What’s your legacy? It’s about more than money and wealth transfer!

How much is enough?

Tif joined with Genene Wilson to talk about legacy, leadership, success, purpose, impact, wellbeing and connection. They also talk about the value of education and financial literacy, and how the experience of working with a team of experts will improve outcomes for people across a range of areas of their life. Tiffany highlights some of the key trends she is seeing from her work with families.

Listen to the episode below:




Values are the foundation of our lives

Values are the foundation of our lives

Why understanding values is important

Values shape our purpose, influence our behaviour and guide our decision making. Our values form the basis of our attraction to certain people, to certain types of work, where we choose to live and how we spend our time. Values are the foundation of our lives.

Understanding our values helps us understand who we are. ‘Without knowing who we are, we tend to have particular trouble coping with either denigration or adulation. If others decide that we are worthless or bad, there will be nothing inside us to prevent us from swallowing their verdicts in their entirety, however wrong-headed, extreme or unkind they may be.’ School of Life

Consideration of our values builds self-awareness. The purposeful act of identifying our values surfaces our feelings, reactions and preferences. When we discuss our values with the people closest to us, we form a greater understanding of why we act the way we do. In a family setting, a conversation about values is a powerful way of understanding each other and the dynamics within the family. This process builds empathy and compassion. When family members take the time to identify and talk about their values, it often re-affirms how much they all have in common.

Challenges

There are significant benefits from identifying our personal values and triangulating those values with our family. However, the process must navigate some challenges. The challenges we encounter most often are:

  1. Complexity of our values
  2. Motherhood and apple pie
  3. Fear of judgement

Let’s look at these in more detail.

Complexity of our values

Complexity emerges in two ways. First of all, not all values are equal. There are often a handful of values that form our true North. These core values motivate us and guide us. They are the last thing to compromise when we make tough decisions. Some may be higher order values such as serving others. These are aspirational values we believe are important and want to evolve towards. Some values simply bring us joy. The challenge is it is not immediately obvious which values are which. Working it out takes time and reflection. It takes the assistance of those who love us and a guiding hand from those less emotionally involved to draw out examples and help us answer these tricky questions.

Secondly, it’s often challenging to distinguish our personal values from the umbrella values of our family, our peers and the society we live in. We internalise the values our family pass to us. Often parents will communicate values directly (and repetitively) – ‘clean your teeth’, ‘eat your vegetables’ (physical health) – ‘stop fighting with your sibling’ (peace). Values are communicated deeply through the stories parents tell. When they say ‘there are children in the world who don’t have a home to sleep in / food to eat’ they are encouraging their children to demonstrate empathy, gratitude and compassion. Values are inherited through the actions parents take, their habits and routines (exercising, socialising, reading, meditating, praying). Actions reflect our values, because actions don’t lie.

More critical are the things that are rewarded. The celebrations, the praise and punishments cut through to the values that are truly important. Parents are hard-wired to pass on their values to their children. We see this in the way that parents critique:

  • appearance
  • manners
  • grades
  • ideas
  • independence
  • religious engagement
  • sporting achievement
  • wealth

 

Children inherently sense which values really matter to their parents. They know what gets rewarded and what gets ignored.

Outside of the family, the societal norms we are exposed to – schools and social peer groups, the generation we belong to, are a strong influence. It is the reason 2nd and 3rd generation immigrants often act differently to their parents and grandparents. It accounts for millennials placing a greater value on acceptance, diversity, nature and sustainability.

More subtly, we are influenced by the cultural backdrop of the place and culture we grow up in. As an example, consider the values that are most commonly associated with Australia:

  • Democracy
  • Enjoyment of life
  • Fairness
  • Friendship
  • Humour
  • Resilience
  • Outdoor recreation
  • Tolerance

 

If you grow up in Australia, these values may or may not resonate with you, but in some they will have an influence. These ‘Australian values’ are positive, but society can equally reinforce values that cause life dissatisfaction. Status, appearance, conspicuous consumption may not be the values we want to aspire to, but they are reinforced daily though the media, in advertising and on our social media feeds.

When we consider this myriad of influences, it is challenging to then sit with a blank piece of paper and quickly write down ‘my values’. To land upon the values that makes us unique. It is equally hard to know which values sustain us and where we are reverting to values from an inherited or socialised sense of duty and conformity.

Motherhood and apple pie

Consider the following list of values:

  • Love
  • Connection
  • Purpose
  • Acceptance

 

It’s hard to argue with a list like this. It is compelling because love, connection, purpose and acceptance are fundamental human desires. The challenge is that, however true the list might be, it doesn’t give us much to work with in understanding our decision-making processes. We need to know what sets us apart, what makes a family function in a particular way. In our experience, once we start to dig a little deeper, we tend to find that even though there are consistent themes, no individual or family has exactly the same set of values.

Fear of judgement

We want to fit in, to be accepted. So, when it comes to discussing our values, it is sometimes easier to tell people what we think they want to hear. We pick the values that we think represents us well, that makes us look nice, rather than being honest about what is important to us. Our values are so connected to the values of our parents and our friends, we think we know what is important to them. This often can be what gets reflected in our responses.

This is particularly acute where there is a lack of trust or the purpose behind a values discussion is not transparent. When people are defensive, they tend to play it safe. They don’t go high or low on any one cluster of values, so they don’t stick out in the group.

Approach

In our experience, there are a few ways to overcome these challenges:

1. Framing

As with most sensitive conversations, it is fundamental to establish ‘why’ we are looking at values at all. What is the purpose? What do we hope to get out of it? How will we use the information? Is it anonymous? This framing needs to come from multiple sources; from any 3rd party facilitation and from family leaders.

Ideally, the identification of values is framed amongst a broader set of objectives. If the process is done well, it should form the centre of family decision making processes. We typically see families use their values to guide philanthropy and investment decisions, governance frameworks and conflict management protocols.

Whilst it is not possible to fully de-construct our values from those of our family, friends and society, it is useful to frame the question about our values from different angles. So, what values do our parents hold? What do we have in common? and where the differences? How do we react to the values attributed to our country?

We need to reflect on what personally makes us happy. What brings us joy may not be the same as what we think is important. Framing the conversation in different ways helps us to approach the topic from different angles.

2. Space and time

When we consider our values, we need to trust our intuition. At the same time, we need to give ourselves some space and set aside time to reflect. We encourage people to clear their minds through meditation, prayer or exercise. It is important to eliminate distractions; phone, email, social media.

As you consider which values resonate, think about how you spend your time and why you prioritise certain things in your life. How you act and what you celebrate will give you the greatest indication of your underlying values. We ask people to reflect on the values of their parents, but also their mentors and role models.

We have found these questions bring greater clarity to the process and form the basis for a richer discussion.

3. Conversation

The process of identifying values without discussion and debate becomes an academic exercise. It is the conversation to draw out what our values mean and how they influence us that brings meaning.

The identification of values is therefore simply a starting point for a coaching conversation, a team workshop or a family meeting. The purpose of these conversations is always focused on personal growth and self-awareness. Whilst our values shift over time and adapt to different life situations, it is unrealistic to assume that we can convince our family to adopt or shift their personal values. Our core values are strong. Attempting to influence values, inevitably creates conflict. If we lead the process with care, we can better understand why the members of our family act the way they do. This is a huge benefit that can build significant self-awareness and transform the dynamics within any family.

 
In summary, values are incredibly powerful and understanding them has huge benefits individually, as a collective family or team. There are some important challenges to be aware of that can de-rail the process. These challenges can be managed effectively with the right intent, a good structure and built around a transparent, supportive conversation.




Are you ready to turn uncertainty into growth?

It may seem strange to be talking about growth in these uncertain times. In fact, now is the perfect time.

Amongst the havoc wreaked by COVID, it’s been heartening to see some positives emerge from the pandemic: a strive for greater connection; a surge in community spirit and solidarity.

The crisis has given us cause to stop and reflect on how we live; to examine what really matters to us as individuals and families; to question whether we’re living by our values. As we face increased uncertainty, now is the time to shift our focus to growth and building a confident future for ourselves and our families.

Are you ready to turn uncertainty into growth?

 




The Rockefellers: A Model for Family Stewardship

“If the values weren’t lived, the words wouldn’t have had an impact,” David Rockefeller Jr. said. “So I think the family has tried its best to live those values, to whom much is given, much is expected.”

The Rockefeller family is one of the oldest and most prominent family dynasties in the US. It is also one of the most discreet. By many measures the family has been incredibly successful. The Rockefeller foundation has celebrated 100 years and the family has stewarded a fortune of over $11Billion.

Now entering into its seventh generation, the descendants from the original wealth creator, John Davison Rockefeller (JDR), come together at least twice a year. The family has stayed together and feels like a family. It has done so without the scars of family feuds or lawsuits.

The writings, anecdotes and stories of JDR’s life provide many clues as to how such a strong legacy was built. Like all successful families, the legacy comes from clear purpose and a strong set of values. So, how might the purpose and values chapters of the Rockefeller Family Charter read?

Using many of JDR’s original ideas, we’ve attempted to piece them together.

‘Singleness of purpose is essential for success in life’, JDR

For many successful individuals, philanthropy denotes a level of success, the culmination of a lifetimes work. The idea that once there is enough wealth to share around, it is time to consider how to contribution to something greater. For JDR, it was a core belief long before there was any wealth to speak of. When he started out at 18, earning $3.50 a week as a clerk in Cleveland, he gave around 6%, sometimes more, of his income to charity. By time he was 20, he was consistently giving over 10%. David Rockefeller Jnr recalled giving to charity with his very first allowance, aged 10.

Whilst he was driven to succeed, the purpose for JDR was not the accumulation wealth and he said so explicitly. ‘The man who starts out simply with the idea of getting rich won’t succeed; you must have a larger ambition.’ This larger ambition remains central to the family today. The Rockefeller Foundation’s mission, unchanged since 1913, is to promote the well-being of humanity throughout the world. This mission aligns JDR’s essential belief that, ‘having been endowed with the gift I possess, I believe it is my duty to make money and still more money, and to use the money I make for the good of my fellow man according to the dictates of my conscience.’

The mission drives many of the family’s ventures and its decision making. The Rockefeller Brothers Fund is an example of pioneering impact investment. The strength of the family mission and the extraordinary family tradition of putting family wealth to work in service of improving the world, made the process of implementing a mission-aligned impact investing program that much easier. It is the same mission that has driven the divestment of all stocks related to oil and gas.

 ‘They have not only conveyed wealth in their family, but they have conveyed values, and that is a real achievement.’ Mort Zuckerman

Purpose is clearly a key element to the success of the family. However, when you look at the challenges experienced by the Carnegies, the Vanderbilt’s (dynasties born out of the same era as JDR) there must be more to the story than ‘purpose’ or ‘mission’.

To understand this, we need to look at values. ‘If the values weren’t lived, the words wouldn’t have had an impact. I think the family has tried its best to live those values, to whom much is given, much is expected.’ David Rockefeller Jr.

Here is a guess at what values JDR may have espoused:

1. Practice discipline and ritual

JDR was a bookkeeper by trade and paid meticulous attention to the detail of his accounts throughout his life. JDR tracked all of his spending and saving. He kept a strict account of his finances in a small notebook he dubbed ‘Ledger A.’ Even as an old man, he kept it in a safety deposit vault like a sacred relic. Discipline and ritual mattered a lot to JDR and it is important to the family today.

They meet as a family twice a year for the family forum. In June, at the Playhouse on the grounds of the historic family estate in New York’s Hudson Valley or in New York City over Christmas. At Christmas there are often more than 100 in the same room for a Christmas lunch. Ritual is built into the process as well. When you are 21, you get invited to the forum where you get tell a little about yourself and get welcomed in. The idea is to say you are part of the family.

Not having an operating business to either run or divest has helped to create a stable foundation for the family to work from. However, there are a number of informal arrangements to maintain harmony. The non-solicitation rule for example, that ­prohibits family members from tapping each other for their personal charities.

 

2. Live within your means

‘I have never known a playboy Rockefeller.’ Henry Kissinger.

Even after accumulated massive wealth JDR continued to live frugally relative to his peers. He bought and built large houses, but they were always modest compared to what he could have afforded.

The family never flaunted its wealth. JDR Jnr was squeamish about putting his name on Rockefeller Center as he thought it ‘flamboyant and distasteful’.

Today, the Rockefellers make a conscious effort to teach their children to preserve their money and use it to improve the world. The key lesson is that ‘touching capital is a cardinal sin and you should try to live on your income’.

 

3. Continue to learn and grow

JDR was passionate about learning through his everyday conversation and taking insights from those around him. As the head of Standard Oil ‘he conversed not only with those overseeing the operation, but with the rough wildcatters who were actually doing the drilling.’ He was famous for saying very little, preferring to listen to others than dominant the conversation. ‘It is very important to remember what other people tell you, not so much what you yourself already know.’ JDR

Education is synonymous with the Rockefeller’s. JDR founded University of Chicago and Rockefeller University. The Rockefeller Foundation continues to support education as a backer of the London School of Hygiene and Tropical Medicine, and the New School in New York. In 2008, David M. Rockefeller made the largest gift by an alumnus in the history of Harvard University, giving $100 Million.

In 1911 Standard Oil was divided into multiple publicly listed entities which allowed the financial assets to be easily passed on to future generations by way of a series of comprehensive trusts. In addition to the trusts, there are a series of committees and other structures that provide a means to connect and educate a family that spans a massive 242 descendants.

A close colleague who once sat in investment meetings with David and Laurence Rockefeller recalls an important ritual where each trustee writes a letter to the family board outlining how they put their distributions to use. Using the principle ‘invest, save, spend, give’ helped each Rockefeller be an effective philanthropist and steward of their personal wealth.

 

Further reading

Despite their longevity and significant impact, there are limited resources or case studies on the governance and structure of the Rockefeller family. The resources below provide some further context on the family, the Rockefeller Brothers Fund, including several articles on the values and beliefs that shaped JDR.

https://www.ft.com/content/1abecaa8-1867-11dd-8c92-0000779fd2ac

http://theimpact.org/wp-content/uploads/2016/09/TheImPact_RBFCaseStudy_2016lowres.pdf

https://www.economist.com/business/2008/05/22/a-family-affair

https://www.artofmanliness.com/articles/john-rockefellers-keys-to-success/

https://www.cnbc.com/2018/03/26/david-rockefeller-jr-shares-4-secrets-to-wealth-and-family.html

 




Interview with our client David Orford

David Orford talks with FS Private Wealth about the work we are doing to bring his family together and steward its assets.



 
You can read the article online here




Tiffany Jones featured in the latest episode of “Inside the Rope”

Listen to Tiffany talk about family leadership with David Clark from Koda Capital, in the podcast series ‘Inside the Rope’.

Tiffany discusses the challenges of managing wealth across generations with one of Australia’s fastest growing independent financial advice firms




Podcast Episode 7 – With Jenny at the Family Assembly

This episode comes from the kitchen table at a country farm in NSW. It captures the reaction of a family coming together for their 1st family assembly.

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Podcast Episode 6 – At the kitchen table with Arun Abey

How much is enough?

In this episode I spoke with Arun Abey. Having authored the book ‘How much is enough’ and advised clients in relation to wealth for many years, Arun has deep insight into wealth, purpose and happiness  He has a great perspective on how we need to educate and prepare our families to maximise wellbeing.

Listen to the episode below:




Family Self-Assessment

When we start working with families, we ask them to review the structures they have in place against the constructs that successful families adopt. We do this by means of the below list of questions.

An interesting way of approaching this review is to go through the list yourself, answer Yes or No to the 20 questions, and then get other members of your family do the same.

Seeing whether or not you all come up with the same answers will give you an insight into where you need to start the conversation and align the family.

  1. We have a plan for the transfer of our family resources (wealth, homes, businesses, rituals)
  2. The recipients in our family know what resources they will receive and when
  3. Everyone in our family has a way to contribute to family affairs
  4. There is a documented succession plan for the leadership of our family entities / businesses
  5. We make space within our family for conversations about wealth, values and purpose
  6. Our family actively encourages and supports entrepreneurship
  7. There is a defined purpose that guides the use of the resources in our family
  8. This purpose been shaped by and agreed across the family
  9. Our family encourages philanthropy
  10. Our philanthropic giving is aligned to the interests of the whole family
  11. We have family council meetings and hold an annual family assembly
  12. We discuss where potential conflict exists between members of our family
  13. There is an agreed and structured approach for our family to resolve any differences
  14. Our family has robust and effective practices / protocols
  15. We have a family charter / guidebook
  16. We have an agreed set of values
  17. There is a strategy that determines how the family’s resources will be sustained into the future
  18. Our family has an education plan to develop leadership and financial literacy
  19. Our family seeks out formal and informal mentoring opportunities
  20. The wisdom and stories of elder family members is preserved and shared

How many items could you answer Yes to?

Regardless of your score, there are always ways to initiate or enhance family conversations. Consider the recommendations below based on your results.

0-7 | High Risk

Mitigating the risk in your family is all about starting the conversation. Talk about the resources in the family and the interests and goals of all family members. Capture your family purpose and values in a family charter, along with some basic protocols that guide how you plan to come together as a family. When you are starting out in this way, it’s a lot to take on by yourself: the roles of leading the conversation and contributing to the conversation require a different focus. Get help to create an open, flowing dialogue that brings your whole family along with you.

8-15 | Medium Risk

You are well on your way and have established some important structures to safeguard the future of your family. To continue developing, have the tough conversations that tackle potential conflict, embed your family story and grow entrepreneurial and philanthropic endeavours. Ensure that everyone has a clear understanding of their role and a chance to contribute to the family strategy.

16-20 | Low Risk

Congratulations. You have initiated many of the activities that will set your family up for success. Focus on fine-tuning your family system and encouraging independent entrepreneurial ventures. Assess the extent to which your family demonstrates stewardship by giving members of future generations the chance to lead and fail.




Podcast Episode 5 – At the Kitchen Table with Paul Heath

This podcast is a way to share stories from families we support and our family advisor partners. These stories share a common theme – a critique of the idea that to be wealthy is not just about how much money you have but how you put your family’s resources to use for future generations.

I partner with Koda Capital to deliver leadership and inter-generational wealth for families and have worked with the Koda CEO Paul Heath for over 10 years. In this episode I sat down with Paul to talk about the value of independent financial advice and how the industry will transform over the next 10 years. I particularly enjoyed hearing how families have created stewardship. The successes and the failures.

Paul has a significant amount of experience and the lessons he shares from these families are really insightful.

Listen to the episode below: