Advisors should not shy away from challenging conversations with clients about family wealth and estate planning, according to Morgan Stanley executives.
Many clients are grateful when their advisors initiate tough conversations, David Bokman, head of Morgan Stanley’s family office resources, said last week during a virtual event hosted by the firm’s Family Legacy and Governance Institute.
“They are not as hesitant to discuss these things as advisors frequently think they are and a lot of times it’s the advisors' — that’s us, their Morgan Stanley advisors, their other advisors — it’s the advisor’s own hesitancy that is being projected onto the client in a lot of cases,” he said. “Broadly, erring on the side of pushing a little bit further than you might otherwise be inclined to generally pays off.”
Other speakers at the event acknowledged that advisors may have concerns, for example, about a client’s difficult family dynamics.
However, Glenn Kurlander, managing director and head of Morgan Stanley’s family governance and wealth education, said that while he has seen some very troubled family dynamics during his almost four-decade career, they are by far a minority among clients he has worked with.
Additionally, Kurlander said clients are seldom uncomfortable with his questions.
“Over all the time I have been doing this work, I think it has been two or three or maybe four times that a client has said ‘You know what Glenn, that’s a very personal question, I’m not comfortable answering it,’” he said. “It’s because, I think, clients, give us permission to ask them questions in spheres where we need to know the answers.”
For clients who prefer not to get too personal in terms of their family dynamic, advisors can reframe the conversation, according to Kurlander.
“There may be challenges in the family, and it would be foolish to ignore them,” he said. “But the reality is, I believe, that family governance is actually the most optimistic thing that families do together.”
“We’re doing [this work] for the next generation and from that perspective it’s all about the future,” he added. “Even believing there will be a future, some would say, is a fundamentally optimistic point of view.”
Kurlander noted that when a family mission statement is being created, it can be difficult for parents to handle those situations on their own. “Generally, they fare best when they have people who have done it before, who have some experience doing it and helping them manage their conversations,” he said.
Charline Burgess, vice president, family governance and wealth education at Morgan Stanley, shared how in particular she engages adult children over the age of 40 in family wealth discussions.
“In that age range, what we normally do is we have an intake call and discuss where they are, what they already know and what they would like to focus on,” she said. “We would customize [the wealth discussion] and talk about what that means in daily life when you are talking with other members of the family, or how it translates to other philanthropic work they want to do.”
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