[THIS BLOG IS THE FIRST OF TWO PARTS]
Families and business—a marriage made in heaven or a train wreck waiting to happen? That depends—it could be either. A unified family with strong values, clear communication with a spirit of innovation can not only be a great business—but have advantages over non-family businesses. On the other hand, a family business with poor communication, lack of clear job descriptions, underperforming family members on the payroll, a sense of entitlement, and lack of entrepreneurial spirit will have a short life span.
Covenant Family Wealth Advisors, where I work, does a lot of succession and transition planning for family business owners. Covenant was inspired by and originally operated as Ronald Blue & Co in Canada. The relationship evolved to one of collaboration, rather than legal ties, but the philosophy remains the same. Ronald Blue & Co., headquartered in Atlanta, GA., is one of the largest independent fee-only wealth management firms in the United States, with 13 locations and billions under management. The approach of Ronald Blue & Co is to "look beyond the mere numbers to provide comprehensive financial strategies based on biblical wisdom designed to empower our clients to live enriched lives.”
The President and CEO of Ronald Blue & Co. is Russ Crosson. He will be speaking at the Entrepreneurial Leaders Conference in Toronto on Nov 16th, 2016 on the topic, “The Family Enterprise: How A Family Conference Can Help Your Finances and Strengthen Your Family.” Russ is the author of four books, Your Life... Well Spent, The Truth About Money Lies, 8 Important Money Decisions for Every Couple, and What Makes a Leader Great. This blog post is a summary of Russ’ approach and a number of direct quotes.
Russ proposes a provocative question: “Is it easier to train your children financial principles around the coffee table – or from your coffin? Obviously, the correct answer is the first one. But why do so many parents wait until it’s too late?” Very few parents can easily discuss and develop financial plans with their children. If they are not able to do so then the family conference can provide tremendous benefits and peace of mind.
Russ explains that several years ago he orchestrated the first of what at Ronald Blue & Co. they call “family conferences.” He was in Chicago coordinating a meeting involving clients, their children and spouses, and some of the clients’ professional advisors (attorneys and investment managers). During that meeting, the benefits of such family conferences became obvious to him. Here is what Russ learned about (1) the two general purposes of family conferences and (2) how they can be beneficial in three specific situations.
TWO GENERAL PURPOSES OF THE FAMILY CONFERENCES
“There are two general purposes for family conferences. First, and foremost, it’s an opportunity for communication among family members about philosophy, beliefs and values regarding finances. As parents, we’re responsible for training our children in all areas of life, including the financial area. Although parents have the right to do with their assets as they wish, the family conference permits frank dialogue concerning important issues while all parties are present, rather than after a death (which is usually when a “family conference” occurs). With such healthy communication, the family conference enhances family harmony. Communicating early avoids bitterness that may be generated over money decisions.”
“Second, the family conference is for child training. It’s an opportunity for Mom and Dad to begin training their children about budgeting, investment, estate planning and other financial responsibilities. Children observe their parents modelling and implementing wise financial stewardship.”
Russ Crosson on Helping The Family Enterprise Succeed [Part II] >>
