John Diehl [00:00:07] Julie. This week I had a chance to visit with our friend Joe Coughlin up at the MIT lab. And Joe and I were talking about it. He was telling me a story, which I can't say. It's the first time I've heard a story like this, but it just kind of, you know, is very intriguing to me. He told a story about a financial advisor that had such a great relationship with the wealth creator of a first generation business. And when I say great relationship, I mean this advisor was invited to every family event weddings and and, you know, parties and you name it and serve this family for like 20, 30 years. And kind of the patriarch of the family passed away, had two daughters. And again, the daughters knew who this advisor was. But after a short period of time, I think Joe said it was about six months. They dropped the advisor after all those years, and they stated that the reason was because he he was more their father's advisor than he was their advisor, and he wasn't addressing issues that matter to them. And I think that when we start thinking about our clients, not just as individuals, but part of a family system, and sometimes the job of a financial professional becomes that much harder.

Julie Genjac [00:01:24] Absolutely. And I'm with you, John. That's not the first time I've heard a story like that either. And that's why I'm so excited to hear from Dave and hear his guidance on structuring conversations to truly be the advisor to all generations of a family, as opposed to That's my dad's advisor.

John Diehl [00:01:41] So why don't you share with everyone who our guest is today on the Human Centric Investing podcast?

Julie Genjac [00:01:47] Well, Dave Specht is currently serving as the director of Global Family Business Institute at the Drucker School of Management. He's an ambassador for the family owned business and writes delivers keynote speeches and develops programs on topics related to family business. He has a consulting firm called Advising Generations. Prior to this role, Dave developed the Family Business Management Program at the University of Nebraska and served as national development manager for the Family Dynamics Program at Wells Fargo Private Bank. And most importantly, he's a husband and father to six children.

John Diehl [00:02:21] And Julie, we also should mention, as people are listening to today's podcast, that they want more information. Dave is actually authored a book called The Family Business Whisperer that I am sure would be a terrific resource to look up. But hey, before we get ahead of ourselves, let's let's listen in on the conversation that we had with Dave Specht about how the family unit unit is redefining client relationships. Hi, I'm John.

Julie Genjac [00:02:50] And I'm Julie.

John Diehl [00:02:51] We're the hosts of the Hartford Funds Human Centric Investing Podcast.

Julie Genjac [00:02:56] Every other week, we're talking with inspiring thought leaders to hear their best ideas for how you can transform your relationships with your clients.

John Diehl [00:03:06] Let's go.

Julie Genjac [00:03:08] Dave, thank you so much for being here with us today on our Human Centric Investing podcast. We're delighted to be here with you.

Dave Specht [00:03:14] Thanks for having me. I'm glad to be here.

John Diehl [00:03:16] So, Dave, in our prior conversations, one aspect of kind of your specialty that really got me thinking was many times when we talk about serving our client holistically, we think about serving the individual client holistically. But for you, holistic means more than just the individual client. I mean, your specialty is kind of in family business planning. So tell us a little bit about the difference of treating the family as our client versus simply the individual?

Dave Specht [00:03:49] Well, it's normal for advisors to focus on an individual because typically the advisor wants to get to the person that is the one that can make the decision, the one that can say yes or no. And so we don't ever start with the family as an advisor.

And what happens is we typically don't pivot to the family. But if you're talking about generational wealth, it's important that we build our practices around serving the family unit rather than serving just the wealth creator. If you think about some of the main challenges that advisors face, one is retention. And as you look at the aging client population, you know, a client that passes away if there's not a relationship with the spouse, first of all, and a level of respect and a level of closeness to that spouse, you are not going to be able to retain those assets. The other thing I learned, John, was that if you do not have processes in place that serve the rising generation and that look at what are the specific needs that they have, ultimately they see you as my my dad's advisor or my mom's advisor. And that does not position you. Able to retain that client and and to be able to serve them. The last thing I'll say about serving the rising generation, John, is that there is no better way to endear yourself to a parent than to serve their their children. And so if you look at what happens to assets, a lot of times these clients that we have, they have multiple advisors.

But when we redefine the client relationship from serving a wealth creator to serving a family unit, they are much more likely to consolidate those assets. When you've taken an interest in their spouse, when you've taken an interest in serving their rising generation, helping them to have a healthy relationship with money and be prepared to manage that money.

Julie Genjac [00:05:41] So, Dave, I'm going to kick things off with the rebuttal question. You know, John and I sit down with financial professionals day in and day out and talk about their practice and their team and share best practices of other other teams across the country. And oftentimes the time issue comes up, right? I don't have time to be working with the next generation. They don't have the assets today. I need to focus on the clients that have money with me. That's that's where my team and I spend our time. How would you address that as we kick this off? Because I'm so excited to dig into this topic. I think it is extremely important. And but I just want to I want to start out on that for those that are thinking I just don't have time for that right now. I'm already up to here in terms of my capacity.

Dave Specht [00:06:30] Yeah, it makes sense. And the first thing advisors should consider doing is taking a one too many approach. And so if you think about marketing, the marketing pieces that they create, the marketing pieces that they share, there's a one to many approach there that they can leverage and not yet not have to spend a ton of time with that rising generation. But as you think about marketing pieces that are created, the industry itself creates a lot of pieces that speak about the rising generation and doesn't speak to the rising generation. So if advisors are armed with pieces that speak directly to

that rising generation, then there's a one to many effect that they can achieve without, you know, exhausting a lot of time. The other thing is, is continuing down that one to many effect is to hold events for those subgroups. So one instance we did a mothers and daughters event and a lot of the the daughters had not had a relationship with the advisors. And that was an opportunity to serve many family units at the same time and be able to create an experience and a memory that was connecting the advisor to to the mothers and the daughters. There's also a number of advisors that have started to invest in doing rising gen summits, whether they will bring 10 to 15 of their clients rising gen together, you know, for a half day to do some education. And ultimately, what that does is it creates a peer group, and then they come home and talk to their parents about the experience that they had. So I would really, you know, think of the one to many opportunities first. And then as you move up in wealth and complexity, you can you can afford to serve fewer clients, but to go into greater depth. And from there, once you're serving kind of the top to your clients, you can afford to bring in a another advisor to work with you that may relate better to the rising generation and to create other programs. But I think the first thing to do, Julie, is to start with the one to many approach with marketing and also with events.

John Diehl [00:08:45] You know, it's so interesting you mentioned Dave about the the advisor being seen as my mother. My father's advisor was just talking to our friend Joe Coughlin at MIT. He related a similar story where the financial professional was so ingrained with the family he had been to, all the weddings he had been to, like all the family events, and there were two daughters. And when the main client passed away, the daughters dumped the financial professional after six months because they just felt that the advisor did not relate to the needs that they had. So let me ask you a question, because you mention processes. So let's say I've been dealing with the wealth creator because in the family everyone looks to that person to make the, quote unquote, money decisions. You know, how do I begin to bridge? I mean, I know you just mentioned certain kind of events or things like that, but how do I, the financial professional, begin to branch that conversation beyond just the interest of the wealth creator and those immediate financial decisions?

Dave Specht [00:09:49] Well, I think it's a fantastic question. The the thing that we need to do is verbalize that we are making a change in our practice. We've learned that focusing on just one of you is actually not the not the best value that we can bring in. So we're bringing a change to our processes. And so we don't have to pretend like we know the beginning from the end, but to show a little bit of vulnerability and to say, look, what we've learned and what we've learned is that we need to to add some processes that are tailor made to serve the family unit. So I think the first thing is verbalizing that there is a change going to happen in the service offering. And it is it is for you and it's and you're going to love it. So, you know, I think that's probably the most important thing is to verbalize that we've learned something and we're going to change. And we'd love for you to come along this journey with us so that we can better serve the whole family and also so that you get greater value because ultimately they're going to pay you the same, whether you're serving one of them or you're serving the family unit. So I would look at it and position it as enhanced value for that for the client, what they pay you.

Julie Genjac [00:11:00] So Dave, that's exactly what I was going to ask next for those financial professionals that have had these clients, these wealth creators for years or decades, they've known these adult children and they haven't necessarily gone there to date. How all of a sudden tomorrow do I start to change that conversation and not have it feel awkward? So I love how you framed that, that, you know, we've learned some things.

Do you have any other language, Gene, or talking points that you found that have been successful for that financial professional that again, realizes that this really is the next iteration of their practice, but maybe has has to overcome some of the the nervousness or the anxiety in really delving deeper into these conversations.

Dave Specht [00:11:48] Well, there's a couple of opportunities. One is when an advisory practice is growing and when someone gets added to the staff. So that's a real great inflection point to say, you know what, we've decided as a firm to basically change and improve our processes. And so we want to introduce you to this this new member of our team. And they were really hired to really understand and serve the rising generation. And so there's that opportunity to kind of message and to position that new team member as additive. And it's not a we're pushing you know, we're pushing you off. It's that we're adding someone to the team so that we can serve you. So again, that's that's one inflection point is when you add a team member is you can change some of the messaging. You can have an opportunity to kind of redefine that client relationship because internally you have a new a new team member. So I think that's that's one of the things. And then just I just to reiterate, I think. Whether it's a conference or they heard the human centric investing podcast and decided that they needed to change and become better at advising. I think showing some vulnerability and being able to go to a client and say, you know what? We found a way that we believe we can serve you better and enhance, you know, the relationship that we have with not only you, but but also be helpful to your spouse and to the rising generation. Vulnerability. It's not it's not fun for everyone. But ultimately, if we can embrace it, I think clients appreciate it.

John Diehl [00:13:24] So, Dave, the conversation that you have with these families, obviously, oftentimes these are families we're talking about wealth creators. The family business is a big part of kind of their environment. Do these conversations initially start regarding business concerns or do they usually start on more personal and relational issues or kind of how do you see these conversations develop over time?

Dave Specht [00:13:52] Well, it begins wherever they are. So if they're if they have questions about the business and the continuity of the business, whether it's a management transition or ownership transition, as an advisor, you want to address that head on. But then you also want to be prepared to talk about the ancillary things that are surrounding those issues. So if they want to talk about taxes and tax minimization because they heard their friend and they they did this really cool thing and there's this technique.

And, you know, oftentimes we do hear clients coming and they want kind of what their friends had. Well, that's great. You need to address that. But then also talking about there's that opportunity to say, all right, that that makes sense. But let's talk about some of the non-financial implications, like how does this affect your spouse? How does this affect the rising generation? How do we prepare to have conversations around this technique or strategy? And so I think you just start where they are, but then you're prepared to ask them some tough questions and really to get them to into story mode.

Julie Genjac [00:14:57] Dave, when you think about some of those tough questions, I'm sure there are financial professionals listening, thinking I'm I want to do this. I bought in. But what might some of those questions be? Obviously, I would imagine the execution of those has to be fairly genuine, vulnerable to your point. And so it doesn't feel as if it is just an asset hunting expedition. Do you have some samples or some guidelines to those specific questions or at least themes that financial professionals might consider weaving in when they're really looking to develop that meaningful relationship with the next generation or many generations among a family?

Dave Specht [00:15:42] Yeah. So Julie, I want to give you a framework and I call this the anatomy of a great question. First, I'm trying to steer clear of yes, no questions. I don't want a client or a prospect to feel like I'm interrogating them. So I try to economize my questions. I don't want to ask them a lot of questions. I want to make sure the questions I ask them, get them into story mode and get them to tell me what they really care about. So I'm trying to eliminate the yes no questions. I'm also not asking questions that I already know the answer to. It's just not a good use of your time. It's not a good use of some of the questions that you have to ask them. And so the last one, and maybe the most important is to ask them questions that get you that get them to talk about what is important to them, get them into story mode. Let me give you a couple of examples. Some of these questions will kind of put them on their heels a little bit and there may be some silence. So you advisors out there that are listening, be prepared to get comfortable with the quiet. I'll just share a couple of my favorites though, Julie. So one of my favorites is, you know, what is the greatest non-financial objective you're trying to achieve with your estate plan? So this one sets people back because you've said non-financial and you said estate plan. And typically those two things don't come together. But if you give them enough time to think about the question that you just asked them, they will typically start to talk about things of the heart. Well, I want when I'm gone, I want my my kids. If I've done this well, they're going to continue to have Thanksgiving dinner together or I want to preserve the relationships. And so, again, we want our clients to think of us as not only, you know, the financial engineers of their life. We want them to think about us as a human being and us thinking of them and the human impact of their wealth on their family unit. So that's one.

Let me give you one more. If you could bequest one of your values to the rising generation, what would it be and why? So again, it's kind of confusing. Like you're talking about a bequest. Usually that's like, what money am I leaving? Or What thing? Am I leaving to my kids? But if you could bequest one of your values to your rising generation, what would that be and why? And then there's a great opportunity to just follow up on whatever they say and say, you know, how how are you strategically going about doing that? And and how is your advisors? Might we support you in that? So those are a couple of of my favorites.

John Diehl [00:18:29] So Dave, I'll ask the hard question that, you know, families can sometimes be pretty messy. Right. And relationships aren't always as tidy and friendly as maybe we hope. What if what if, in speaking to that wealth creator, you as the advisor, encounter resistance in terms of broadening things out? Is it do you follow the lead of that client? Will you bring it up? You know, think of creative ways to bring it up in the future.

Will you abandon ship at that point? Like, what do you recommend? How should I be thinking about that if I if the client comes back to me initially with a I'd rather not go there.

Dave Specht [00:19:10] Well, it begins it begins with the intent of the questions. So if we are genuinely curious, they will feel that they may not be ready to answer, but they will feel that John really cares. I mean, that question made me think. And so they may not be ready to answer. But in in in pursuit of helping them, they will feel that that question had a lot of genuineness to it. So it can be that we can let them off the hook with that question, especially if they're really struggling and say, you know what, let me give you a week and I'd really like to return return to that and revisit because I think it's important for us, your advisor, to just know how you're feeling about that or for us as your advisory team to know really how to serve you. So we'll table that, but we'd like to follow up on it. So there's different ways. I think you do need to give them a proper amount of quiet during the meeting if they're really struggling. I do think you need you know, you can you can table it,

but it all comes back to you. Can they feel that you genuinely are curious about their life and if they feel that, you know, they will likely let you in?

John Diehl [00:20:23] So, Dave, it's time for us to put you on the spot, because Julie and I are naturally curious people and our process includes something we call the Lightning Round. I mean, after all, we're on the Human Centric Investing podcast and we're curious outside of the topic we discussed today to learn a little bit more about you. So I'm going to ask you a series of questions, and I want to hear the first thing that comes into your mind so that we can learn a little bit more about who Dave is. So you ready?

Dave Specht [00:20:52] I'm nervous.

John Diehl [00:20:55] Don't be nervous. All right. Here we go. On a scale of 1 to 10, how good of a driver you.

Dave Specht [00:21:02] Eight and a half.

John Diehl [00:21:05] What's your favorite holidays?

Dave Specht [00:21:08] My favorite holiday is Christmas. I have six kids and just the magic in their little faces is something that I just love.

John Diehl [00:21:17] Are you a morning person or a night owl?

Dave Specht [00:21:21] I'm a morning person. I wish I could sleep more. But, you know, early mornings I wake up and my mind goes, and so I just need to get by, get out of bed and get to it.

John Diehl [00:21:33] Dogs or cats.

Dave Specht [00:21:37] Kids. We don't need dogs or cats we have six kids.

John Diehl [00:21:44] What is something you could eat for a week straight.

Dave Specht [00:21:50] Few a week straight. I love lasagna, but I don't know what I could eat for a week straight.

John Diehl [00:21:57] All right. Some more beat beach house or lake house?

Dave Specht [00:22:02] Lake house. I like the quiet. I like the quiet of the lake house.

John Diehl [00:22:08] Last one, iPhone or Android?

Dave Specht [00:22:12] I'm an iPhone guy.

John Diehl [00:22:14] Yeah. There we go. Well, thanks for participating in The Lightning Round. Always great to hear those answers. Julie, any five questions or comments for Dave?

Julie Genjac [00:22:25] Well Dave, someone that has four generations of my family with the same financial professional. I can speak with a lot of conviction that it is a special relationship and it's something that we all treasure. And I think we all feel very valued for

our unique contributions. But I can't encourage the conversation enough. And it sounds like for those financial professionals willing to be a little bit vulnerable, to ask some great questions and then get comfortable with the silence, that this can be an incredible way to really deepen relationships, grow the practice in the team by paring down household. So we can't thank you enough for your invaluable advice and guidance today and, and some of the specific questions that you've shared. And I'm hoping that all the financial professionals with us today feel the same way. So thank you so much for joining us on our Human Centric Investing podcast.

Dave Specht [00:23:17] Thanks for having me.

Julie Genjac [00:23:20] Thanks for listening to the Hartford Funds Human Centric Investing Podcast. If you'd like to tune in for more episodes, don't forget to subscribe wherever you get your podcasts and follow us on LinkedIn, Twitter or YouTube.

John Diehl [00:23:35] And if you'd like to be a guest and share your best ideas for transforming client relationships, email us at guest booking at Hartford Funds dot com. We'd love to hear from you.

Julie Genjac [00:23:45] Talk to you soon.

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