Two of the thorniest issues advisors face are next-gen problems. The first concerns clients. Research shows that the heirs to a primary client often change advisors after that primary client's, well, death.
The second problem is the future of their advisory firms. How do the founders of firms find successors without changing their own unique business and service models or selling out?
It turns out that Intercontinental Wealth, an RIA with an affiliated broker-dealer and other service offerings based in San Antonio, Texas, has found one solution to both of those problems.
How? By counting three father-son pairings among their 20 employees in their headquarters and among staff that serve their South American and Mexican clients.
The president of Intercontinental, Charles Lutz III — known as Charlie to all — and his son Howard Lutz are one of those pairings.
Charlie explains that he learned early in his first career (more about that later), as did Howard, "how intimate a subject money is" to people. As one of the most intimate issues, he notes how difficult it is to talk to children and grandchildren about money.
"It's amazing" how many families don't share their thoughts about money and wealth creation, he says, which is why "some families need a mediator" to jump-start those conversations.
Thus Intercontinental's parent-child advisory teams, which includes co-founder Isidoro Korngold and his son, Kenneth, and another pairing that focuses on the Mexican market.
"We're modeling for clients," Charlie says, the benefits of speaking frankly about money among different generations of a family, which can become even more valuable to the many business owners in Continental's client base. That "walking the talk" encourages clients to bring their children into the advisor-client conversation, he says.
It also would seem beneficial that the wealth-creating client's children could relate better to an advisor who is closer to their own age, but when Howard Lutz is asked if he has to use a different language or approach to speak with those younger people, he demurs. "Each situation is different" when it comes to speaking with different family members, he points out.
As with any client interaction, "the language or sophistication level could differ, which is completely independent of their age." But Howard believes that the multi-generational team's ability to relate to different members of the same family "absolutely enhances the overall experience" for clients.
Charlie adds that while he may not overtly try to instruct the younger members of a family, he finds himself bringing them into the discussion, asking them questions and seeking their opinions.
The benefits of that approach, says Charlie, is that the 'kids' become more interested in the services the firm provides, which in turn "pleases their parents."
Back to the Future
When asked what differentiates Intercontinental from its peers, Charlie Lutz doesn't first mention the many non-U.S. clients the firm has, but rather its client-service team approach: each client has an advisor, a portfolio manager and an operations specialist. While that's a standard answer, Charlie admits, he clarifies it with a non-standard answer.
