Succession Psychologists

March 17, 2014, 5:12 P.M. ET
Succession Psychologists
By Robert Milburn
What do bankers do to help a take-no-prisoners entrepreneur pass the reins on to his or her younger family members? If the clients are at Abbot Downing, a Wells Fargo unit for ultra-wealthy clients with $37 billion in assets, the bankers increasingly call Arne Boudewyn, head of the firm’s Family Dynamics and Education office.
Boudewyn, a clinical psychologist, works closely with super wealthy clients on their family governance issues; how to pass on wealth to the next generation in a healthy way; their interpersonal family relationships; and articulating the family’s long-term goals.

Most big banks have a Boudewyn on call – for good reason. Over the next 30 years or so, more than $30 trillion will pass from Baby Boomers to their heirs. If the bankers don’t bond with the young heirs and provide them with much-needed services at an early stage, then it is likely the next generation will simply walk from the bank as soon as the aging wealth-creator dies. With so much at stake, banks are getting better at proactively helping families resolve their interpersonal issues before a botched succession plan blows up everyone (including the banker).
Consider Boudewyn’s work at Abbot Downing. He recently led a 3-day family retreat for one prominent billionaire family that was feuding. The patriarch had carefully amassed wealth in the farmland and construction business, but could not reach agreement with the family, as he advanced in age, on how to transfer family leadership. So Boudewyn got 44 family members – four generations ranging in ages from five to eighty years old – to attend an Abbot Downing retreat.
“What made this family successful was their dominant, hard-charging style,” Boudewyn said. But that did not result in a climate where genuine family discussions could take place. “We often hear from families like this that senior members are waiting for heirs to step up and fill leadership roles. Meanwhile, the next generation says they either don’t know how to participate or there is no room for them to.”
To break the impasse, Boudewyn quickly separated the family into different ages. Adolescents were put through financial fluency education, teaching them how to analyze risk and manage investment portfolios, while children under eleven years old were taught about philanthropy by stuffing bears for donation to a local charity.
Meanwhile, in nearby rooms, Generation 1 and 2 were given a test that Boudewyn calls “the strength finder,” essentially a personality assessment that helps identify different aptitudes and talents. “The family realized that their dominant communication style was steamrolling each other’s ideas,” Boudewyn said. As a result, “the family wasn’t having a lot of fun.”
In short, the family’s biggest strength was also their biggest weakness. How to hit the reboot button on the family’s dynamics? Non-blood family members were typically excluded from any business discussions, but Boudewyn had the in-laws also take the survey. Across the board, be they male or female, the spouses were typically the rock of their relationship, had more likely focused on long-term planning, and had brought new life and joy to the family. A perfect counterweight, in other words, to the blood members’ hard-nosed jockeying for position. So while the family heavyweights were instrumental in amassing wealth, it was their spouses or in-laws who played a subtle, important role in the family’s well-being.
It was a revelation to the family and they collectively decided a more inclusive discussion would help in the leadership transition. “The family created an internship, to get the next generation involved, brought one of the in-laws into the family business and is considering another,” Boudewyn said.
Still a long ways to go, of course, but that’s precisely the point. A healthy succession from one generation to another is built out of many such small but profound insights, and the wisest bankers are finding they need trained staff on hand to help bring about such revelations.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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