Keeping it all in the family

It’s not uncommon for young advisors to join their parent’s advisory firm. Exposure to the family trade can give insight into the quirks and perks of the business, giving these rookies an advantage over their peers.

But like other new advisors, advisors who join a family firm still need mentoring. That is where the senior family members need to manage expectations, both those of their children and those of firm members who are not family members: by addressing concerns about special treatment for the adult children at the outset, potentially damaging misunderstandings can be kept to a minimum in the future.

Take these issues into consideration when integrating family members into your practice:

1. Setting expectations
Whether you decide on a formal or informal arrangement to manage the transition and performance expectations, it’s important to outline the details. Both parties should have a sense of how the process will work.

John and Rebecca Horwood jointly run their Toronto advisory firm, now under the Richardson GMP Ltd. banner. Their two daughters also work with them, as well as two associates who are not family members. The daughters were held to the same standards as the other two advisors with no previous connection to the firm during the transition to become full-fledged advisors, John Horwood says. “Once they reached the critical mass, usually $100 million in assets, we pushed them out of the nest and let them loose,” he says.

Michael Silicz is an advisor at Winnipeg family firm, Silicz Birdsall Advisory Group, associated with National Bank Financial. He joined the firm two years ago, after finishing law school in 2009 and working as a lawyer. Silicz and his father, Walter, had an informal understanding of how his progression in the firm would be structured. They didn’t set any appointments to check in with each other, but it was implied that the younger Silicz would gradually take over working with the firm’s younger clients. He was also expected to take the initiative in many areas. Indeed, a lot of his learning was “on the fly, in the practical sense,” says the younger Silicz.

2. Office dynamics
Children who join the family business may have an advantage, but they still have to navigate office dynamics. They may also have much to prove to their parent’s colleagues in the industry, who may even have known them as children. And that, in itself, can be its own kind of hurdle.

“They had a disadvantage in some ways,” says Horwood. “They had to prove themselves to others who would be watching them closely.”

Transparency becomes ever more important in such situations, because “it would be disruptive [to others in the firm] if you seem to favour them,” Horwood adds.

And starting out in a lower level, support capacity can be helpful. Silicz helped out at his father’s office as a teenager, and was welcomed into the fold when he joined as an advisor. But he found it challenging to resist taking on his old tasks.

“Because I’ve been helping out for 10 years [with computers], it was sometimes easy to go back and do [other] jobs,” he says, adding that you have to be mindful of sticking to your responsibilities.

3. Marketable skills
Young advisors joining an established firm often find themselves taking on the next generation of clients. Working with millennials became a starting point for Silicz.

Think strategically about what contributions you can make, says Silicz. He drew on his experience as a lawyer to forge connections with clients. “I just tried to participate as much as possible,” he says. “I’m able to speak to macroeconomic and geopolitical [issues]. That’s how I would jump in, and slowly I was in charge of client accounts.”

4. Boundaries
Leave work behind when you’re outside of the office, and vice versa, says Horwood. Letting go in other ways is also important for the senior family member. Setting boundaries around work also extends to embracing the process of delegating certain key responsibilities to your children.

“We have to allow each other space, and I have to feed responsibility and control to the next generation and trust them,” he says.

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