040: How to Build Wealth for Families over 4 Generations

Growing Your Financial Advisory Practice | Insights for Financial Advisors, Planners and Investment Managers

For many families, the wealth-building process is one that crosses several generations. It’s just not always easy to keep everyone on the same page. However, the benefits of building on family values and past lessons is a huge advantage that family businesses can tap into.

Jamie Townsend is an advisor who recently completed his designation in the Family Enterprise Advisor (FEA) program, which focuses on helping families manage their greatest asset through continuity. Jamie works with business owners and professionals to help simplify their financial lives. He was recently recognized by Wealth Professional Magazine for his work as a Top 50 Advisor in Canada.

Listen in to hear what Jamie has to say about the challenges that family businesses face, the best ways to help, and the part of financial advising where shortcuts just won’t cut it.

What You’ll Learn in This Episode:

• Why Jamie got the FEA designation and how it has served him (2:35)
• What it’s like being in business with a parent (5:45)
• Insights gained from serving multiple generations of families (9:25)
• Why success is never a finite state (14:55)
• Why Jamie accepts new clients by referral only (17:35)
• How financial information is different from financial knowledge (24:10)
• Jamie’s advice for new advisors (26:35)

Links and Resources:

Lawton Partners Wealth Management

Quotes by Jamie Townsend:

“We are able to have an incredible impact on people when it matters most.”

“If you think about this conversation in terms of generations, you have the next generation coming up with their own energy, their own ideas, their own goals. And sometimes those align perfectly with the generation above, and sometimes they’re completely different.”

“When you spend time with someone, if they’re ultimately going to work with you, they need to get to know you, they need to like you, and then eventually they start to trust you.”

Jamie Townsend is well-versed in family business. Not only does he run a practice with his dad, but also between the two of them, they’ve worked with some families over as many as four generations. Don’t miss out on learning from his unique perspective.

Below, we’re sharing three key ideas from this episode:

• Insights gained from serving multiple generations of families
• Why success is never a finite state
• Why Jamie accepts new clients by referral only

For the rest of the episode, find the podcast on iTunes or Stitcher, or hit the link above.

Insights gained from serving multiple generations of families

Jamie’s opportunity to work with several generations of the same family has given him a unique perspective on wealth-building over decades, not just months or years.

For him, wealth building “is not a conversation that is a three month conversation or a six month conversation... It is this process of doing the right thing, following the right principles. And then you get to see the cumulative impact.”

As you might expect, the effect of compounding is especially evident over many decades. But it’s not only the dollars that have a chance to grow.

When you have a business over several generations, “it’s not just the bricks and mortars of a business that can be passed on… but it is also what the family stands for, the lessons that they have learned.”

The true impact comes from passing on the knowledge of running a sustainable business and working toward a common goal over decades. When families are able to work together in this way — something that Jamie helps them do — they gain an advantage that many businesses lack.

Why success is never a finite state

When asked what has made Jamie’s practice so successful, he balks a bit at the word “success.” It’s an uncomfortable word for him because, he says, “it sometimes means that it’s a finite moment.”

Rather than feeling like there’s a point where he’s finally made it and can now coast on his own success, he feels like his firm is always continuing to grow, always just beginning to reach a new level. This perspective has made him relentlessly pursue new ways to add value for clients.

For example, he’s brought people with different skill sets and designations to the team; as long as they share the same fundamental values, different skills mean a better-rounded service for clients. He’s also found ways to create efficiencies and introduced services to help clients with valuing and running their own businesses.

And most of all, he’s done the one thing you can’t automate, or speed up, or mimic: the process of getting to know his clients, always doing his best for them, and earning their trust in the process.

Why Jamie accepts new clients by referral only

Jamie’s single-minded focus on creating value for clients means that he wants to spend as much time as possible with them — and the way he sees it, time marketing to new clients just gets in the way.

Rather than meeting new people, he’d rather spend his hours serving the clients he already has. He’s seen that when advisors take on too many clients, they don’t have the opportunity to get to know them and create real impact on their lives, meaning that their business is more transactional than relational.

Jamie is so concentrated on his current network of clients that a few years ago, he and his team decided to begin accepting clients by referral only. That means that they’ll only take on someone who has been specifically referred by a current client.

This exclusivity may seem risky, but Jamie has found that it pays off. He’s able to spend more face-to-face time making sure his clients can ask lots of questions and understand everything that’s going on with their money. He and his team also come up with new ideas to add value — like hosting client-only events with guest speakers to help them learn more about finance and business.

Hint: Many of the things Jamie does for clients don’t directly earn him money; for example, he’s currently looking at new ways to help clients make better evidence-based business decisions. However, any value he creates for clients helps his relationship with them — and therefore his business — in the long run.

The benefit of spending so much time serving clients and providing them with value is that, inevitably, the clients can’t help but talk about the service to their friends. And they do introduce Jamie to new, similar, clients who also want the same thing.

Of course, this isn’t something a new advisor can do right from the beginning. It takes time to build up the trust and the clientele, and momentum builds slowly over many years. Still, the lesson of focusing on current clients is a valuable one whether or not you’re marketing yourself to new clients.

Hint: For more on why providing value to current clients is just as important as seeking out new clients — if not more so — listen to Episode 33: The 1-Page Marketing Plan for Your Financial Advisory Practice with Allan Dib.

To hear more from Jamie, make sure you catch the full episode where he talks about the most challenging part of growing his practice, the opportunities out there for new advisors, and more. You can find the show right here on this page or subscribe on iTunes or Stitcher so you don’t miss any episodes.

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