Multi-Gen Planning: Walking the Talk

Two of the thorniest issues advisors face are next-gen problems. The first concerns clients. Research shows that the heirs to a primary client often change advisors after that primary client’s, well, death.

The second problem is the future of their advisory firms. How do the founders of firms find successors without changing their own unique business and service models or selling out?

It turns out that Intercontinental Wealth, an RIA with an affiliated broker-dealer and other service offerings based in San Antonio, Texas, has found one solution to both of those problems.

How? By counting three father-son pairings among their 20 employees in their headquarters and among staff that serve their South American and Mexican clients.

The president of Intercontinental, Charles Lutz III — known as Charlie to all — and his son Howard Lutz are one of those pairings.

Charlie explains that he learned early in his first career (more about that later), as did Howard, “how intimate a subject money is” to people. As one of the most intimate issues, he notes how difficult it is to talk to children and grandchildren about money.

“It’s amazing” how many families don’t share their thoughts about money and wealth creation, he says, which is why “some families need a mediator” to jump-start those conversations.

Thus Intercontinental’s parent-child advisory teams, which includes co-founder Isidoro Korngold and his son, Kenneth, and another pairing that focuses on the Mexican market.

“We’re modeling for clients,” Charlie says, the benefits of speaking frankly about money among different generations of a family, which can become even more valuable to the many business owners in Continental’s client base. That “walking the talk” encourages clients to bring their children into the advisor-client conversation, he says.

It also would seem beneficial that the wealth-creating client’s children could relate better to an advisor who is closer to their own age, but when Howard Lutz is asked if he has to use a different language or approach to speak with those younger people, he demurs. “Each situation is different” when it comes to speaking with different family members, he points out.

As with any client interaction, “the language or sophistication level could differ, which is completely independent of their age.” But Howard believes that the multi-generational team’s ability to relate to different members of the same family “absolutely enhances the overall experience” for clients.

Charlie adds that while he may not overtly try to instruct the younger members of a family, he finds himself bringing them into the discussion, asking them questions and seeking their opinions.

The benefits of that approach, says Charlie, is that the ‘kids’ become more interested in the services the firm provides, which in turn “pleases their parents.”

Back to the Future

When asked what differentiates Intercontinental from its peers, Charlie Lutz doesn’t first mention the many non-U.S. clients the firm has, but rather its client-service team approach: each client has an advisor, a portfolio manager and an operations specialist. While that’s a standard answer, Charlie admits, he clarifies it with a non-standard answer.

“We enjoy our clients a great deal,” he says, and argues that the firm’s enjoyment of its clients is “evident in everything we do.” That includes the rewards of working not just with clients who are the creators of their wealth, but also the “joy of working with their children and grandchildren.”

Another differentiator that might not be obvious to clients is the firm’s culture, which promotes regular and “earnest internal debates” about the direction of the company or the services it might offer. Those debates are leavened with the opinions of multiple generations in the firm, all of which are valuable because “we don’t think alike.”

As suggested above and in common with many other advisors, being an advisor was not Charlie Lutz’s first career. He had a 35-year banking career which ended in 2004 when JP Morgan acquired Bank One, for which he served as president and CEO of its operations in central and south Texas.

As anyone who has worked in the corporate world would understand, as Lutz’s banking career progressed he found himself with more administrative duties but fewer client interactions. The chance to reverse that arc attracted him to Intercontinental, which was founded in 1981 by Chairman Isidoro Korngold and CEO John Kauth primarily to provide lending and other financial services to Latin American customers.

Having shared community and business relationships with the firm’s principals, Lutz joined Intercontinental as COO in 2005 and was named president in 2013.

One of his roles was to build up the domestic-client business at the firm, which he has accomplished with Intercontinental’s previous president, Mickey Roth. But he also was happy to return to his future by working directly with clients, now with his son at his side, literally and figuratively.

About the Advisor

The Advisor: Charles D. ‘Charlie’ Lutz III

The Position: President

The Firm: Intercontinental Wealth Advisors, San Antonio, Texas

The Technology: Advent for portfolio management; SS&C’s Salentica for CRM “We’re looking to add iPhone apps through our [newish] relationship with Schwab.”

The Partners: Pershing (Lockwood) and Schwab for custody, clearing and investment management

BNY Mellon for its mortgage and other lending solutions Law firms and accounting firms in the community Impact Communications for press and public relations “Our profile in the community is very important to us. We’re mindful of being observed doing positive things that are moving the community forward.”

James J. Green, a former editor of this magazine, is editor of Jamie Green Reports, an advisor-focused writing, editing and shepherding service. He can be reached at jxgreen0@gmail.com.