad Goverace Services Our Missio What we do to make our visio real Norther Trust helps our cliets lear to maage ad itegrate their wealth ito their lives i ways that are iformed, itetioal, effective, ad persoally meaigful. We do this by providig a suite of relevat, iterestig, ad useful cliet resources buildig our parters capacities as educators Sharig our kowledge ad isights with fellow trusted advisors

25 25 The Norther Trust Experiece Family Educatio ad Goverace Services: Our Offerig Help your most precious assets your family members grow ad flourish i wealth. Develop the Huma Side of Your Family s Wealth Capture ad share the family s history across the geeratios Clarify, commuicate ad activate the family s shared values WHY NORTHERN TRUST? Exclusive cliet evets that brig practical, leadig-edge advice to the real situatios families face Learig experieces that build fiacial literacy while stregtheig family bods Customized guidace to help your family avigate through complex ad chagig situatios Thought leaders ad expert educators who provide your family with iovative educatio desiged to develop lastig competece ad wisdom Defie the family's itetios regardig the creatio, preservatio ad distributio of family wealth Maage the Family s Shared Assets Effectively Lear to make better decisios together ad egotiate differeces costructively Create goverace systems to help the family maage its legacy together Experiece Family Educatio for Every Geeratio I-perso cofereces ad semiars for those ew to wealth ad experieced multigeeratioal families Resources from world-class experts: white papers, webcasts ad more Persoal support ad guidace for family members i key areas icludig fiscal resposibility, ivestig ad philathropy.

26 26 The Norther Trust Experiece Family Educatio ad Goverace: Our Offerig Cliet Services ad Support Ready resources White papers ad special reports Videocasts ad podcasts Issue-specific learig modules to help the family move from kowledge to actio Persoalized guidace ad support for wealth beeficiaries I perso programs Cliet educatio evets ad workshops for family members Educatioal ad etworkig receptios Customized advice ad cosultatio Idividual family educatio sessios Family meetig advice, desig, ad facilitatio support Better ad best practices from across the field Educatio program desig Partership with other idustry experts