Glenn Kurlander once had a businessman client who made his family so extremely wealthy, they never had to work another day in their lives.
There was just one problem: The man's son, who was threatening self-harm. At one point, the son even said he would drive his motorcycle into a wall and kill himself.
"If you've been doing this work for any significant period of time, and if your
The event offered advisors and other wealth management professionals tips on "family conflict management and resolution," particularly for ultrahigh net worth families. It came as industry experts report that ultrawealthy families are
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Although most wealth management professionals are untrained to deal with these seemingly non-financial situations, it's critical that they know how to respond, Kurlander said.
"Without being melodramatic, the stakes are not about minimizing gift and estate tax, but literally maybe about matters of life and death."
Kurlander, the managing director and head of family governance and wealth education at Morgan Stanley, spoke on the panel with Dennis Jaffe, the senior research fellow at BanyanGlobal Family Business Advisors, and Daniel Lerner, the founder of Strategic Family Solution. Elizabeth Chand, the head of family office resources generalists at Morgan Stanley, moderated the discussion. Morgan Stanley has increasingly offered its services to family offices, having
Whether the problem is a child with behavioral, mental health or addiction challenges, or family members who have grown apart, or estate feuds over who gets what and why, an advisor could face many challenges with their ultrahigh net worth families. Failing to address those could cost not only the family their fortune and happiness, but also the advisor their source of income.
Panelists at the FLAG Institute shared several tips on how to successfully intervene.
Acknowledge family conflict and address it head-on
Many financial advisors come into the profession hoping to avoid emotions and just deal with numbers, Jaffe said.
"'When family members get upset, I just want it to go away,'" Jaffe recalled an advisor telling him once. However, that's a missed opportunity — because as wealthy clients' needs become more complex, they will expect and demand more out of their financial advisor, who has a business incentive to become that deeply trusted person and first call for a rich client in any situation.
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And conflict is inevitable in all families, Jaffe said. "Conflict is something that families want to avoid. But what they don't understand is that conflict is really just another word for differences."
The most common issue he sees with families is unwillingness to acknowledge their naturally occurring differences, he said. However, avoiding open discussion ironically creates the drama they hoped to avoid. "It fragments the family over time. It can blow up because it's not addressed."
Add vast amounts of wealth to the equation, and resentments can fester, he said. For example, the matriarch or patriarch may make "secret deals" with a child or other relative, allocating funds to them — but going behind the backs of other family members to do so, fearing disapproval or an argument.
"It gets destructive, and you've got the kind of situation where somebody feels like there's favoritism. Like, 'He got a job in the business and I didn't. Boys are treated differently than girls.' … The old thing, 'Dad always liked you best.'"
"Parental attention is a scarce resource," Jaffe said, brewing resentments that can carry over into the feelings and dynamics that grown children have toward each other and their parents. When there's a family business at stake, which is always the case for family offices, these long-held emotions can color decision-making.
An advisor can make things worse if they're caught in the middle and either pretend not to notice what's going on or appear to take sides, Jaffe said.
Create governance with an abundance mindset
What advisors should do instead, is help the family move forward in a collaborative direction, Jaffe said.
"They can bring the family together to say, 'Hey, we need to talk about this.' They can help them hold family meetings. They can develop structures to make decisions. 'Let's create family policies.'" These discussions, which the advisor can meditate to ensure accountability and open airing of issues, create the grounds for governance that becomes an ongoing set of rules guiding the family on how to handle its wealth.
"We can talk about what we're doing in our lives. We can talk about philanthropy. Let's meet regularly, and that's what we call a family council."
Another thing families can do is create a code of conduct, Jaffe said. This establishes norms for respectful behavior and having productive conversations or fair fights. Ground rules might include agreeing to talk about problems directly with the person involved, instead of behind their back; listening without interrupting, and using "I" statements to take responsibility for one's feelings — "to say 'I want this' or 'I feel this,' rather than blaming each other."
Most of all, when families are this wealthy, advisors should guide them to approach such conversations from an abundance mindset, Jaffe said, "rather than an either-or, or a limited mindset. … Now there are many leadership roles in the family, there is enough money for everybody. So let's talk about how to allocate it fairly."
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Err on the side of safety, in emergency situations
In the case of a child that is threatening self-harm or harm to others, advisors have a duty to take any report of such behavior seriously, Lerner said. "Is there an imminent threat in this situation? And if that's the case, then the first call is to 911."
Sadly, these situations are "not uncommon" with the wealthy clients Lerner sees.
"Even if it's just this threat of, 'Oh, I'm gonna ride my motorcycle into a wall or I'm gonna kill myself, or I can't take this anymore, I'm gonna jump off a cliff.' The bottom line is that it's best to err on the side of safety. Make sure that everyone is safe. And then you can have any conversation after that about how to move forward."
The son in the above situation, whose parents Kurlander and Lerner worked with around 15 years ago, was likely bluffing in his suicide threats, Lerner said, but to be on the safe side, he still had the parents call 911. As a result of that call, the son had an uncomfortable experience in the psych ward and was dissuaded from threatening suicide again, Lerner said, citing the parents' request for their son to instead communicate his grievances openly with them about what he wanted.
Have vetted mental health professionals on call
One of the biggest mistakes an advisor can make when their client has mental health problems in the family is failing to have vetted experts at the ready to assist with a crisis moment, Lerner said.
"At the moment of crisis, where at least the person calling you or the family as a whole is in the most pain, those are generally the opportunities, where they're the most open for intervention… to help and receive guidance. And if they're calling you, that means they're asking for help."
The right advisor will seize the moment and already have, at a minimum, a shortlist of trusted professionals they can immediately refer the caller to, Lerner said. There should be some level of vetting in place: "You've either worked with [them] before and you trust them, you've sent people to them and you've gotten positive feedback, [or] there's other people who you trust, other professionals, who have sent clients to them."
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The arsenal of health and mental health experts can include a family therapist, marriage and family therapist, a psychiatrist, or a family doctor with a specialty in behavioral medicine, Lerner said. Preferably, at least one of them will be "a strategist or a coach that really has a proven ability, proven specialization in the area of family dynamics." There should also be a criminal defense attorney for the client who "every so often" may need one, he said.
Getting people to change and be open to help is already hard, Lerner said. Thus, when someone finally becomes willing, the advisor must not waste time making the hand-off. "When you get off the phone or end the meeting … and start your search, then you get back to them, whether it's a day or two days or a week. You may have lost that golden moment, and now they're off on to the next thing or another crisis du jour."
