Can of Worms – Episode Transcript

Chris Venn:          I’m Chris Venn. I’m here with Tim Belber, our longtime friend; an author, an advisor, recently a Professor of Estate Planning at the American College. And frankly, to many wealthy families you seem like the financial consigliere. He’s the guy behind the scenes that actually provides the guidance and direction. And Tim, I’m thrilled you’re with us today. Welcome to the show.

Tim Belber:          Thanks, Chris. I’m really excited about spending some time with you and your listeners.

Chris Venn:          Awesome. So we’re going to keep this really focused because what we want to talk about here is the can of worms, and sometimes advisors get into conversations where things can potentially go sideways with their wealth holder clients. You and I got to talking about the can of worms concept not long ago, so tell us again what you told me before about that presentation that you were doing.

Tim Belber:          I was speaking to an industry group actually in Las Vegas, and a long-time colleague of mine who happened to be in the audience raised his hand. So I acknowledged it, what can I do for you? And he said, “Well you know, Tim, this is all really great stuff. But I’m afraid that if I ask some of these questions I’m going to open up a can of worms that I can’t put the lid back on, and I could lose not only the transaction but the client themselves.”

Chris Venn:          Okay. And what kind of questions were you talking about?

Tim Belber:          More the qualitative questions; questions like, tell me a little bit about what you hope the world means to your children in the future. Questions along those lines; more about getting clarity around hopes and dreams rather than necessarily financial goals.

Chris Venn:          So the dreaded soft stuff, the dreaded soft stuff. We always joke about how the soft stuff is actually the hard part. The hard numbers are pretty simple, but when we get into the qualitative side of things, it becomes a less familial conversation rather than a difficult one. Why do you spend time in the qualitative conversation with your clients?

Tim Belber:          That’s the way things are really going to happen, because when you can connect and engage with somebody at a level of their heart rather than at just their pocketbook, you’re going to get advancement. And you’re going to get advancement so much easier on a lot of transactional things because now they are associating with something that really matters to them.

Chris Venn:          Okay, but I’m an advisor. I want to get into this new financial planning, I wanted to place insurance products, I want to do investments. It’s like hopes and dreams are their issue, not my issue. That’s not my professional expertise. What do you say to an advisor when they’re … Because that’s the narrative that’s going on for lots of advisors.

Tim Belber:          You know, I think our profession is to connect our strategies with their hopes and dreams. So if someone says these are things I hope the world needs from our children, that is the door opener for you be able to say, okay, here’s what you have to work with; you’re under by X-dollars on that. Let’s look at how insurance could fit in and get you to where you want to be so your hopes and dreams are met.

Chris Venn:          But isn’t it to connect their wealth with a compelling rate of return, or isn’t the role to connect their wealth to an insurance contract that’s just going to protect them? Isn’t that the game?

Tim Belber:          That is the game, but you get a chance to step outside the game when, instead of just connecting their wealth to an insurance contract or risk, you’re now connecting whatever your strategies are with what really matters to them. And what I like to do, is I like to see advisors go through this exercise themselves. Do you have a visual experience about what it’s like to think what do I want for my children, what do I hope the world looks like for my children? And what can I do to drive towards that? And when they have that visceral moment I’ve seen in a number of clients, all of a sudden it’s, got it.

Chris Venn:          Okay. So let’s go back to the advisor saying I don’t want to open a can of worms that I can’t put a lid back on. What did you say to that advisor, and what was the actual can of worms that he was talking about?

Tim Belber:          First of all, he couldn’t define the can of worms. He had this vague idea of creating a fight within the family which would totally break down his opportunity to do financial planning and investments. So I had the conversation with him about what ‘it’ is, because he had also said I don’t want to do it because I’m afraid of opening a can of worms. Well, there were two things here: there’s the ‘it,’ and there’s the can of worms. So we had this about what is the ‘it’ that you’re thinking it is? And he said this massive therapeutic process of kumbaya down the river with the family. And I said that’s one ‘it;’ there’s thousands of ‘its’ and he could just be creating a space where a father leaves his son a watch and it just says this watch has been in our family for generations, and I hope when you look at it you’ll think back to the other people who have worn it on their wrist. That’s it. That’s the one ‘it’ that’s possible.

Tim Belber:          So if you ask the question, what’s the most prized possession you own and why, they come back and they tell you the watch that my great-grandfather wore during some war, and then you can have this whole conversation. And just being that engaged at that qualitative a level, and by the way I never say ‘soft’ anymore, at that qualitative a level will change your. And it does nothing to interfere with whatever it is you’re trying to accomplish on the financial side, but it just makes you that much more credible.

Chris Venn:          Part of the reason that we have this podcast is that it’s super clear in the industry that quantitative planning alone is no longer sufficient; not just in terms of the results that the advisors would want to get, but in terms of the requirements of wealth holders; certainly at the high net worth, the ultra-high net worth, but it’s coming down market right down into regular family planning. They want to know that this is actually going somewhere; it’s not just moving toward more. And in order to get there, there’s conversations about things that are a little bit different than just rate of return. So when it comes to the qualitative conversations, why is it important to have the conversation about what’s your most prized possession? What does that give you as the advisor, and what does that give the wealth holder?

Tim Belber:          First off, it creates a better connection. Any time you’re talking about something that’s personal to your client, you’re going to be more connected. But second, the reality of the world today, and you’re absolutely right it’s down to just about every level of financial planning, we’re in the experience economy. I’ve said this before. My plumber sends me a survey and says how was the experience of having your toilet repaired.

Chris Venn:          Sorry, a couple of answers came to mind.

Tim Belber:          These questions on the survey were, did my guy show up on time? Was he neatly dressed? Was he polite and did he accomplish what they wanted? So now they’re really concerned about the experience they’re having. Well, think about us and the experience we want our clients to have, and if we have a chance to make a difference in that experience for them by talking about things and telling them these are the things that will really let me try my recommendations to you, rather than saying you’re worth X, so therefore you should have this type of investment portfolio, these insurance products, and these legal documents. That may all be true, but it’s not tied to that individual person. It’s tied to an advisor’s definition of somebody rather than being for the person themselves.

Tim Belber:          Clients get this. It’s a little more groundwork up front, but not a whole lot. But when you can come back and say here’s my recommendation, and the reason I’m recommending this is because you said you’d like to see your grandchildren educated, and look how this can accomplish that.

Chris Venn:          So tell me, with all these extra questions and diving into the qualitative side of things, isn’t that just going to slow down the whole process? It’s like, come on, I’ve got work to do.

Tim Belber:          No, and in fact I think it speeds it up.

Chris Venn:          How’s that?

Tim Belber:          If you spend a little bit of time, and I’m not talking about a lot of questions; I tell people get three solid qualitative questions that you ask every single time you’re meeting with a new client or doing a relevance review on existing clients. And you can take those three questions and then you look at your recommendations and say how do I tie this recommendation to that. Because now they’re not looking at, well, Jim is offering me something that has a possibility based on Monte Carlo simulation of X internal rate of return, and Joe said his was a little bit higher. I need to decide which of these is better. And now they’re comparing instead of saying Pete Temps showed me exactly how this is going to accomplish getting my grandchildren educated. I think I need to do this.

Chris Venn:          Okay. So they’re starting to make decisions based on, really based on what they want, right? It’s like hey, I have this picture of the future that I want to see happen. This takes me there, as opposed to … here’s product A, here’s product B, or offering A and offer B, and they’re just comparing at I’ll say a product level. Okay, that makes sense to me.

Chris Venn:          So let’s go back to the can of worms. When you get into these conversations … You told me off air before we started here that you were facilitating a family meeting on Friday and Saturday. It’s, come on, a whole family all together? You’ve got to assume that you could potentially open a can of worms, if not a can of whoop ass, while you’re there. Things are going to go sideways.

Tim Belber:          In family meeting settings, the key is to know what the agenda in advance is. And this is the first with this family all together. They’re actually a very cool family, very cool. A lot of younger adult grandchildren, all of whom are diverse but they allow me to set the stage first about what really is wealth in the family, and about the importance of honoring each person’s individual knowledge. So now they can approach it individually instead of defining them by you don’t know much about finance and you’re not a responsible person, which is some of the stuff that had been going on within this family, but I knew to stay completely away from that. And I told them don’t look for me to bring out any foam bats because I’m not going there with you guys.

Chris Venn:          No foam bats today? No therapy?

Tim Belber:          No therapy.

Chris Venn:          And you’re not a psychologist, you’re not a therapist, but you’re stepping into these conversations. Do you have the tools for it, Tim?

Tim Belber:          You know, I know what my favorite is. I’ve got a business degree from Wharton and I’m a lawyer. Those are two things so far away from therapy, it’s unbelievable. But I tell people that part of our discovery process as we’re working through trying to promote family harmony will be to decide what other collaborators do we need on the team.

Chris Venn:          Okay, good, because there’s an important distinction here. There’s a difference between therapy and therapeutic, and there’s no question that when families get into these conversations, it is therapeutic. People do feel better. Sometimes they express emotions, sometimes there is laughter, sometimes there is tears, sometimes there are tense moments, but that doesn’t mean it’s on you to dispense the therapy, but they sure might feel better on the other side of it.

Tim Belber:          The therapeutic piece, that’s a really great differentiator because this family would be running through their agenda. They started to do it on Friday, and I said wait a minute, we have to have an opening ritual. And they said we started doing that years ago, but then we drifted away from it. I said it’s really important that you have an opening ritual so that all the baggage you walked into this room with in your head gets flushed out, and then you can sit and actually have a good conversation.

Chris Venn:          So what’d you guys do? What’s the ritual? Do you sacrifice a goat? What happened?

Tim Belber:          More of a sheep.

Chris Venn:          Okay, good, good.

Tim Belber:          I said let’s just remember why are we here, and let’s just go around … They have an executive group and then they have the full family assembly, and this was the six people executive group who represented all the different branches. And kind of a mission statement, but it had gotten so buried in language and big paragraphs of words, and I had read it so I pulled out the six points that I saw and I said, “Is this why we’re here together?” And I went through all the six points and then I said each person take about 30 seconds and tell me which of those words resonates the most with them and why.

Chris Venn:          Oh, isn’t that a simple way to do it?

Tim Belber:          Then we went around the room and they did it, and I said, “Now, you feel ready to do the work so it benefits the remainder of the family?” And they said, “Yes, let’s get at it.”

Chris Venn:          People show up in meetings, they’re scattered. They are all over the place. They are running from meeting to meeting. They have other concerns on their minds. We always joke about someone ran over their cat on the way to the meeting, which was a true story. It’s like their minds are elsewhere, and so to have rituals or to have short introductions, that actually just land people in the moment and get them present. There’s no power except in the present, and I know that Todd talks in our team constantly about three things: you have to be prepared, you have to be present, and you have to participate. And when you’re doing those three things, things go really well. So let’s go back to the can of worms. Sometimes things could go bad, and we’ve heard stories about it, I’m sure you’ve heard stories of it. But how common is that to you?

Tim Belber:          You know, having a good opening ritual if you’re going to do a group meeting like that will filter. In fact, I’ve been there when someone said, you know, I just have all this on my mind right now. I can’t address these two things on the agenda. And then we’ll make a quick decision. Then one of the things that I learned from my friend, Courtney, was if something goes bad, it’s not on me. But what’s on me is to say let’s take a breath and talk about what we just learned from this. You turn it into a learning moment.

Tim Belber:          Courtney and I were facilitating a meeting down in Florida for a family that I had brought him because they needed above my pay grade, and it blew up. The daughter and the son just went at each other, and the daughter left the room in tears. Fortunately, having two people there, Courtney whispered, “Teaching moment, and I’ll go take care of her” to me. And we had already knew this was a possibility, so I facilitated conversation on what did we just learn, and that brought it down. And then he went out and talked to her, and brought it down. And then we resumed the meeting and it was fine after that.

Tim Belber:          And at the end of the meeting we had the closing ritual, which is tell us the one thing that really stood out for you during the course of the meeting, and then half of the family said the fact that we could continue on and successfully conclude everything we wanted to even though we had a blow up.

Chris Venn:          Yeah, I could … And you already knew that there was the potential risk for that, so you brought in support right up front.

Tim Belber:          Right. The key thing to that is in all the times I’ve been doing this, and I really started facilitated family meetings probably about 1999 or 2000, so I’ve been doing-

Chris Venn:          You’ve been doing this a little while, yeah.

Tim Belber:          That’s the only time I’ve ever had anybody storm out of the room.

Chris Venn:          Okay, I think this is a key point, Tim. This is a key point because again, we talked about this off the air ahead of time. This is almost kind of like the media with the number of advisors who have broken the law and duped their clients and so on. It’s like that’s all you hear in the media. But out of three-quarters, 750,000 advisors I think it is in the U.S., it’s like one advisor has done something so it’s all over the press. But on that day, and every day, thousands and thousands and thousands of families are getting great guidance and great help, and it’s going well and so on. So we hear the stories, but you say one time since 1999? And you had support for it. You already had a forecast that there could be something there, and you had help.

Tim Belber:          Yeah. And again, that was a total aberration. But I attribute part of that to the fact that we made sure everybody was really ready to focus on what they’re there to focus on. And I’ve had only two or three times where we’ve said let’s just not work on this item today, and that’s fine. By the way, these things we’re working on a lot of times at the meetings are some sort of ownership training for the rising generation. It’s not therapy sessions; it can be therapeutic. And the funny thing is at the end of each day, I always tell them give yourselves a round of applause for sitting together this long and working together, and that always brings a smile.

Chris Venn:          Nice.

Tim Belber:          I love that it brings a great smile.

Chris Venn:          Okay, nothing that you’ve said so far sounds difficult.

Tim Belber:          Well, facilitating family meetings, that’s … I wouldn’t recommend anybody saying all right, let me just schedule a meeting with one of client’s families tomorrow. That is something that’s a skill that you can develop. But the other stuff, the conversations, they’re so easy and it’s so much nicer. I’m not there to convince somebody you have to buy this thing because of all the financial benefits it’s going to bring to you. We’re there working on something; like I’m helping a friend build a shed in their backyard, and you were thinking that we’re going to put a rack over here so I can hang my hats. That’s kind of what it feels like, rather than the estate plannin process.

Chris Venn:          Okay, good, got it. And I’ve built lots of sheds before, so it’s like how big do you want it and what else is going to need to go in it? I really get the analogy. It’s a good one. We’re going to need to tie this off, so reality check: is there really, actually a big can of worms that an advisor opens by getting into a qualitative conversation?

Tim Belber:          No, actually not.

Chris Venn:          Is it something they should be afraid of?

Tim Belber:          No. They should ask their clients because it’s so much easier to talk to a friend. And I’m not saying all your clients will be your friend, but if you think about having a friend-type conversation about what somebody’s hoping for in life, that’s what it’s like and I’d always feel good. So no, there’s nothing to be afraid of, and there really is no can of worms. If you open the can, it’s probably empty or may even be full of candy.

Chris Venn:          Well done. All right, so let’s close this off. What is something specific an advisor can do today to either engage in these with some confidence, or prepare for … What should an advisor be doing today in order to approach these qualitative conversations?

Tim Belber:          There’s two things. One, pick one to three qualitative questions that you commit to adding to your onboarding process or your relevance review process, and those have nothing to do with financial math, or taxes or asset questions. No fear questions; questions like tell me about your most prized possession. By the way, I’ve got to give credit to David York, an attorney out of Salt Lake, for that question.

Chris Venn:          Thank you, David.

Tim Belber:          He really is a great guy. The other thing, and I do this in full disclosure not as often as I should, but whenever I have scheduled a meeting with anybody, whether it’s one-on-one … And you’ve seen it, when we talk I always ask you what are we going to talk about because [inaudible 00:20:59] on purpose. So you make an agenda for the meeting and you have a purpose across the top, and the purpose should be tied to something qualitative; for example, the purpose of today’s meeting is to discuss supporting the family’s educational program over generations. Now you’ve got a tie-down that has nothing to do with … The purpose of the meeting is to review which separate account options you should select. I think an agenda based on purpose, figure out three questions that you will put on your onboarding form, and be sure you ask.

Chris Venn:          Nice. You know what, Tim? Without exaggeration, you’re one of my favorite people to talk to. You and I periodically get a chance to either do interviews, or we’ll just hop on the phone and be in conversation to explore ideas along the way. And I want to encourage those of you who are listening to go Google Tim Belber, because you’re going to want to know what this guy thinks. He’s an author; he’s an excellent author, actually, so you’re going to want to read his book. You’re going to want to look for Thoughts For A Fortnight. Is that the title of it? I always remember fortnight, not the part before it, Tim.

Tim Belber:          It’s A Thought For The Fortnight.

Chris Venn:          Thought For The Fortnight, and totally useful information to subscribe to there. Tim, any closing comment?

Tim Belber:          No, I just think that it’s great that you’re doing these podcasts, Chris, so that you get thought leaders out there in front of more people so we can start moving the needle towards more qualitative results for our clients.

Chris Venn:          You’re definitely a thought leader, and I appreciate you sharing the time with us. I’m Chris Venn. I’ve been here with Tim Belber on The Qualitative Advisor podcast. You can read the transcript. I encourage you to subscribe to it so you stay in the loop. And Tim, thanks again for sharing the time.

Tim Belber:          Thank you.