• “Advisers have seen similar pain in so many families; they quickly arrive at what looks like the best fix.  Not only did they fall short of a full diagnosis, they borrowed a diagnosis from the illness of a different family.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.  Page59
    • “Advisers go into planning thinking the client is looking for a solution. In reality, they’re not even sure what the problem is. They’re simply overwhelmed with symptoms, a particular point of pain they want exorcised from their lives.  What they really need is clarity about what’s bugging them, why they want fixed, and why, so they can confidently select a solution. They need help figuring out the shape of the hole before they can even consider what kind of peg will offer a snug fit.” Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.  Page 59
    • “As financial planning services have become commonplace, a fee-for-service models haven’t evolved with parallel maturity.  Many advisers who are charging explicit planning fees view this revenue stream as a loss leader.  A plan without product is not a successful engagement.  Wealth holders are beginning to see out a more believable value exchange.  They are consciously aware that clarity is built on trust, and trust can only be present with a clear exchange of fee for service.  Ironically, wealth holders are ready to pay for planning;  advisers are often afraid to charge.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.  Page 89
    • “Many advisers still provide planning for free in hopes of getting the insurance sale.  Some advisers charge fees to manage assets include the planning in this single bulk fee.  Some charge planning fees, but the fee is not commensurate with the promised scope of work.  Often even the wealth holder doubts it’s enough to cover a full planning process.  We know in our hearts and our intellects that an explicit exchange of value requires clear communication and a defined price tag, yet many advisers have not yet achieved a business model in which their behavior reflects their subconscious belief system.  Much of this may be connected to a lack of confidence or process.  If I charge a fee, I have to do the work.  If I charge a fee, I must be able to clearly document what I’m charging for.  It must be able to articulate a compelling value proposition for my planning process.  If I charge larger fees, I might scare the guy away and blow the insurance sale.  If I’m going to manage a nice chunk of assets, I don’t need to stand on ceremony and charge a separate fee for planning.  I think I’ll hold off on that for a while.  Things seem to be working just fine the way they are.  We submit to you that there is no other profession besides financial services that provides such detailed work, requiring substantial expertise and integrity, in the hope of being compensated for it later, during a different and very specific facet of the relationship.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.  Page 90
    • “Picture a wealth holder sitting down with a renowned architect and a luxury home builder.  The wealth holder tells them to build a top-notch house to his liking, using the best talent and materials they can find.  At the end of the 18-month process, they’ll all come back to the table and he’ll decide whether to buy the house.  How long does it take the architect and the builder to back away from the negotiating table?  How can we be stewards of a process we’re not explicitly and sufficiently paid to execute?  What other professional discipline allows the first encounter with a new client to be a loss leader?  If the wealth holder isn’t paying a fee, what is their expectation for quality?  Wealth holders understand value exchange.  They engage in dozens of fee-for-service relationships daily with their vendors, domestic help, and medical professionals.  What do they expect from professionals who give their greatest talent away for free?  And how committed are they to a process that either lacks clear definition or is so good it doesn’t cost anything?”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.  Page 90-91
    • “When wealth holders come into a relationship paying a fee that seems unbelievably small in relation to the work at hand, or paying no fee at all, consider their mindset and commitment level.  They’re not agreeing to plan, they’re agreeing to test you.  Why not stick a toe in and see how the water feels?  What have they got to lose?  On the other side of the table sits a professional who just agreed to do work for less than he or she is worth in the open market.  What emotion is the adviser bringing to the table?  Fear?Lack of confidence?  Consider the dynamic that was just created.  The wealth holder has one eye casually on the diagnostics and the adviser is hooked up to an oxygen tank of financial fumes in hopes of a huge payday that is months or years away.  Two intelligent successful people have just engaged in a dysfunctional dance that may spin, dip, and twirl for months or years at a time.” The Right Side of the Table:  Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.  Page 91
    • “Just as the adviser has attempted to remove the financial barriers to entry, he or she has created a relationship roadblock.  If you’re smart and do good work, wealth holders can’t figure out why you’re working for free.  It makes them uncomfortable.  If wealth holders have to question a professional’s motivation on any level, the questioning presents a natural obstacle to decision making.  As the work increases in intensity, quality, and duration, the question mark becomes larger than life.  The pending product sale becomes an elephant in the room.  It stands between the wealth holder and the adviser, creating intense suction, eliminating the perception of objectivity like a giant relationship vacuum.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.  Page 92
    • “It’s important to note that many advisers who manage money and charge asset management fees are likewise engaging in this unintentional barter.  A common practice is to charge a 1 percent asset management fee and to include the financial planning services in that 1 percent.  There is not communication about what portion of the 1 percent is being allocated to the planning services.  What happens when the market causes downward pressure on asset management fees?  Now the adviser has to charge .75 percent or .5 percent to remain competitive.  Can he or she still afford to do the financial plan?  Which portion is being squeezed- the quality of the plan or the quality of the investment advice and service?  If the plan is so good, why not ask the wealth holder to pay for it?  If it’s not, why is it being offered at all?”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.  Page 92-93
    • “Picture this.  A cleaning service shows up at your house unannounced.  They mention the names of several of your neighbors whom you know and trust, and ask to clean your house to see if you like it.  They’re building their business and you’re just the type of client who fits their service model.  It feels uncomfortable.  Shouldn’t everyone get paid for their work?  They persist.  You accept.  A week later, they’re still cleaning.  You’ve never seen anyone work so hard;  yet they won’t accept payment.  Don’t worry, they say, they’ll be compensated plenty in the end.  You wonder where all that money’s going to come from.  The next day, you get home from work and they’ve been grocery shopping and cooking.  They took your dog to the groomer and did your laundry.  At this point, you have no idea what services they offer and how much it’ll cost you.  The work looks good but the commerce confusion is overwhelming.  You politely cut a check for what seems reasonable and back out of the deal.  It was far too vague and far too good to be true.  In contrast, when a professional relationship begins with a clear fee-for-service value exchange, certain things happen.  The adviser demonstrates confidence in what he or she is bringing to the planning table.  The wealth holder makes a clear and committed choice to be part of the process.  It’s far easier to help someone who wants to be helped.  By charging an explicit fee just for planning services, one that is commensurate with your expertise and scope of work, you’ve taken yourself out of the sales model and into the advice model.  Now, let’s make sure the value exchange plays out.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.  Page 93
    • “Lay it all on the table.  When was the last time you met a self-made person who preferred a relationship interlaced with secrecy and two-way mirrors?  Confidence is contagious.  Make yours part of your value exchange.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.  Page 95
    • “When planning is provided for free in lieu of a pending insurance sale, future revenue is, in essence, borrowed to pay for current time and talent.  Another possibility is that commissions from past sales are consumed to cover current overhead.  As such, there’s little or no money left to provide the post-sale service that the contract obligates the seller to provide.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.  Page 95
    • “It is worth noting that if the most trusted adviser provides the selection, placement, and post-sale service of the insurance product, he or she can receive the commission compensation without jeopardizing the most trusted advisor role.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent? By Scott Fithian and Todd Fithian.  Page 96
    • “8-STEP FINANCIAL PLANNING PROCESS:  1. Establish and define the advisor-clientrelationship 2. Determine goals and gather data 3. Analyze and evaluate the current situation 4. Develop and present recommendations 5. Communicate recommendations 6. Implement the recommendations 7. Monitor plan 8. Practice professionally”
    • “Life Cycle Planning:  1.  Early career (ages 25–35).  2. Career development (ages 35–50)3. Peak accumulation (ages 50–62)4. Preretirement (3–6 years before planned retirement)5. Retirement (ages 62–66+)”
    • “What follows are some probing questions about family money and family philanthropy. There are no single or right answers. Asking the question and hearing how other family members respond are more important than the answers.
      • What challenges do we face regarding our family and our money?
      • What is our vision for our family’s future?
      • What is our family’s definition of success?
      • What is an appropriate financial inheritance for our children?
      • What principles will guide our decisions about estate allocations?
      • What has been our experience of working together as a family?
      • How do we prepare our children to steward a financial inheritance?
      • Should we bring our son-in-law or daughter-in-law into financial and philanthropic conversations?
      • What are our core philanthropic interests and how did these come to be important to us?
      • How may we enable the next generation to create a shared dream with a family foundation while also fulfilling the founder’s mission?
      • How do we promote a sense of togetherness in our family while also encouraging each person’s individuality?” Wealth in Families Third Edition (Charles W. Collier) Page 1-2
  • “Consider these questions:
    • What is really important to your family?
    • What are your family’s true assets?
    • What should you do to guide and support the life journey of each family member over time?
    • How wealthy do you want your children to be?
    • Do you feel you have a responsibility to society?  These are the deeper questions families ought to ask themselves today- and on a continuing basis.” Wealth in Families Third Edition (Charles W. Collier) Page 5
  • “What kind of family do you want to be? What do you want to accomplish or help others to accomplish? What legacy do you want to leave your children and society? Deciding where to go with your financial success and why you want to meet those goals are the strategic questions that you should ask first. Determining how to get there and which legal arrangements to use are secondary tactical decisions.” Wealth in Families Third Edition (Charles W. Collier) Page 5
  • “I define a successful family as one that knows who it is, what it stands for, and where it is going. Successful families manage themselves deliberately. There is much at stake for your individual family members, for your family as a whole, and for society at large. If you and your family can define “what’s important” before deciding “what to do,” then your children will thrive, your family will flourish, and society will benefit.” Wealth in Families Third Edition (Charles W. Collier) Page 5
  • How, then, should you think about the deeper issues around wealth? Begin by asking your family four simple questions drawn from a business model for strategic planning taught at Harvard Business School:
    • What is your family’s vision for its future?
    • Can your family members work together?
    • Can your family make joint decisions around money, philanthropy, and legacy?
    • How should your family make decisions together? ”Wealth in Families Third Edition (Charles W. Collier) Page 6
  • “Let me show you how we work. Planning can be done above the line or below the line. Above-the-line planning is about the why of it all. Below the line, planning is about the how of it all. The world is full of experts who can tell you how. But they tend to assume they already know what you want to accomplish. They tend to assume that what you want to accomplish is what they are prepared and paid to provide. They tend to assume that one client is much like another and that the tools, plans, techniques, and boilerplate that works well for one client can be quickly repurposed for use with another. In reality, you are unique. Getting to know you and what you wish to accomplish and why you wish to get that accomplished is my strong point. I know the tools, techniques, and planning process, and when I do not have expert knowledge in a particular area I operate as a talent scout to find the relevant experts. But my strength is in getting to know you, and in helping you articulate the outcomes you want to achieve for yourself, those you love, and for the community, if you have aspirations in that direction. Most planners spend 80 percent or more of their time below the line. I spend 80 percent or more of my time above the line. They aspire to be experts in tools and plans. I aspire to be an expert in you and what you wish to accomplish.”  A CONCEPTUAL FRAMEWORK FOR PLANNING WITH PHILANTHROPIC TOOLS.Phil Cubeta, CLU, ChFC, MSFS, CAP, The Sallie B. and William B. Wallace Chair in Philanthropy at The American College
  • “Above the line planning elicits vision, mission, values, goals, principles, fears, needs, concerns, and higher aspirations. Above-the-line planning, when it takes hold, often results in a story or narrative about who the client was, is, and wishes to become, or how the client wishes to be remembered. Below the line planning is a financial, tax, and legal science. It issues in financial projections, illustrations of particular tools, flow charts and diagrams, boilerplate explanations, scenarios testing financial options, and ultimately in a host of legal documents including wills, business agreement and trusts, including charitable trusts and foundations.”  A CONCEPTUAL FRAMEWORK FOR PLANNING WITH PHILANTHROPIC TOOLS.Phil Cubeta, CLU, ChFC, MSFS, CAP, The Sallie B. and William B. Wallace Chair in Philanthropy at The American College
  • “Often clients are far more idealistic and interesting than you would ever know from reading their documents. It is a shame for the client and for society when a client’s highest aspirations die with them. To prevent, it is our responsibility to get the client to talk about what he or she most deeply wishes to accomplish, and then to line the planning up so it fulfills that mission.”  A CONCEPTUAL FRAMEWORK FOR PLANNING WITH PHILANTHROPIC TOOLS.Phil Cubeta, CLU, ChFC, MSFS, CAP, The Sallie B. and William B. Wallace Chair in Philanthropy at The American College
  • “Advisers have seen similar pain in so many families; they quickly arrive at what looks like the best fix.  Not only did they fall short of a full diagnosis, they borrowed a diagnosis from the illness of a different family.”  The Right Side of the Table:  Where do You Sit in the Minds of the Affluent?  By Scott Fithian and Todd Fithian.  Page 59