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Official magazine of the


Get the Most Out of Stage 4 Planning


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Massachusetts Family Business Official magazine of the


THE NEXT GENERATION A nextgen joining their family business is an exciting, and potentially anxiety-inducing, time for the family. Here’s how to soften the landing and make the moment positive for all.





director’s corner

Family businesses fuel economic growth.

stage 4 planning

Science offers new insights into day-to-day business strategies.

business profile

Office Gallery International adapts to the future.


save your wealth; tell your story

The industry of legacy writing is helping business owners transfer wealth more comfortably.



passing the torch

Cleanly passing control of a family business to the heirs apparent is far from a given, experts say.

11 does my family hate me?

Why Millennials struggle to connect to the family business.

12 wealth squared

The next generation’s concept of wealth differs from that of their parents’ generation.


From the Board

Family Businesses Fuel Economic Growth By Ed Tarlow


here can be little doubt that the Massachusetts economy has recovered from the Great Recession at a faster rate, and in more depth, than any other part of the country. For proof of this you can look at facts and figures like the low unemployment rate across the commonwealth, or our increasing rate of exports. Or you can simply count the construction cranes dotting the skyline and the commuters crowding our highways as they head to their jobs. Much of the credit for the recovery goes to the state’s family-owned businesses. Family businesses continue to be the backbone of the MassachuED TARLOW setts economy and a major driver of growth and employment. Studies have shown that, nationally, family businesses comprise more than 80 percent of all businesses. They account for 62 percent of jobs, and generate 78 percent of all new job creation. I would hazard a guess that the percentages are even higher here in the Bay State. But just as they are a significant contributor to economic growth, family-owned businesses also benefit greatly from the state’s accelerating economy. Access to capital is much more available today that it was just a few years ago, allowing family companies to invest in new equipment, inventory and research to fuel further expansion. Having tremendous resources available in banking, finance, legal services, design, health care, transportation and other supporting functions is also a factor in our success. In addition, our state’s well-earned reputation for fostering innovation and technological advances has paid off for family businesses of all sizes and types. We are not mired in “rust belt” thinking, but willing to look forward and take the steps necessary to “adapt and adopt” to the changing nature of business. Nobody does this better than a

family business. Without the layers of bureaucracy to sift through that are present in a corporation, family businesses can remain nimble and flexible in responding to both opportunities and challenges. And, with all humility, I must point to the presence of organizations like the Family Business Association of Massachusetts, which provide encouragement, support and resources for those who have accepted the undertaking of running a family owned enterprise. A year ago I called for 2016 to be the “Year of the Family Business” in Massachusetts. Happily, events have proven me correct. As a member of a family-owned business, you should be rightfully proud of the role you are playing in the newest “Massachusetts Miracle.”  ■ ED TARLOW IS PRESIDENT OF THE FAMILY BUSINESS ASSOCIATION.



Official magazine of the Family Business Association. Inc.

Editorial | Advertising | Design A Family-Owned Business Since 1872

101 Huntington Ave., Suite 500 Boston, MA 02199

DIRECTORS Jeffrey S. Davis, Mage, LLC Al DeNapoli, Tarlow, Breed, Hart & Rodgers, P.C. Brian Nagle, First Republic Private Wealth Management


PRESIDENT Edward D. Tarlow, Tarlow, Breed, Hart & Rodgers, P.C.

VICE PRESIDENT Catherine Watson, Tarlow, Breed, Hart & Rodgers, P.C.

TREASURER Jeffery P. Foley, Gray, Gray & Gray, LLP

280 Summer Street, Boston, MA 02210 Phone 617-428-5100 Fax 617-428-5119 ©2016 The Warren Group Inc. All rights reserved. The Warren Group is a trademark of The Warren Group Inc. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher.






An Introduction to Stage 4 Planning for Family Businesses

By Scott E. Friedman, Andrea H. HusVar and Eliza P. Friedman


hile family businesses can achieve great economic prosperity and often outperform their non-family firm counterparts, authorities continue to cite statistics suggesting that approximately 70 percent of family businesses fail to successfully complete a transition to the second generation, and a staggering 90 percent of family businesses fail to complete a transition to ownership by the third generation. The commonality of family business struggles is often expressed through the SCOTT E. FRIEDMAN well-known proverb, “shirtsleeves to shirtsleeves in three generations” – a proverb that seems to have a counterpart in every country with family businesses. ANDREA H. HUSVAR While the accounts of what compromises these statistics will often only be known to the family members and their advisors, many of whom serve under professional obligations of confiELIZA P. FRIEDMAN dentiality, there are nevertheless seemingly endless published accounts of prominent families in business together, including the Gucci, Guin-

ness and Gallo families, whose infighting has become known through the public litigation process. In spite of endless seminars, articles, websites and other information designed to help families in business together, not much has changed and far too many families, many of whom expend substantial resources designed to allow them to secure the most advanced contemporary planning techniques, continue to experience dysfunction – and the “failure statistics” cited above appear to remain as predictable as they are consistent. We believe the failure of current planning strategies results primarily from professional advisors giving disproportionate attention to helping families answer two questions inextricably tied to their wealth: first, “who shares in the wealth?” (which we refer to as stage 1 planning) and second, “how much do they get?” (which we refer to as stage 2 planning). Some families in business together have engaged family business consultants, professionals with varying academic degrees and professional experience. Family business consultants often use tools like codes of conduct, mission statements and family constitutions, and help to professionalize governance (which we refer to as stage 3 planning). Taking it a step further, which we are introducing as stage 4 planning – now widely used by the largest companies in the world – considers and applies new insights from science, particularly from the

fields of positive psychology and social neuroscience. An increasing amount of research is being undertaken at some of the top colleges and universities in the world to examine, with scientific rigor, factors that influence how individuals and organizations flourish – and languish. And some of the world’s greatest companies – including Google, Amazon, Zappos and many others – have been increasingly driven to apply those insights and others that they uncover from their experience. Insights include best practices for common business procedures, including how to start a meeting, how to ask constructive, openended questions, how to listen thoughtfully and how to practice empathy. While stage 4 planning strategies have gained increasing recognition in nonfamily business settings, they remains a virtually undeveloped planning paradigm for family businesses. In recognition of the continuing value of traditional planning strategies, but understanding the importance of insights from science, family businesses would be well advised to integrate both the “hard” and the “soft” issues to provide a more holistic approach to family business planning.  ■ SCOTT E. FRIEDMAN, ANDREA H. HUSVAR AND ELIZA P. FRIEDMAN ARE ATTORNEYS AT BUFFALO, NEW YORK-BASED LIPPES MATHIAS WEXLER FRIEDMAN LLP / NEXTGEN ADVISORS LLC. THEY MAY BE REACHED BY EMAIL AT SFRIEDMAN@LIPPES.COM; AHUSVAR@ LIPPES.COM; EFRIEDMAN@LIPPES.COM OR BY PHONE AT (716) 853-5100. 5

Business Profile

From One Couple to the Next Office Gallery International Adapts to the Future

Gwen and Allen Wluka when they first started the company.

Hilary and Mike show off some of their custom furniture and soundproofing artwork.

By Malea Ritz


s an idea born out of a previous job at an international furniture design company gone bankrupt, Allen Wluka wanted to try something new. He had experience and knew all of the right people in the industry, so he went to the principal of some of the biggest suppliers in Denmark with a proposal – he wanted to start his own company. Thus was Office Gallery International born. Founded with his wife, Gwen, and working with his niece, Jordana, Allen grew the office furniture and design company into a family business, later bringing in his good friend and longtime coworker of nearly 35 years, Mike Troia. “It was one of those beautiful relationships,” Allen said. Mike’s wife, Hilary, who he had worked 6

with for many years at Macy’s, also jumped onboard. After riding out the waves of the recession with dedicated employees and patient clients, Allen and Gwen decided it was time to implement an exit strategy as they approached retirement. “From the onset, when I started with Allen, we had talked about transitioning the business to me eventually,” Mike said. “I just couldn’t see anyone handling the company the way Mike and Hilary did, Hilary,” Allen said. The Wlukas transitioned ownership of the company to Mike and Hilary in July of this year. “It’s because of that taproot that we have in our friendship that I think enabled us to do this. Because it’s never easy transitioning

a business,” Mike said. Since then, Mike and Hilary have worked to maintain the business’s previously established professional reputation and have also spent time adding their own personal stamp on the company. “Because we’ve had such a loyal following of customers, we’ve not had to do really any advertising or marketing in the past, and business has been very steady – and it’s still steady. My question has been, ‘Well, if we really did spend some time on marketing and networking and trying to expose ourselves, how well can we do?’ So that’s an experiment that we’re trying right now,” Hilary said. Technology Transitions Mike and Hilary have not only seen the

Mike demonstrates the split screen option and design software on the company’s 65-inch wireless touchscreen computer.

One of the corporate conference room desks available at Office Gallery International.

Some of the furniture on display at the Office Gallery International showroom.

From left to right, Gwen and Allen Wluka and Mike and Hilary Troia.

business transition owners, but also its focus. Though the company was initially geared around home office furnishings, the pair noted that the industry is changing. Workers have shifted away from desktop computers to more flexible laptops and tablets, eliminating the need for a traditional, stationary home office space. “About 50 percent of our customers want a sit-stand desk,” Hilary said, highlighting one in the showroom that acclimates electronically. As companies change office layouts from cubicles to open floor plans, benching system desks have become increasingly common, so the company has made that option available as well. Mike noted that there can be little privacy in an office with an open floor plan to make personal phone calls, so the company also offers a privacy sofa with built-in outlets on the armrest and a soundproof panel that extends above the chair. Office Gallery also uses and sells a 65-inch wireless touchscreen computer,

mounted on a wheeled stand, to design products for clients through new software that allows them to see custom designs come to life almost instantaneously. The pair noted how interactive and easy the new technology has made the custom design experience for both them and the customer, also highlighting the functionality for corporate clients. “You can roll it around in your office and have a virtual conference room wherever and [whenever] you want. You can Skype people from all over the country and have everybody talking at the same time,” Hilary said. The company also does space design planning to help clients determine what pieces will best suit their space and taste. The Troias also emphasized the importance of having a showroom so clients can try out every aspect of their office needs in person – from chairs, to desks, to soundproofing – and see it for themselves. “It’s the designer look without the de-

signer price,” Hilary said. “We take the sale from start to finish,” Mike said. “We do the design work; it doesn’t go back to a design person in some studio.” When asked what the key is to maintaining balance in a family business, Hilary said, “First of all, you have to really like each other. We balance each other out in terms of our strengths and our weaknesses.” “The bottom line is you have to be good friends – we’re good friends as much as we’re partners,” Mike said. “You can’t let things fester – get it out in the open, deal with it and move on.” Hilary noted that they have a 30-minute debriefing session when they get home, so they can leave the rest of it at work. “We love what we do, and that helps,” Hilary said. ■ MALEA RITZ IS AN ASSOCIATE EDITOR AT THE WARREN GROUP, PUBLISHER OF MASSACHUSETTS FAMILY BUSINESS. SHE MAY BE REACHED AT MRITZ@THEWARRENGROUP.COM. 7

Save Your Wealth: Tell Your Story By Dave Franco


wo down-and-out fellows sit on Skid Row, commiserating. “I blame my father for my terrible lot in life,” one man says to the other. “He could have given me his fortune and made my life easy, but he didn’t do it.” “I blame my father for my lot in life, too,” the other man replies. “He was faced with the exact same decision as your dad.” “He didn’t leave you his fortune, either, huh?” “No, he did. How do you think I ended up here?” Now and for the next 20 years, something unprecedented is taking place. The Baby Boomers are turning over all the money they’ve created to their children in a wealth DAVE FRANCO transfer bar none. When completed, it will be a tidal wave of money large enough to actually alter our entire economy. Some industries are reeling. But some are licking their chops – those that know that when the NextGens get all that money, they will be rich for what they have received but not for what they earned – and they will spend like maniacs. It should be a red flag for anyone who is about to transfer their wealth to their kids. Most of our children are not prepared to receive it – and why should they be? They didn’t make it. They didn’t sacrifice everything to realize a dream. They didn’t build a successful business on virtues and values. And all that money could fall right through their fingers. Consider the dangers of being the sudden recipient of great buckets of money. Most will either spend it, lose it in bad investments, or fight over it. It will be a sudden blast to their egos, lifestyles, decision-making, emotions and senses of security, even senses of self. It is about to ruin a lot of lives. It is a sad truth about a gift lovingly intended to make their lives better. If only the NextGens could know what it took to make that money. If only they could experience the pain, struggle and sacrifice, they might handle it differently. They can. Many successful Baby Boomers, before transferring their wealth, are transferring their wisdom in a narrative of their lives; a written legacy of experiences, lessons, values and principles. Often with the help of a writer, Boomers are delving into the past to check beneath every rock in search of life lessons they can craft into experiences that will engage their heirs, and give them an opportunity to walk a mile in their shoes. Of course, the children don’t have to be the only recipients. Some who are turning over businesses to their kids are making as many copies of their legacy as there are employees, and giving one to each. It’s not a bad idea, considering that most familyowned businesses limp along in the second generation and fail by 8

the third. You might as well leave all those wisdoms to a broader audience than just one – just to be safe. Not everyone who wants to leave a legacy employs a legacy writer, however. If you’re going to write it yourself, these few tips may help you to do it quickly and efficiently. First, it is not necessary to think of your legacy story as covering your entire life. Many will start to compile all those memories and then feel intimidated by the great mountain of them. It’s a sure way to quit before beginning. Instead, do this: Think of your life in episodes. They don’t even need to segue from one story to the next. They can stand on their own. It’s a good way to keep the storytelling spry and upbeat. Also, write one episode of your life, finish it, then put it down. Return in a day or two, or a week. But don’t keep plowing through; the energy spent will drain you and keep you from finishing. Pick a date of completion (birthday, anniversary, etc.) and tell somebody so they are depending on you. The chances of you finishing go sky high. Write with a friend who wants to do the same. Commit to meeting regularly. With a friend, it’s fun, and when it’s fun, it won’t be a chore. Give us the bad. Many folks try to navigate through the waters of their life without bringing up anything unsightly. But when you exclude your disappointments, poor judgments and painful times, you rob your family of the impact of what you’ve learned. Every painful part of your life has led to something of value. Keep in mind that painful only remains painful until it intersects with meaning. Lastly, when a person hears a story, their defenses go down. When one begins to hear a lecture, hearts close. No lectures, please. If you’re going to provide your heirs with a financial windfall, also provide them the means to keep it. Now that’s a valuable gift. ■ DAVE FRANCO IS THE OWNER AND CREATIVE DIRECTOR OF LINKBOOK LEGACIES, A STORYTELLING COMPANY; HE MAY BE REACHED AT LINKBOOKLEGACIES.COM.

Passing on the Business to the Next Generation: Not for Everyone By Joseph Weinstein


n article in The Economist (“The Reluctant Heir”) addressed the challenges in getting the next generation ready to take over the family business. These challenges are nothing new in the family business community. In fact, the Pacific Family Business Institute’s 2015 survey of Northwest family-owned businesses cites this parJOSEPH WEINSTEIN ticular challenge as the number one concern among current family business leaders. The Economist article’s author, Christophe Bernard, observed that an effective handoff requires preparation, planning and a lot more time and effort than anyone might expect. All of this presumes, however, that the goal of a family-owned business is to continue the ownership and leadership of the business to the next generation. Indeed, some do not define a business as a family-owned business until it has made at least one generational transition and has the clear intent of making as many more as possible. Our common expectation in this community is that a transition to the next generation is always the first choice, and only if that proves unviable, would a family business consider other routes. Yet, there are certainly businesses in our community that we would observe to be family-owned businesses that do not share this philosophy. The owners and leaders of these businesses affirmatively do not want to pass the business to the next generation, even given the option and potentially notwithstanding the expression of interest by the rising generation. To these individuals, the pride and legacy of keeping the business in the

family (and the family in the business) are just not worth the inherent challenges and struggles. First and foremost, they find it hard to believe that their children, just by virtue of being in the same family line, would have the same interests and drive. In other words, they have no ambition in coaxing their children into working in their industry when those children might have chosen a completely different career path on their own, had they not faced the family pressure. Similarly, being in the same family line is no guaranty of an aptitude or ability in a particular business. For these business owners, it is important that what they have built continues on, and they are actually limiting their ability to achieve this goal if they limit their pool of potential successors to their own children. There is certainly no shortage of statistical and anecdotal evidence of subsequent generations not being able to carry the torch effectively. To be certain, these business owners are not looking to penalize their own children or cut them out of the benefit of the business. For these business owners, they would much rather consider all their options to ensure the continued success of the business they have built and, at the same time, use the financial successes they have achieved to support their children in the endeavors they (their children) select. This sentiment – and the concern about the temptation of trying to effect a generational

transaction even when it is not the right fit – has caused some business owners to adopt policies expressly excluding their children from the taking over the businesses. They can work their summers in the business and will no doubt benefit from the financial success of the business, but they can (and must) choose their own path Not the story we typically hear in the family business community – nor an approach that would or should appeal to all family businesses. It is, however, an honest approach for certain situations. ■ JOE WEINSTEIN IS PARTNER AT DAVIS WRIGHT TREMAINE. HE REPRESENTS COMPANIES IN CORPORATE STRUCTURING, MERGERS AND ACQUISITIONS, DIVESTITURES, AND OTHER BUSINESS TRANSACTIONS, AND FOCUSES PARTICULARLY ON TRANSACTIONS INVOLVING FAMILY OR CLOSELY HELD BUSINESSES, PRIVATE EQUITY FUNDS, AND INTERNATIONAL BUSINESSES. HE MAY BE REACHED JOEWEINSTEIN@DWT.COM OR (206) 757-8165.

This article first appeared on the website of the Family Business Resource Center,


Making the Most of the Moment When a Nextgen Joins the Family Business

By Amy J. Katz


he offer of a first job is a major milestone for many young people. The moment they accept it is exciting, for it confirms their belief in their potential, an affirmation of their skills and talents, the beginning of financial independence and the opportunity to define themselves apart from their parents. For young adults who decide to work in their family’s business, often called “nextgens,” the experience of accepting that first real job is quite differAMY J. KATZ ent. For some, it is a natural progression from after-school and summer jobs at the business, and a fulfillment of expectations that were clear from early childhood. They make their decision with the trust that over time they will have the opportunity to develop their skills and 10

interests and enjoy the privileges that will likely come their way. For others, the moment comes when they decide to join the business after time spent working in other settings. They return to the business eager to share their insights and to influence and improve the business. Occasionally, the choice follows a time of questioning and doubt about whether they can work for their parents, achieve what they have achieved, and ultimately, whether they have the commitment and capacity to sustain the family legacy. Whether the choice is expected or surprising, the moment of choice has lifelong implications. Dr. Megan Jay, a clinical psychologist, calls the 20s “the most defining decade of adulthood.” In family businesses, a son or daughter’s choice to commit to the family business is a defining moment for their parents as well. It can be they first time they understand that their children

truly appreciate the family’s history and that their hopes for the succession of the business might be realized. As with many life decisions, the impact of choosing to work in one’s family business – that crucial moment – may not be felt immediately. It takes time to navigate the complexities of being in the spotlight and – rightly or wrongly – being viewed as a powerful person. So when a senior employee praises a nextgen’s contributions, it’s a sign that the choice was a good one. A brother who tells his sister, “You’re good at that; I’m good at this,” conveys the respect that is vital to an effective sibling partnerships. A daughter who has the freedom to lead a new division realizes that she can be an entrepreneur within the business. These are the experiences that build confidence in one’s choices. Of course, there are frustrations, as with any new job. The first time a parent says Continued on page 14

Does My Family Hate Me?

Why Millennials Struggle to Connect to the Family Business By Craig Berger


f you’re a Millennial, when a family business is running smoothly, it can be great. For one, you’ve probably got pretty solid job security. For another, there’s no awkward first day/week/month. You grew up with this business. You know the players; you know the job. You’re probably on a pretty reliable promotional track, too. On the other hand, when things don’t go well, it can be disastrous. Brother against brother, daughter against father, nephew versus aunt, problems CRAIG BERGER in the family business are problems for both the family AND the business. If you’re a Millennial and things aren’t going well in your family business, you may be desperate to understand why. A lot of the reason can come from the different attitudes and values Millennials have as opposed to those of Gen X-ers and Baby Boomers. Here are some examples of those differences and how they can affect your relationship in the family business. World View Baby Boomers, having grown up in a time of prosperity and with the belief that they could do anything they put their minds to, tend to believe in the American Dream – that if you work hard, you can be successful. For many that dream has been realized as they went from being “longhaired hippies” to CEOs, trailblazers and even heads of state. Gen-Xers are the first generation of latchkey kids. Their parents often either divorced or worked insane hours, leaving them to their own devices. They also did not benefit from some of the economic advantages their parents did. They grew up believing if they don’t take care of themselves, no one is going to do it for them, resulting in a more cynical worldview than either the Boomers or the Millennials. Millennials grew up in the digital age, which brought with it economic expan-

sion. They were often overscheduled and some say over praised as children. They really believe they can change the world, and they don’t necessarily need to go to college or spend 40 years in the same 9-to5 job to do it. Core Values Baby Boomers tend to place high value on personal growth and family loyalty. They believe in equal work opportunities and that if you work hard, anything is possible. Gen-Xers tend to be highly educated, focused on self-reliance more informal than their predecessors and yes, more cynical. They are more likely to be focused on work-life balance than Boomers.

Millennials and Family Business Relationships So how does this all translate into family business relationships? Well, if you’re a Millennial, your energy may be a little off-putting to your Gen-X relatives. They may be skeptical of your motives, thinking you may be just planning your next job jump, or they may be afraid your unguarded optimism will lead to costly mistakes down the road. Boomer relatives may feel like you should be in the office more, and that failure to do so indicates a lack of commitment, not understanding how Millennials work best. In any of these cases, the key is communication. Educate your older business

Brother against brother, daughter against father, nephew versus aunt, problems in the family business are problems for both the family AND the business. Millennials believe in consumption culture. They believe in living in the moment. If something doesn’t work for them, they have no qualms about jumping to something else. They believe in having fun, but they also believe in ethical responsibility, to other people and to the planet. They are confident, social, diverse and highly tech-savvy. Work Ethic The Boomer work ethic tends to be one of drive. Sixty-hour work weeks are not uncommon, and many Boomers feel that working long and hard is a source of pride, regardless of whether it results in happiness or even wealth. Gen X-ers believe in more of a balance between work and family. They want to work smarter, not longer and harder. They crave structure and direction and they tend to be skeptical when things are going well. Millennials are often always looking for the next adventure. They are ambitious, love to multitask and have an entrepreneurial spirit.

colleague relatives about the Millennial culture and show them how it can be to their benefit in the family business. Reassure them that your optimism is measured by caution, and your energy reflects your passion for the business. At the same time, expect them to make more of effort to understand how and why you work the way you do. Let them shadow you for a day. Recommend they try working from home for a week. Bring Millennial consumers into the business and show how your methods acquired these new customers. If you can help the Boomers and Gen-Xers in your life understand why you work the way you do, and if you can encourage them to make efforts in this direction as well, you have a better chance of a smoothly running workplace and, subsequently, better family relationships. ■ CRAIG BERGER IS PRODUCER OF HIGH-QUALITY WRITING FOR A VARIETY OF OUTLETS. FOR MORE INFORMATION VISIT GREATCONTENTSOLUTIONS.WORDPRESS.COM; EMAIL THECRAIGBERGER@GMAIL.COM OR CALL (323) 377-2000. 11

Wealth Squared

The Next Generation’s Concept of Wealth

By Javaid Ansari


hen the next generation thinks of wealth, it is not our parents’ idea of a paidoff, picket fence suburban home with a Cadillac in the driveway. Wealth for my generation has a wider arc: work-life balance, sustainable living, purpose, helping others and the pursuit of happiness – and all of this coming at the beginning of a career JAVAID ANSARI 12

instead of at full retirement age. We want our wealth multiplied and we want it now. I should know; I am the next generation in a family-owned wealth management business. Standing on the shoulders of a successful first generation, I have the fortunate opportunity to focus on aspects of my life that would have been a luxury for my parents. They were singularity dedicated to providing financial stability that previously did not exist. Most next generations in a family business today are the benefactors of the previous generation’s

sacrifice. But if you ask my parents whether they want their children to endure their same struggles, you of course will hear a definite “no.” They want their children’s wealth to be multiplied as well. What do I mean by wealth multiplied? Let me break it down in a simple equation: (Financial Wealth) X (Psychological + Physical Wealth) = Wealth2 Given the successes of those before us, the objectives for our financial wealth center around growth and preservation. While still a daunting task given the speed

at which business models evolve in today’s digital world, I would say it is still a lighter endeavor than creating the wealth from nothing. Financial wealth with the objective of growth and preservation is achievable with a prudent financial plan consistently executed from a relatively young age, hopefully in your 20s. Through diligent savings and compounding returns over time, financial wealth will be attained. Today’s low cost online advisors (FutureAdvisor, Wealthfront, Betterment, Fidelity Go – just to name a few) provide proven savings and investment strategies that my parents’ financial advisor provides, but also have the next generation necessary delivery vehicle – a digital interface via an online and mobile experience. If these online advisors really wanted to capture the next generation’s interest, they would enhance their products to include social responsible investments, and I have a feeling you will be seeing that soon. So in today’s marketplace, the financial wealth management part of the equation for the next generation is being adequately served

– but that is only half of the equation. Given the prosperity passed on from those before us, my generation can focus on the psychological and physical wealth components of the equation from the beginning. This is true not only for a successful family business, but for the entire nation’s next generation, as we all have benefitted from the last 30 years of financial and social progress. In making the distinction between financial wealth and enduring happiness, i.e. psychological and physical wealth, Dale Carnegie said it best – “Success is getting what you want. Happiness is wanting what you get.” Happiness comes from meaningful relationships, gratitude and physical well-being. The recent progression in the scientific field of positive psychology is shedding light on the fact that happiness is not an end destination, but a habit that must be learned and cultivated. One leader in this field, The Greater Good Center at UC Berkeley, has developed a free online course entitled “The Science of Happiness” that provides scientifically proven

methods to cultivating happiness. This is just the beginning, because this component of the wealth equation for the next generation is just as important as the first. In the eyes of my generation, financial wealth without psychological and physical wealth is not a lot of wealth. Vis versa, psychological and physical wealth without financial wealth is also a struggle, hence the multiplicative nature of the equation. I believe there is an opportunity in today’s wealth management industry to incorporate for their clients not only a financial plan, but a life plan, particularly for those in the next generation who will inherit tremendous financial wealth yet are also looking to multiply their wealth across all facets of their lives. Many in the next generation aspire to take their family’s business to the next level … for my family’s wealth management business, I believe this idea of Wealth2 will do just that. ■ JAVAID ANSARI IS EXECUTIVE VICE PRESIDENT OF COMPAK ASSET MANAGEMENT, A CALIFORNIA-BASED, FAMILY-OWNED WEALTH MANAGEMENT FIRM. HE MAY BE REACHED AT JANSARI@COMPAK.COM.

Not all family members are alike. At Tarlow Breed Hart & Rodgers we celebrate the differences that make family businesses special. With guidance from our family business specialists, your company could bear fruit for generations to come. Isn’t it time you had a conversation with Ed Tarlow, Chairman of our Family Business Practice Group? Call Ed at (617) 218-2011.

Rise Above the Ordinary.

101 Huntington Ave., Boston 617.218.2000 |


Continued from page 10

firmly, “Don’t call me Dad here,” can be unsettling. A nextgen who expects a quick promotion can be stunned to receive critical feedback from a non-family supervisor. When the leadership team of a family business resists a nextgen’s push for new software, the experience can be humbling. And perhaps most difficult, a nextgen who has idealized a parent may feel disenchanted and even angry as the realization that the parent is flawed sets in. But that moment of decision, and the learning that comes after it, while challenging at times can eventually provide both parents and their adult children a chance to recreate their relationships. In that moment of decision to join the business, nextgens can provide a way for families to renew their connection to each other and to the work and values that have shaped their lives. What can make “the moment” a decision to celebrate for years to come? Nextgens deserve the opportunity to consider the pros and cons, to understand the expectations of their new role, and to ask about the potential for career growth, development, salary and benefits. Parents and non-family executives can take the nextgen’s interest in working at the business seriously, without any assumptions that he or she will easily fit in. They can create thoughtful interview questions that ask the nextgen to describe their strengths and areas where development is needed. They can also create scenarios about how the position might evolve, explain employ-

ee policies and practices, and articulate clearly what success will look like. In other words, parents and other executives would do well to give nextgens the satisfaction that they have been officially hired for a specific position. Family businesses often pride themselves on having an informal, “family” culture. But bringing in the next generation can be surprisingly disruptive for nextgens, their parents and non-family employees.

BUSINESS BFM MFAB ad v1_Layout 1FAMILY 4/8/14 5:23 PM Page 1

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By giving the nextgen the time and space to make a true decision, and by preparing the organization for the nextgen’s role, the moment a nextgen joins the family business can be a significant and joyful event that sets the stage for the future.  ■ AMY J. KATZ, PH.D., IS PRESIDENT OF DAUGHTERS IN










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“The biggest challenge for your business today? Tomorrow.”

Donald P. DiCarlo Jr. M.A., J.D., LL.M. (Tax) National Director of Business Advisory Services, Senior Wealth Strategist Don helps business owners develop and implement successful business succession strategies. He forges relationships with clients while they are still actively engaged in managing the business, and offers key advice at each critical stage. He is part of a seasoned team of wealth advisory professionals who work seamlessly to provide the full spectrum of services required by clients. To learn more about our collaborative and creative approach to managing wealth, contact Mark Andersen at 617.457.2056 or

Transitioning ownership of your business will undoubtedly be one of the most significant events of your life. And one you may not be prepared to even think about right now. However, with careful planning at each stage, you’ll be ready for what’s ahead – and confident that you’ll preserve everything you’ve worked so hard to build. Growing your business. Your banker and insurance specialist will help determine which deposit, lending, cash management, and insurance solutions will best fuel the growth of your business. You’ll also want to ensure your will and other estate planning documents are in order, and that you’re taking advantage of tax-minimization strategies. Transitioning business capital to personal capital. As your business evolves, you may consider selling or transitioning to your son or daughter, or someone outside the family. We can help you explore exit strategies, secure the right buyer, and value your business. We’ll also help you determine how and where to invest your wealth, and how to manage your liquidity and cash flow needs.

Managing and transferring personal wealth. This is when all your hard work pays off. You’ll begin to implement trust and planning strategies to transfer wealth to the next generation. You may also have the freedom to donate resources to those organizations you find meaningful.




At Wilmington Trust, we can help create a plan for each stage of your business and your life. Founded by a family business leader more than a century ago, we have the experience to help guide you through times of growth and succession. Our approach focuses on both your business and personal financial needs, allowing us to make each transition in your journey a seamless one. For more insight on how to successfully prepare for what’s next, view our capital transitions video series at

F I D U C I A R Y S E R V I C E S | W E A LT H P L A N N I N G | I N V E S T M E N T M A N A G E M E N T | P R I VAT E B A N K I N G

This article is for informational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service. This article is not designed or intended to provide financial, tax, legal, accounting, or other professional advice since such advice always requires consideration of individual circumstances. If professional advice is needed, the services of your professional advisor should be sought. Private Banking is the marketing name for a product and service offering. Investments: • Are NOT FDIC-Insured • Have NO Bank Guarantee • May Lose Value Wilmington Trust is a registered service mark. Wilmington Trust Corporation is a wholly owned subsidiary of M&T Bank Corporation (M&T). Investment management and fiduciary services are provided by Wilmington Trust Company, operating in Delaware only, and Wilmington Trust, N.A., a national bank. Loans, retail and business deposits, and other personal and business banking services and products are offered by M&T Bank, member FDIC. ©2016 Wilmington Trust Corporation and its affiliates. All rights reserved.

Family Business - Winter 2016  

In this issue, a special focus on the next generation of family business leadership.

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