Doris Meister
relatively new phenomenon that many families are navigating for the first time as, depending on a family’s structure, the Baby Boomers, Generation X-ers and Millennials come into an age of influence. “The trend has changed whereby the ownership and knowledge of a family’s net worth [by its various members] is more equal,” says Guernsey. Still, our panelists say that men continue to make up the majority of financial decision makers, but that is changing all the time. “In a typical client relationship, the man has more often been the breadwinner. But, on average, his wife is going to outlive him, so we seek to get ahead of that and develop a relationship with his wife,” says Jonathan Hochberg. Whether it is as a precaution against death, tragedy or divorce; or just to establish a more comprehensive picture of what a family’s goals are, the panelists say leveling the information playing field for high net worth families is important to them. “No one wants to admit when they don’t know something, so it’s incumbent on us to create venues to bring that information to [the reluctant party] in a non-threatening way,” says Jennifer Lee. “If, let’s say, a woman’s husband is in charge of all the finances, and makes all the financial decisions, what can she do to get more involved to be better prepared in case she ends up divorced or widowed or . . . some sort of tragic accident occurs?” Current life expectancy data says that American women can expect to outlive men by five years. And the margin widens at the top; 80 percent of centenarians are women, according to the U.S. Census. Combine that with the fact that over 50 percent of marriages end in divorce, and the numbers clearly indicate that a majority of women will end up in charge of their financial affairs for some period of their post-marriage lives. “We had a prospective client: an elderly man, probably in his 70s. He was working with an advisor who was pretty transactional, but he and his wife wanted an organization that his wife could work with in a more collaborative way,” says Doris Meister. “He said, ‘I can control this advisor but I don’t want my wife having to deal with this.’ He said, ‘She’s going to outlive me; she’s in better health and the numbers are not on my
side, so I want to sort this out before I am gone and her relationship with the advisor becomes a disaster.”’ Both investors and advisors are realizing that these individualized relationships matter, because different people have different psychological and philosophical approaches to money and investing. And, even if it is only a small role, gender does play a part in how people think, interact and respond. “I think some of this is also style and approach; it’s tough to generalize about women because there isn’t this monolithic, homogeneous group of women—just like there isn’t for men,” says Lisa Whitcomb. “But, the research shows that women do approach money a little bit differently. On average, they tend to think more holistically, so it’s more about the purpose of the money and what the money’s going to do for the family as opposed to . . . ‘How much is it? And what does it look like?’”
“I think the most successful families we’ve seen financially, are those that are involved with philanthropy as a family.” —Jennifer Lee This is also a generational issue. A study commissioned by the Michael Bloomberg Foundation found that the rapidly growing tech and information industry is now New York’s second largest. Though finance is still number one, this statistic reveals that a growing number of young, capable minds are exploring other options, and so may not be as well informed about their family’s wealth and how to maintain their legacy as their parents were. “We just [met with] a $200 million [net worth] family from the Midwest last week; the wife and two daughters—one’s a chef, one’s in theater,” says Guernsey. “The kids have no concept about the family’s wealth . . . the wife’s involvement is limited to having a credit card, and I’m saying ‘Talk to me about money!’ We, as financial advisors and fiduciaries, do an excellent job in preparing the money for our clients, but no one is properly focused—parents and grandparents included— SEPTEMBER 2014 • AVENUE MAGAZINE | 95
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