In a Nutshell: With the backing of U.S. Bank, Ascent Private Capital Management re-imagines wealth and brings families together to achieve a shared vision for the future. Ascent aims to build financial posterity through a seamless transfer of family resources by using wealth psychology. A lack of preparation, trust, and communication among family members or business associates can make managing family wealth complicated. This is why 90% of wealth doesn’t make it past a third generation. Ascent’s strategic wealth coaches, including Amy Zehnder, are there to help families understand each other and their relationship with money, with the end goal of building a sustainable financial legacy.
The patriarch of a wealthy family was aging. He was the Chairman of the Board, the CEO, the boss. And as the boss, he maintained strict control over the family’s wealth.
Now, with grown children and even grandchildren in the picture, the family increasingly looked to the man to help plan (and hopefully secure) the financial futures of other family members.
But the man was not ready to relinquish control of the identity or the roles he had held for most of his life.
That’s where Amy Zehnder, strategic wealth coach for Ascent Private Capital Management of U.S. Bank, came in.
“It took an entire year working up to it, and then it took multiple conversations with the patriarch,” said Zehnder, who holds a Ph.D. in Psychology. “And then, we got all the family members in one room together, and had the family members each stand up and share with the dad why him being in his role is actually creating a legal situation that could come back on the family.”
Zehnder had the assistance of two facilitators — one who focused on the man and another who worked with the other family members. It was a difficult conversation for the family, but it was an essential one.
In the end, the man agreed to relinquish control and was given honorary and emeritus titles to help him maintain his identity.
“Getting the dad to finally pass the baton not only to the son but to the daughter was an amazing transformation,” Zehnder said. “It was like the whole family had been holding its breath for years, and the emotional release that happened afterward was just pure relief as well as exhaustion.”
Family dynamics play a major role in preserving assets and ideals, but at times, advisors don’t place enough emphasis on that aspect.
Ascent Private Capital Management of U.S. Bank approaches financial situations from both angles. The strategy begins with portfolio management and investments, but Ascent’s services also map the sensitive terrain of family wealth, including any unforeseen issues that may arise in the planning process.
Ascent uses wealth psychology to help individuals analyze the emotions and expectations that money can elicit. To learn more about how the practice can help families make better decisions about their financial futures, we spoke with Zehnder.
What is wealth psychology?
The study of one’s relationship with money and wealth because wealth is more than money. We all have a relationship with money that we learned at an early age; this relationship guides the majority of behaviors throughout our lives. Saying that money is more than wealth means that someone can be rich in spirit, rich in love, rich in knowledge, rich in family relationships, and have a rich social network.
What does a wealth psychologist do?
We help families understand that wealth is more than money. We help them to manage human capital, social capital, and intellectual capital, as well as their financial capital. We facilitate family meetings and retreats that offer activities focused on family legacy, values, personalities, temperaments, and family business concepts (distributions, ownership, stewardship).
At meetings and retreats, we encourage family members to share stories of how they learned the value of a dollar and expectations they have of future generations. We do governance work as well, helping families create business decision-making processes, structures, and agreements that will provide clarity for family members, owners, stakeholders, and the business entity alike.
We create forums for people to be heard and problems to be addressed, and help with succession plans to transition key roles in a family business seamlessly. We help families lean into conversations that are challenging that they know they need to have, but they don’t know how to have them. And the root behind that is that we help them seek and achieve peace of mind, if possible. Sometimes, we simply prepare the parents for these conversations, and other times we facilitate them by creating a safe space for them to take place.
Parents want peace knowing that their kids are doing well and that they’ve had the conversations that they need to have.
Why is it important for affluent families to utilize these sorts of services?
Because clarity of expectations and transparent and open communication are key to wealth sustainability. Studies show that 90% of all wealth doesn’t make it through the third generation, and the majority of that failure rate (60%) is rooted in poor trust and communication among family members. Another 25% comes from inadequately prepared heirs.
Is this service only for affluent families, or are there benefits for non-affluent families as well?
The work we do is all about honest communication, and the ability to share openly. Talking about the number one taboo topic — money — benefits families at all socioeconomic levels. All families could benefit from discussing expectations rooted in money messages.
What does a consultation entail? How does the process unfold and what should families expect?
Once a family decides to work with us, we create a baseline through a survey, interviews or both. We look for themes — what’s working and what’s not — and preserve what is working and help families find new ways to address what’s not working. Sometimes it is a matter of changing who has access to information, giving people permission to do or not do things and sharing unspoken expectations.
For family business governance work, we help families create a process, structure, and agreements. Once we have a baseline, we outline goals and priorities and then get to work. Often, this work occurs through family meetings, retreats, board meetings, and individual coaching.
What are some of the most common issues you find families have when it comes to effectively managing their wealth?
There are a lot of assumptions that can lead to conflict if not discussed. Just because something worked a certain way in the past doesn’t mean it will work in the future. People don’t know what they don’t know, so those out of the loop don’t know what to ask, and those in the loop think everything is fine and that they don’t need to share more.
As a coach, I don’t see conflict as a bad thing. Conflict is an opportunity to identify where you need to explore further to either get some understanding, seek additional conversations, or create a policy.
Parents think to themselves, “my kids get along great, and they’re smart, so when we’re gone, they’ll be able to figure it out and stay together as a family.” Above everything else, parents want their kids to get along, but this is often not the case. All too often, after the second parent passes, the scorecard comes out and the power grab begins. Knowing this, some parents say they would give it all away if it would keep their kids close. Parents want the wealth to enhance their children’s lives, not destroy them. I often hear parents use Warren Buffet’s quote: “I want them to have enough money to do something, but not enough money to do nothing.”
The most challenging thing I find in working with these families — and the biggest thing they have working against them is time — finding time to get together and share information.
Planning Now Can Mean Security For Generations
As families work to manage multigenerational wealth, they often focus on finances. Ascent knows that a family dynamic can be a much more complicated aspect of wealth management, and helps drill down into those issues through wealth psychology.
Ascent advisors help families fully understand their relationships with money and each other. Wall Street can certainly affect a financial legacy, but as Ascent knows, open and honest family discussions can also have a lasting impact.