It’s important to make sure the advisory team you ultimately select is compatible with you and that they have the right character, chemistry and relevant expertise.
In the eighth part of the “M Word” blog series, Lori Sackler shares why hiring the right third-party professionals is critical to having successful financial talks and keeping your money and family relationships intact.
Professionals can play and important role in your family’s “money talks.” As John Harington, an English Courtier (under Queen Elizabeth I), author and translator from the 16th Century states, “from your confessor, lawyer and physician, hide not your case in no condition.” Harington is clearly highlighting the importance of fully disclosing details to the professionals you work with. In this current modern world of wealth management, I would include your accountant and Financial Advisor as well as other important third-party professionals. These professional can be helpful in assisting with important money talks with family members.
Advisors are necessary when money is at stake. Individuals and families with assets need to engage professionals; if they do not, they run a much higher risk of losing money and experiencing a failed transfer of family wealth. In my experience, I have witnessed many examples of individuals and families who did not engage the right professionals and, as a result, experienced significant loss of family assets and trauma to family relationships.
Luckily, more and more people are beginning to understand the benefits of working with advisors and having a team of people they can rely on. However, there are still those who are reluctant to turn to a financial or legal advisor for help. There is no single reason why, but fees can be a reason. Also, many people who have been successful in their own profession or career believe that their intelligence and expertise in one field gives them the knowledge and wisdom they need to do their own financial planning. Unfortunately, those who try to do so without professional financial guidance run the risk of serious potential consequences for their loved ones if they do not get the proper counsel.
There are several different considerations to take into account including major designations such as Certified Financial PlannerTM, CPA, Investment Advisor, CIMA ®, etc. Other factors include choosing accountants and estate planning lawyers as well as devising a list of questions you can ask professionals when you choose your team. It’s important to make sure the advisory team you ultimately select is compatible with you and that they have the right character, chemistry and relevant expertise for your particular “case.”
How does all this relate to millennials and the money talk? First, millennials are clearly staking out their place in the family unit, the work force and the economy as boomers retire and move on. Additionally, millennials are currently the largest segment of the work force and are creating their own personal wealth. In order to transition wealth successfully to the next generation, boomers are better served by reaching out to the next generation and engaging them in talks early on.
There is a 70% failure rate in transitioning wealth* – the primary reason is breakdown in trust and communication. If you want to be a success story and preserve your assets and family relationships, you’ll want to have these conversations sooner rather than later. As for hiring professionals to help with the talk, I argue that the money talk is filled with emotional charge and is best achieved with outside help that you trust. In an ideal situation, the lead professional coordinates with the other family counsel and helps ensure that all the issues are fully vetted, the financial and estate plan is updated and the right parties to the transition are engaged in the conversations and informed.
Family meetings are typically a good format for these discussions. And the advisor, who takes the charge to lead, must have the requisite abilities, including good communication skills and a strong understanding of the issues and the parties involved. This is not an easy ask, but necessary for a successful outcome.
In my next blog, I’ll help you understand the need to create your own format and process for these money talks. I’ll also share why repeated conversations can ultimately create the best financial and estate plans to help ensure your family relationships and wealth remain intact as you experience life transitions.
*Roy O. Williams/Vic Pressier 2013
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About Lori Sackler
Lori has designed her team practice to help clients keep up with the pace of change in their lives, have time to reflect and satisfy security, lifestyle and legacy concerns. With her team and the professionals at Morgan Stanley, she acts as a personal chief financial officer for her clients. The Sackler Group chooses to work with a limited number of clients for whom they can have a meaningful impact.
Lori has the distinction of holding three designations: CERTIFIED FINANCIAL PLANNERTM, CERTIFIED INVESTMENT MANAGEMENT ANALYST®, and FAMILY WEALTH DIRECTOR. An established thought leader, Lori has published numerous articles and books, including “The M Word: The Money Talk Every Family Needs to Have” and “The M Word Journal: How to Have the Money Talk.” She also created and hosted a popular radio program in New York City.
Lori earned her BA with Distinction from the University of Michigan and holds an MS in Marketing and Finance from the University of Texas. She is also an accredited (non-practicing) CPA and is a member of the NJ Society of Certified Public Accountants. Morgan Stanley honored Lori with appointments to the exclusive Regional and National Financial Advisor Councils, and named her an Alternative Investments Director. In 2020 and 2017, Forbes Magazine named Lori one of the Top 200 Women Financial Advisors in the U.S. in 2017, 2018 and 2020, and chose her as one of the Best-in-State Wealth Advisors in the U.S. in 2018.*
* The criteria for these awards do not include factors relating to investment performance. Neither Morgan Stanley Smith Barney nor its Financial Advisors pay a fee in exchange for the rating.