Building Healthy Relationships with Family and Wealth

Key Takeaways:

• More wealth is moving into the hands of women, increasing their financial influence. Women are aligning their investments with their values and using their resources to ensure their daughters are educated, and better prepared to meet their financial goals.

• There is a strong connection between the investment strategies of individuals and what they value. The same mission statements that companies use to stay aligned with their values can apply to families and their members to help make wealth management decisions. Philanthropy can be a helpful tool for families trying to identify and establish their investment principles.

• Developing financial literacy is an important part of the skill set that contributes to a family’s lasting legacy. But to attain meaningful and indelible results, the process must also embrace the joy of intellectual pursuit, which should be passed along to future generations.

Transcript:

Ramia: Hello, everyone, and welcome to another episode of Women in Family Business. It’s a great pleasure for me to welcome our guest today, Marina Spitzy, who is the director of Tecolote.

It’s lovely to have you with us here today to discuss what I think you and I both deem to be an extremely important subject, which is to explore family, and particularly women’s relationship with wealth. Do you remember how your family taught you about wealth and how that conversation was broached by your parents and your relatives?

Marina: To answer the question, shortly, no, we did not speak about money. Money was not something you talk about, it’s private. But there are messages around wealth that we are sometimes conscious of and sometimes subconscious in projecting to our children, and they permeate family lives.

So, in my family growing up, there was one really strong message. There were a few, but one really stood out, and that was responsibility, and it was a broad definition of responsibility. There was, on the one hand, our responsibility to the community, to give back whether it was in cultural heritage or in healthcare. We were deeply involved. They were issues that were important to us as a family. They gave us an identity, not in the public – as a family. It was a personal identity of things that we shared and that mattered to us and that we wanted to support and grow.

Then on the other side of responsibility, there was the personal side of we’re responsible to each other, for what we have, to future generations. We’re stewards. We are privileged to have these things and we need to appreciate it, but we need to protect it and look after it. That wasn’t the same as being given work ethic, which is interesting. That was missing from it in a way. It was a different kind of responsibility. Then we suddenly got … I was 10. My siblings and I were all different ages but started to get very different messages around wealth when my father died. Our father died when we were quite young and the messages we started getting were just completely different. It was, “You’re looked after. This is managed.” What we saw was my mother, a 38-year-old widow, with three young children grappling with an inherited structure, trying to be informed, not being at all prepared, and having been told, “Don’t worry, you’ll be fine.”

In truth, what happened to her happens so often. As I’ve grown up and as I grew up seeing it happening to women around us personally and then in a professional context as I’ve worked with families, there are so many people, and it’s not just women, there are men, where transition is traumatic and they are just not prepared. Preparation can help so much and well, it’s vital. So, I set my company up to support these families in transition by helping them be better prepared, and to also help them understand what values they have that are important to them, that they are sharing as a family and to the younger generations. Because the more consciously we do this, the more successful it’s going to be.

Ramia: What makes it such an awkward thing to just simply prepare the next generation for the fact that, well, it didn’t come from nothing and it’s certainly not going to stay without you doing something about it?

Marina: All families are different in their problems and what keeps them together and their values. But it’s really interesting with the families that I work with how often the same words are used to describe the feelings. Expectation, obligation, questions of self-worth, privilege. So, it doesn’t matter if you’ve been told you need to join the family business or if you’ve been made to feel that you have no place in the family business. These kinds of sentiments create a burden. I think the problem comes into two main areas. Not being adequately developed and prepared on the one side, and not having the right tools for communication on the other. So, it’s not that people aren’t talking, but they maybe don’t know how to communicate, how to actively listen. An interesting Harvard Business Review report said that only 13% of families make it into the third generation. The reason isn’t management. It’s not because they don’t have good management. It’s because there’s been a collapse in trust and communication amongst each other.

So, what I really try to do with families is to help build up the individuals, their leadership skills, and leadership for no matter what position they’re going to hold in their life. That’s not just having business acumen. It’s having financial literacy. It’s having emotional intelligence. Because whether you have a family business or shared assets, families are emotional. Family issues tend to be emotional problems. Having some degree of emotional intelligence is valuable for the men as much as for the women. I think we need to make each family member the best possible version of themselves so that they know how to contribute.

Then there needs to be a forum for feedback to assess each other, to talk about what’s expected of you, to talk about your fears and your hopes, and where you need help and guidance from within this family or outside. Maybe you’re getting assessment from external people. Different families have different ways of doing this. So, I try to help families develop their leaders, whether it’s through education. I’m not the educator. It’s helping them connect with the right people and realize what they can do. Then create the governance tools that can help them better communicate. It’s a forum, it’s a family charter, it’s finding things to do outside of the family business, or realizing what their shared values are. Because it’s those families that know how to build this cohesion, they have a dynamic where the individual is important, that makes families successful over generations. It’s not about how much money they have. It’s that longevity comes from a healthy dynamic.

I think intentionality is really vital. We need to consciously decide what those goals are and we need to consciously implement it and be consistent. I think that is extremely helpful for families, to intentionally build up their skills, to intentionally talk about what values are important to them, why responsibility, why they’re working, why this business. Because that will be this thread that will connect different generations that might not even know each other. You’re inheriting something from your great grandparents. You maybe never met them. But what is some kind of common thread that you recognize and you’re proud to take on?

Ramia: You said before that the need for having this kind of education and having these discussions is equal to men and women and everything in between in the family, and I think that this is absolutely true. The fact is, though, that it seems from the outside and from the discussions we’re having and the data that there still seems to be a significant difference in how women and men are raised around their relationship with wealth and how they perceive their responsibilities, and how that also informs their work ethic or their definition of what is actually their opportunities in taking action with regards to the family legacy. Can you talk to us a little bit more about how you see that difference between the relationship?

Marina: What I think is interesting is that, certainly, I find that because more wealth is moving into women’s hands, we’re seeing them influence it more. Whether it’s how they’re buying, it’s how they’re investing, how they’re educating themselves, or asking questions, and especially talking to their peers and their children. They often use it now when talking about female investors. I don’t know if you’ve heard it, but I seem to always hear it as women don’t want more, women want better. I actually think it’s true, but I don’t think that’s just about in an investment case, that it’s just aligning their investments with their values. Yes, that’s true. But I think what it’s coming down to is that women haven’t felt prepared enough or they know that they’re insecure with a lot of issues, so they want their daughters to be better prepared. I think oftentimes they think their sons just are whether or not they’re working in finance. But really, education is important for the daughters, and I mean it is. We need to be educated and women are taking education as a way of emancipating themselves. We’ve still got a long way to go.

But I think there’s been a big improvement in our generation from our mothers to our generation, less so from our grandmothers to our mothers. So, I see that changing, that there are more groups for women to talk. Banks are increasingly speaking more about their women clients. But it’s just not there. There was this great UBS study a few years ago that 98% of widows and divorcees don’t feel adequately prepared to deal with their finances, 98%. So, even what banks are doing to prepare themselves isn’t working because 60% of widows — I love this, it’s just an extraordinary statistic — 60% of widows change their financial advisors on their husband’s death.

They have not been spoken to. They haven’t been given the right tools to inform themselves. Just like you don’t need to be a doctor to take care of your health, you can make sensible decisions. The same is true for our finances. We will need experts and we need help and support, but it doesn’t mean we can’t be sensible. So, I think that there is a lot of room to help, not just the next generation. We’re always talking about the next generation. We’re fine. We’ve studied and gone to university, a lot of us are. It’s the mothers who need support. So, I really focus a lot on making sure that … Well, of course, plenty of women are educated. That’s not my point. God, I was educated. I have two master’s degrees and I still only a few years ago started to get myself financial literacy. But I think this is really important and it’s where I really try to support families in this, developing their human potential, and so that’s with the wives and the mothers.

Ramia: I feel like there’s also a bit of hypocrisy around when women are given access to understanding the wealth of the family and all of those things. I always felt like the the typical role that’s being given, if the role is being given at all, is philanthropy or the arts and stuff like that, and we’re just going to talk about that because I actually think it’s a bit of a double-edged sword for us, isn’t it?

I want to talk to you about how you perceive, I guess, philanthropy and the arts as a means of changing our relationship with wealth, and also as a means of understanding what wealth actually means to us as a family.

Marina: My experience with both philanthropy and art, I grew up experiencing those and living in those worlds growing up. Professionally, I’m a strategist. So, I have always come in, whether it was working in politics before I started working with families, I’ve always come in as a strategist to help people figure out where they want to go and then the routes to get there and to make informed decisions. Philanthropy is, like you said, yes, for families that care about their legacy, they tend to have some kind of a contribution outside of the family. They feel like stewards. They are because they have employees, because they have land because they … for the assets that they own, collected, intellectual capacity, everything.

What I learned and experienced growing up, and it was the same, it’s what we’ve been talking about from the very beginning, whether it’s philanthropy or how we invest, it’s knowing what we value. That’s the point. It’s how we’re going to run our businesses. We might start a business because it’s a good idea and it’s a wealth generator. But there tends to become other responsibilities that are attached on to it with the success of a company, and it’s finding these values. So, a company will have its mission. Austrian made wooden furniture. I don’t know. High quality, whatever. Swiss chocolate. Companies have that mission statement. Families rarely do and philanthropy is a helpful tool to help families articulate this. It’s a place sometimes that family members are able to come and get types of experience, of leadership, of wealth management.

What I find really interesting and what’s changed certainly from when I was young to the situation now is the role of philanthropy. It’s moved from traditional charitable giving to what I think is a more intelligent philanthropy. It’s about investing in change, and that’s influencing wealth, because I think it’s come from that sense of making a difference in the world or feeling responsible and saying, “Actually, it’s also how I make money. Do I want to make money in any way in how I run my business?” Sure, reputation is important. This is why a lot of people do it in the first place. It’s not out of the greatness of their heart, but nowadays, it is changing. Consumers want it. Families are creating wealth in different ways, but we’re investing differently, and I think that’s where philanthropy can really affect our understanding of wealth.

Ramia: The critical skills to generate a healthy relationship with the family legacy, critical skills that I can acquire myself, that I can encourage others in my family to acquire, to have a normal relationship with wealth, and then also enable a normal conversation with my family around the subject of wealth, what would you say would be those skills that you would want anyone in that position to acquire ASAP?

Marina: I would say be intentional. Actively think about what it is that’s important to you and is important to your family. Figure that out and then commit to it purposefully. So, that’s number one, be intentional. Then develop your human capital. So, this is a line I learned from Maura Harvey. I don’t know if you know her, and if not, I can only recommend her for your show. Maura Harvey was actually at UBS and she left to write books to help educate children in financial literacy. She said, “Give the gift of financial literacy.” She has a wonderful series of books. Our understanding of money, our relationship with money is formed by the age of seven. So, I would say, financial literacy, and what I tell you …

Going back to your comment of all generations, we’ve spoken a lot about women needing this. I got it. I got this in my 30s because I’d been getting financial reports since I was 18 and I realized I’ve never worked in finance. So, I went and I taught myself, and I’m not saying everyone needs to do that. You need to find forums to talk amongst peers, get advice, get support, talk to people, get advisors. There are independent people out there to help you formulate this. If you want, take a course. I’ve worked with a few families. What was really interesting, there’s kind of this new trend towards setting up family offices that are really investment vehicles for people who’ve been successful or they’ve sold their businesses. But oftentimes, these people don’t have financial experience and they’re hiring great people from banks or wherever to come and manage their fund portfolio. But they don’t have financial literacy themselves. This development helps the principal as well as their spouse, as well as their children.

So, I don’t think one’s ever too old to continue developing, and there should be a joy of intellectual pursuit that we give to our children and to all of us, as well as the joy of working. So, I think those skills are really important. I think if you feel good about how you’ve developed, you’ve had the space to develop your skills working inside of the family business outside of the family business, you still need to know how to talk about it, communicate it. Get the tools to do that. Get people like me, family advisors, who are there to help, who aren’t flogging a product, to just help guide you in that process because then we’re not needed forever. We walk away and you’ve got those tools. But you need the confidence to value yourself. So, yeah, I guess those are the skills.

Ramia: I think the most powerful way we couldn’t have ended this interview. The confidence to value yourself. Of course, intentionality, developing financial literacy, having great communication, all wonderful advice here from Marina Spitzy on this episode of Women in Family Business. Marina, thank you so much for joining us.

Marina: Thank you.

[1] https://www.ubs.com/content/dam/WealthManagementAmericas/documents/2018–37666-UBS-Own-Your-Worth-report-R32.pdf

[1] https://www.bcg.com/publications/2020/managing-next-decade-women-wealth