Did you know there are some truly life-changing benefits to having the right people on your financial team? Believe it or not, a family-focused fiduciary can change you.
Shall we count the ways?
First and foremost, a strong fiduciary will always be your advocate and will commit to being your advocate for the long term. Your fiduciary will help you develop a process for establishing your financial and life goals and develop systems and blueprints for you to reach those goals.
We need to be clear that we’re not just talking about helping you make as much money as you can (though that’s a foundational piece, for sure). It’s also about solving conflicts, making tough decisions, and even stepping in as the world’s most underrated marriage and family counselor (if needed!).
Let’s look at some of the official and unofficial roles of a high-quality fiduciary—and ultimately how one will benefit you.
1. Interrogator
No, no, no. We’re not here to unlock your deep, dark secrets, though you do need to be straightforward about your habits, behaviors, dreams, and stumbling blocks. However, our first order of business is to do a deep dive into the business of you.
What do you really want? To get to that answer, we will ask more questions than your favorite TV detective. The fact is we can’t do our best work until we know a lot about you. It’s not about what we think. It’s about what you want. Our initial discovery meetings—as well as our lasting relationship—will get us there. So be ready to open up and speak up.
2. Connector
One of our main values is this: If we don’t know the answer to a question you have or if we don’t have the expertise to complete a project, we will put our best efforts into finding the person or firm who can help you. We are a professional connector, helping you meet up with everyone from accountants, estate attorneys, paperwork organizers, monthly bill payers, and more.
We don’t pass the buck. It’s not “figure it out yourself,” it’s “we will figure out the many parts needed together.”
3. Negotiator
While some people like the situations in life that call for cat-and-mouse, poker-face negotiations, other people don’t like the process or don’t have the time or skill for it. That’s where we can come in.
We have negotiated such things as lines of credit, mortgage rates, airplane leases, sales of homes, and the costs of moving a loved one into a continuing care retirement community. We very commonly negotiate car acquisitions or leases. In all cases, we do our research and work in the interest of our clients to save them money and their time.
4. Money Maker
Of course, one of our main responsibilities is to help you attain your financial goals.
One of my favorite stories revolves around Jerry, a computer programmer who had about $120,000 saved for retirement when we met him about 20 years before he planned to retire. Jerry was single with no kids, and he received about $120,000 from his sister. His goal was to get to about $500,000 to $600,000 to achieve his retirement dreams, and we helped Jerry significantly expand that goal.
Note that I said “helped,” because Jerry did his part. He lived within his means and his budget, and he did what we advised when it came to saving, investing, and spending. We were able to do our part in developing his proper asset allocation, dollar cost averaging strategy, use of pretax savings tools, and estate planning techniques.
The result was a sizable nest egg for his retirement. Now he has the funds he needs to do what he wants. For example, he loves to travel. Even better, he can now offer to his friends to pay their way if they can’t afford to go on the trip with him.
5. Traffic Cop
Jonathan and Sarah had one heck of a mess. They were a big, tight family—with all seven of their kids coming over with their own families most every Friday night for a large family dinner. They were together in every sense of the word but weren’t without their troubles.
One of their grandkids had more than $100,000 in college loans and was on the verge of bankruptcy with the added problem of a serious health crisis. Another one of their kids wanted to borrow money to buy a small bakery business.
Here was the problem they brought to me: How do we help those in need (or those in want) while being fair to the rest of the family?
I spoke to creditors chasing the family to help negotiate the student debt down to $65,000. Then, Jonathan and Sarah stepped in; they paid the debt off, paid the fees for health services, and funded the small business.
In terms of fairness, we made those payments not as an outright gift, but as a loan against their inheritance. In that approach, the inheritance remained equitable among all seven kids.
Every family needs traffic cops to step in when it seems like the lights are out and everybody is driving in different directions – and a good fiduciary can do exactly that.
6. Guardian Angel
One of my clients was a gentleman who worked for a small Philadelphia company. He made a modest income but one that provided for his family. Guess what? He was a winner in a multi-million-dollar lottery drawing, making millions for himself and his family.
Talk about a life change! He and his wife had the natural reaction: Let’s redo the bathrooms in our home! Let’s get a Mercedes! Let’s buy a beach house! I get the sentiment, but we’ve all heard the stories about lottery winners who wind up bankrupt.
Our solution was to hit a six-month pause button—no spending on major purchases for the first six months to give them time to let their new wealth sink in, evaluate what they wanted, and tell those nearby with their hands out for a loan or gift that the window is closed.
They could also see the extraordinary amount that goes to taxes, and put a bundle into investments to get a glimpse of how money can grow. Finally, they would be in a position to make the best decisions for their shorter-term wishes and long-term health.
A good fiduciary gives you the framework to make good decisions that are most beneficial to your current life and long-term goals, especially if you’re dealing with a lack of experience, confusion, and complexities of life.
7. Puzzle Solver
You’ve got a lot of pieces to your life. Some may interconnect easily, and others may feel like they never fit. No matter the case, life is complex—and we’re here to solve the puzzles.
Here’s one of my favorite stories: Sally and Hank both had very comfortable careers (she in accounting, he in sales). They lived in a rural area of Pennsylvania and wanted to stay there when they retired and be close to their families. They also wanted to help their kids with owning their own homes.
What ended up happening? They bought a large piece of property and divided off one or two acres for each of their children’s families to have their own home on the bigger family farm. We helped them achieve their main focus—family togetherness. Their long-term objective was for their offspring to enjoy the family compound together after they passed away. We supported their goal by looking at all of the financial pieces, the tax implications, and other logistical questions—and got it done.
Today, Sally and Hank host dinner for the extended family once a week and even have enough money left over to fund a yearly family vacation with 20 to 30 people. They get what they want—not just money-wise, but also family-wise. That is the joy we want to help facilitate, and if we can help you remove the obstacles and coordinate life’s moving pieces, that’s perhaps the greatest role we can serve.
8. Roomba
It’s not just because we can help clean up messes. Think about how a Roomba hits a wall and then goes to a different location to suck up the crumbs. We do that too. Hit a wall? We can move in a different direction. As your goals or life situations change, we need to be able to adapt quickly, perhaps mobilize assets, and reevaluate targets. Our ability to move in changing directions is one of our strengths.
9. Career Changer
Jeanette was a successful senior executive in her family’s business. She and her husband, Ron, made about $1 million a year. But she hated her job—mainly because she couldn’t get along with her cousin, who was also a company executive. Ron was unhappy in his sales position, and he wanted more autonomy and felt stuck in his career.
This is a common theme we see, of course, as people feel like they have no way out of bad situations because they fear not being able to make the money that they’re currently making.
How did we help? We came up with an exit plan, and then we followed through: we searched for opportunities that would be the right fit at similar income levels. We found a company she could invest in and where she could become president. We also helped her transition financially into her new role.
But that’s not the most important piece. The bigger point is that we held strategy sessions with her. By helping her identify her joys and pains, we could think through how she could make a change. Those tactics (and knowing someone has your back) are benefits you really can’t put a price tag on.
I’m also happy to report that Jeanette’s relationship is also better with her cousin now that she left the company. Maybe call us Family Healers, too?
10. Train Station
We serve as the hub through which all decisions can travel. That’s incredibly important in any kind of financial situation, especially complex ones.
Recently, we talked to a couple whose daughter wanted to buy a multi-million-dollar apartment in California. She and her partner had been renting for so long (close to $10,000 a month) and felt like they were throwing their money away. They wanted to invest in a property.
The only problem? She couldn’t afford the price tag.
In most cases, advisers would say “no way” and move on, but because we know the overall family dynamic—how much the elder couple has, how much the apartment means to the daughter, the tax implications, and more—we could offer solutions as long as we knew they wouldn’t hurt my clients’ income, estate, or tax situation.
We figured out an intra-family asset-protection trust loan, which had lower rate tax implications and better estate planning outcomes than a bank loan. This approach helped the couple fund a portion of their daughter’s apartment. The daughter still has skin in the game.
What’s that worth? It’s a heck of a lot more than you’d get from your big-box financial adviser with thousands of clients.
11. Family Historian
Think about what happens if a fiduciary firm works with a family for years, even decades. We get to know them extremely well. We know their goals, their desires, their life. We also get to know their families. When the patriarch and/or matriarch passes, we can stay as the constant—helping the next generation not only with the logistics but also with the emotional connections with the parents.
We know and understand their values, mission, and desires in life. That, as we all know, is an important piece of who we are. While I’m certainly not suggesting that we’re a part of the family (though I have had many a holiday dinner with clients who have become close friends), we can help be a sounding board and play an important role for generations to come.
12. Marriage Counselor
Most of us probably know that the number one thing couples fight about isn’t sex or who unloads the dishwasher 97.3 percent of the time. It’s money. We fight about spending too much, saving too little, and everything in between.
How do we step in? We encourage differences of perspective, even conflicts at times, to come out; we talk them through, we help couples align values and/or learn to compromise, and we offer solutions for fixing what seems unfixable.
In many ways, it’s about communication, but it’s also about having a third party involved—someone who’s unbiased and not emotionally attached—to help couples see things more clearly and get on the same page. It’s not about counseling per se, of course, but it does serve the role of conflict resolution.
When times get tough, you don’t have to struggle–and you shouldn’t let money troubles fissure your strongest bonds. A good fiduciary is perfectly capable of stepping in with an outside perspective to crunch the numbers and smooth things over for you and your loved ones.
13. Parent
When you were a kid, your parents told you “No” when you wanted to eat crayons for dinner. Now that you’re an adult, few people have the authority to tell you “No.”
Of course, cops and bosses are notable exceptions. One of our codes is that clients always have the final decision, but fiduciaries will be honest with you. So, you can expect to hear “No” or “There is a better way” at some point in your journey, but it always comes from a good place… just like a parent.
14. Teacher
Sometimes, you need to ask an expert. Most of us don’t learn effectively without wisdom and guidance from someone else. Finances are no different.
I have a referral named Zo, a scientist born in another country, where his wife still owns thousands of acres of farmland. Nearing retirement, Zo came to us for advice. We discussed his priorities—his spirituality and relationships with his family members being at the top of the list. He wanted some help thinking about his finances and learning to reinvent and rethink his spending formula for the next 20 to 30 years.
This is the obvious part of our job. We will help you figure out the complexity of your financial puzzle… but here’s where it gets interesting. Zo and his wife have four grown children, and he wanted to help them with their mortgages and help them learn about finances so they’d have the knowledge and skill sets to serve them throughout life.
I linked the children up with two of our Certified Financial Planners who are also millennials so they could all speak the same language. I also gave the children some reading assignments, which they would use to jumpstart discussions with our advisers. The goal: We would help teach Zo’s children about finance and their futures.
We don’t want our clients in the dark when they make decisions. Education is one of our main missions because that’s ultimately what is best for you and your family in the long run. We involve families’ children in all our processes to help teach them how to get started or progress on many critical issues involving finances and developing systematic wealth creation techniques. This can be a major service, as many of our clients are worried about how their kids will handle their wealth once they inherit.
Since time is our most precious asset, teaching your kids about good financial habits early protects your family’s wealth.
15. Life Coach/Personal Trainer
How do you, as you approach retirement, expand your physicality—meaning your physical well-being and your mental well-being? They both impact how you approach other things in your life. We strongly advocate for a healthy approach to life to help inform your purpose and goals.
Some examples include doing things to keep yourself physically active, mentally sharp, and emotionally joyful. When all these things are aligned, it allows you to focus on what you care about and helps you create even more freedom in your future life. We’re not trying to provide medical advice or show you the correct running form to avoid shin splints. However, we will ask you how to get beyond the “money” question.
As a fiduciary firm, we help our clients by asking them to present us with a clear vision of their future, including what will give them significance and impact in their lives.
16. Legacy Keeper
Imagine a couple living a modest life in Idaho. They have two sons—one just getting by with no savings, the other starting his career in the gig economy. Susan and Randall came into a lot of money (due to a family inheritance) recently, but they do not live an entitled life or have an entitled mentality. They were stressed when they collected a significant inheritance (in the $9 million range).
How do you figure out estate taxes? How much cash do they need to supplement their modestly lived lives into their 60s and beyond? How much should they give to help their sons?
We walked them through all the questions with possible alternative solutions, but one of the greatest things we did was to get the sons involved.
Though the sons had no experience with money and asset management, they were hard workers and wanted to learn. We included them in separate individual conversations, taught them about what we do, and figured out the best ways to help them think about their newfound assets.
This approach, we suspect, will be the key to helping the sons make smart decisions when and if they inherit the family fortune.
This is the bottom line when it comes to a fiduciary’s role. Yes, we wear a lot of hats, but our mission is to make a major change and move away from transactional relationships. Instead, we want those relationships to be transformational.
The shift from transactional to transformational may seem like a lofty goal, but I strive to achieve it every day of my career because that is how I can best serve you.