Properly protecting assets to fulfill a family’s wishes and having the right documents implemented is what separates advanced planning from theory, as we discussed last month (January 2008, “Protecting Family Assets”). Advisors must ask difficult questions to understand a family’s complex emotional dynamics–in addition to examining the spreadsheet of their assets. The advanced planning team then takes these two batches of information and collaborates on solutions and implementation. For those advisors who primarily practice solo, high-performance collaboration may at first appear to be a rocky, contentious path to reaching a client’s goals. An advanced planning team of experienced collaborators brings just the opposite, however: thoroughness, speed, and efficiency–even as it debates the wisdom of various solutions.
Surprises of Collaboration
A survey of experienced collaborators from many occupations (The Ideal Collaborative Team, Mitch Ditkoff, Tim Moore, Carolyn Allen, and Dave Pollard, 2005), explored how they believed collaborations worked. In a truly collaborative team, three characteristics of team members drive client-centered solutions:
- Having enthusiasm about the subject;
- Being open-minded and curious;
- Speaking one’s mind even if it’s an unpopular viewpoint.
Several additional personal traits–not experience or training–rated as very important: candor, courage, timeliness of follow-through, listening skills, and self-management. Mitch Ditkoff, one of the researchers, made an interesting comment about the tenor of good collaborations: Since collaborations are often like marriages and go through various ups and downs, it is essential that the collaborators enter into the relationship with the kind of attitude that can weather the roller coaster ride of the sometimes chaotic and challenging creative process.
The survey also supports the empirical observations of Arthur Bavelas, a principal in my firm, Advanced Planning Group. Bavelas has a great deal of collaboration experience. He noted that advisors with technical proficiency don’t necessarily make good team members. Most advisors with a technical focus have difficulty asking the hard questions about the desired outcome of the planning process and focus more on crafting legal documents. If that’s the case, the other members of the team must step up to ask the family to identify the desired outcome of the proposed work and to explain the interpersonal relationships among siblings and the parents and grandparents.
Seven Steps of Collaboration
Al Gibbons of AEG Financial Services in Phoenixville, Pennsylvania, is a highly respected expert on advanced estate planning techniques with many years of working with advanced planning teams. In my July 2007 column, he described a movie-making model to explain how ad hoc advanced planning teams collaborate on a case for a high-net-worth client. “If I were to make a science fiction movie, there are special talents that I need to bring to the set in order to accomplish that goal, and so we would assemble that team,” he observed. “We’d make the science fiction movie and then we disband. The next month, I’m doing a documentary, and that requires a whole different series of challenges than the first one.”
Looking at the collaborative process in greater detail, Gibbons outlined the seven steps of high-performance team collaboration in estate planning in an article in the Journal of Practical Estate Planning. The insights he offered also easily extend to advanced planning beyond estate planning.
Step 1: Agree on the Process
Since advanced planning encourages transparency, discussing the process itself with the client is the chief focus of the first step. The advisor with the most established relationship with the client–and most likely the first professional to whom he or she turned for advice about the current planning problem–typically obtains agreement on how the process will unfold. This lead advisor, who takes the role of project manager, at least initially explains what type of additional expertise might be required to create solutions for the client’s concerns.
Step 2: Assemble the Team
After the client agrees to the overall process, the lead advisor will discuss potential members–or suggest a private wealth specialist to act as a facilitator to assemble and manage the advanced planning team. This specialist maintains a list of various professionals who are top experts in high-net-worth and ultra-high-net-worth planning for life insurance, business succession, taxation, and investment management, among other areas. Depending on the client’s situation and the role of the lead advisor, expert assistance might include, for example, valuing artwork of a particular type and period, foreign and dual-jurisdiction tax issues, and creating a private foundation with a specific mission. The private wealth specialist promotes efficiency and complete implementation–two elements where traditional planning often fails.
During a conference call, team members can clarify their roles and gain an understanding of the case facts. In high-performance collaborations, advisors operate in a way that allows each other and the client to find and implement the best possible solutions.
Step 3: The Meeting
The lead advisor or private wealth specialist arranges the first meeting with the team. Before the meeting, the client should know who will attend and their role. During the meeting, the first piece of business after introductions is reviewing the facts to confirm everyone’s understanding. Typically, the attorney will summarize the wills, trusts, and any other legal documents, the insurance expert will provide details about life insurance policies, the CPA offers the tax returns, income statement, and balance sheet for reference.