Broker Check

Episode 56: The Asset Protection Strategies Missed By Family Businesses

In this episode of the Family Business Show, host Michael Palumbos interviews Russ Alan Prince, who is an expert in private wealth management and the editor of Private Wealth Magazine. Russ shares insights from his journey, starting from his education at SUNY Stony Brook and Columbia University, through his early career at Bankers Trust, to his current role in wealth management and family office consulting.

Russ emphasizes the importance of understanding the unique worlds of high net worth individuals and their families. He shares his experiences in assisting these families to manage their wealth effectively, focusing on creating high-performing single-family offices and delivering value to wealthy clients. He discusses the significance of personalized, outcome-focused planning and the need for continuous adaptation and stress testing in wealth management strategies to ensure they align with the family's evolving goals and circumstances.

Throughout the interview, the conversation highlights the necessity for families to actively engage with their advisors, ask critical questions, and ensure that their wealth management strategies are constantly reviewed and aligned with their objectives. The discussion underscores the value of expert teams in providing comprehensive and customized solutions that cater to the specific needs and goals of wealthy families and their businesses.

Episode 56 Transcript


00:00:02.700 --> 00:00:18.180

Michael Palumbos: Welcome everybody to the family business show I am your host Michael Columbus and today we have a treat for all of you we're joined with by russ Ellen Prince who runs private wealth magazine welcome Ross.



00:00:18.900 --> 00:00:20.700

Russ Alan Prince: Thank you, Michael it's great to be here.



00:00:21.480 --> 00:00:28.110

Michael Palumbos: So one of the traditions that we have on the show russ we just asked people to kind of tell us about your journey.



00:00:28.710 --> 00:00:34.920

Michael Palumbos: I know you well and i'm going to i'm going to you know share what i've learned about you, through 20 years of following you.



00:00:35.850 --> 00:00:49.830

Michael Palumbos: But, most people probably haven't heard of resale and prints and less you know they're familiar with family offices and they're in the high net worth space, even then, you may not have heard about you, but tell me tell us about yourself and your journey.



00:00:50.610 --> 00:01:08.220

Russ Alan Prince: Well, I understand i've sort of been loom bitch corner of the world and, just a few people generally speaking, compared to the masses that are out there, so yeah I probably am not that well known and it sort of works for both me and everybody else still.



00:01:09.270 --> 00:01:22.950

Russ Alan Prince: let's say it goes, all the way back to when I was first getting my undergraduate degree at suny stony brook out on long island and I stayed around I was going working on my PhD in sociology.



00:01:24.300 --> 00:01:34.560

Russ Alan Prince: After six years they gave me a master's degree as a consolation prize and I went on to get an MBA from Columbia, but while I was at stony brook an interesting thing happened.



00:01:35.100 --> 00:01:45.270

Russ Alan Prince: I went out to the hamptons and got involved in charity work and I learned something really interesting I learned about trust babies and I started dating them before they were popular.



00:01:46.350 --> 00:01:56.220

Russ Alan Prince: So I started learning about this world um i'll say wealthy individuals that was very different than when I grew up in brooklyn in a row house.



00:01:57.360 --> 00:02:01.710

Russ Alan Prince: So I got used to that i'm used to that as a nice term because.



00:02:02.760 --> 00:02:19.590

Russ Alan Prince: Life was more fun, to be honest with you when you had more money, so that was my first exposure to the very wealthy after Columbia, I went to work for bankers trust which unless you're as old as I am you don't know who bank is trusted, but it was merged into chase.



00:02:20.670 --> 00:02:21.120

Michael Palumbos: date.



00:02:21.960 --> 00:02:25.980

Russ Alan Prince: And I found that corporate environments don't work well for me.



00:02:27.780 --> 00:02:34.500

Russ Alan Prince: They have meetings and then they have more meetings and i'm not sure if anybody's doing anything but there's lots and lots of meetings.



00:02:35.100 --> 00:02:44.430

Russ Alan Prince: went off on my own that's over 30 years ago and since then i've been researching the wealth thing i've been researching professionals.



00:02:45.000 --> 00:03:03.660

Russ Alan Prince: And, more than anything else I started working with them directly, I started working with them in helping them develop high performing single family offices and work with professionals to help them deliver more value to their wealthier clients, so that sort of brings us up to date.



00:03:04.140 --> 00:03:10.140

Michael Palumbos: Okay, and you know today you're, the editor of private wealth magazine i'm.



00:03:10.290 --> 00:03:26.340

Russ Alan Prince: Most of the writer, the the figuring out how to put it on the back end of the system, which takes forever somehow private wealth magazine is an online magazine that focuses on how to.



00:03:27.240 --> 00:03:36.060

Russ Alan Prince: deliver greater value to the wealthy if you're an advisor or professional and it shows the professionals, what the wealthy are looking for.



00:03:36.510 --> 00:03:50.490

Russ Alan Prince: And it focuses on the wealthy and those single family offices and how they can be more effective in working with professionals and working with the different providers they're looking to you know derive value from yeah.



00:03:51.060 --> 00:03:55.020

Michael Palumbos: And I like like I said I know you're a former contributor to forbes.



00:03:56.040 --> 00:04:14.580

Michael Palumbos: I know that you've written, you know or co written or co authored close to or over 60 books, at this point so you know that it goes the knowledge in this arena is probably one of the deepest in this in this segment so.



00:04:14.880 --> 00:04:21.540

Michael Palumbos: You know, for those of you running a family business we're going to talk here we're going to be focusing in on some of the unique things.



00:04:21.780 --> 00:04:27.450

Michael Palumbos: That you may be experiencing as we go through this you know this podcast but there's a you know.



00:04:28.440 --> 00:04:34.830

Michael Palumbos: My experience Ross and it may not be the same as yours, but you know dealing with that that middle market.



00:04:35.250 --> 00:04:47.190

Michael Palumbos: very successful family business, and when I you know what I mean by that is somebody that's been able to do over $10 million of revenue up to that 250 million dollars of revenue business.



00:04:47.670 --> 00:05:00.780

Michael Palumbos: And they they are, first, second, maybe third generation but they're still they still look and say we did all this work and, even though they are wealthy.



00:05:01.560 --> 00:05:21.570

Michael Palumbos: They rarely feel wealthy and think that they're wealthy, is what I my experience with many of them, even if they own a plane, I had you know, or they they own a you know, will they call it a boat, but it costs, you know 500,000 to a million dollars for that boat.



00:05:24.210 --> 00:05:26.520

Michael Palumbos: And so it's just I think there's like this.



00:05:28.740 --> 00:05:41.640

Michael Palumbos: kind of like this push and pull Ying and Yang of you know i'm just like everybody else to put my pants on one leg, at a time and they're the salt of the earth kind of people building these family businesses.



00:05:42.300 --> 00:05:54.540

Michael Palumbos: And yet, you know they forget where they are and that they don't even know you know because they compare themselves to their friends who you know, not all of them are wealthy.



00:05:55.830 --> 00:05:56.850

Michael Palumbos: thoughts around that.



00:05:58.230 --> 00:06:01.860

Russ Alan Prince: I was engaged once by a.



00:06:03.510 --> 00:06:08.790

Russ Alan Prince: very wealthy business owner when net worth about $500 million.



00:06:10.320 --> 00:06:13.260

Russ Alan Prince: Who defined herself as upper middle class.



00:06:14.910 --> 00:06:28.350

Russ Alan Prince: So he was really upper upper upper middle class, if you want to go that way, and the problem in making this calculation is that most of the people, he was dealing with worth billions.



00:06:29.490 --> 00:06:35.460

Russ Alan Prince: So people tend to rate themselves on a comparative scale and they tend to look up not down.



00:06:36.570 --> 00:06:49.980

Russ Alan Prince: So people don't look at the fact that okay if you're making a million dollars in income, which some of these business owners are making that point 01 percent of the world population.



00:06:51.150 --> 00:06:59.370

Russ Alan Prince: Now that's not a big number I don't care how you look at it, so what we really have is a situation where people.



00:07:00.810 --> 00:07:04.560

Russ Alan Prince: have this illusion, sometimes of what it is to be wealthy.



00:07:06.150 --> 00:07:07.470

Russ Alan Prince: And the problem is, is that.



00:07:09.390 --> 00:07:20.550

Russ Alan Prince: it's an illusion and people don't realize where they stand in the situation where things are matching up, for example, inflation is becoming a bigger issue nowadays.



00:07:21.030 --> 00:07:31.200

Russ Alan Prince: A right and it matters to some people when they go to the store they see the cost of things and have to make decisions not to buy something because of that.



00:07:32.790 --> 00:07:46.260

Russ Alan Prince: Well, most of the people we're talking about don't have that decision making question it's like Okay, yes, really miserable it's the bread is $1 more Okay, and then they just take the bread.



00:07:47.520 --> 00:07:57.570

Russ Alan Prince: So there's a real difference between the reality of who is making money and how that is working and how these people are experiencing it.



00:07:58.830 --> 00:08:16.530

Russ Alan Prince: For example, if you're a business owner and something happens in your family and is a medical issue and you do not think twice about what you need to do yeah right, that is a big difference than what most of the world has to deal with it, most of the people in the US have to deal with.



00:08:17.640 --> 00:08:29.910

Russ Alan Prince: They have real concerns that I have to trade off when you go to the gas station and you see that gas is $5 and you say that's terrible as you fill up your tank and drive away and that was the last thought you had about that.



00:08:30.540 --> 00:08:37.830

Russ Alan Prince: where the people are saying well i'm only going to take three gallons this time, so what you get is it's a psychological factor.



00:08:38.610 --> 00:08:47.730

Russ Alan Prince: how people are comparing themselves to think about it, I once wrote a book called the middle class millionaire where people are.



00:08:48.660 --> 00:08:56.910

Russ Alan Prince: where people have millions of dollars, but they don't think of themselves as being millionaires or rich, because the millionaires well, they have much more.



00:08:57.270 --> 00:09:10.560

Russ Alan Prince: Somehow in their mind, they have the bigger boat, or they have the fancier cause and a lot of this has to do with how people sometimes have brought up, meaning that you have the values that are middle class.



00:09:11.250 --> 00:09:22.470

Russ Alan Prince: Yes, you hold the value is that a middle class, you see yourself as middle class, but that doesn't mean you from a net worth or wealth perspective, your middle class, because you're not.



00:09:23.640 --> 00:09:32.250

Russ Alan Prince: And now that leads to all sorts of other issues, you might be having and other complications in your life, where you're not worried about the fact inflation is up.



00:09:32.790 --> 00:09:33.120




00:09:34.140 --> 00:09:44.100

Michael Palumbos: yeah and it's it's interesting because you know I think you just hit the nail on the head middle class millionaire I love that and I, as you said that i'm like I read that book.



00:09:45.330 --> 00:09:51.270

Michael Palumbos: So the the dichotomy here for a lot of these people is you know.



00:09:51.990 --> 00:09:59.580

Michael Palumbos: grandma and grandpa started the business grandma and grandpa never got wealthy, they just started this foundation of a business and it and it fed everybody.



00:10:00.090 --> 00:10:13.410

Michael Palumbos: Right and then and then their children took over the business, and you know if they've done done a good job they've now created a lifestyle that was above and beyond what mom and dad were able to do.



00:10:14.220 --> 00:10:18.480

Michael Palumbos: And you know now in the it going into the third generation and i'm just.



00:10:19.470 --> 00:10:24.480

Michael Palumbos: I have a client that just you know POPs right in my head, you know, the second generation took.



00:10:24.720 --> 00:10:35.220

Michael Palumbos: What mom and dad did that they had gotten to about a million dollars of revenues and turned it into a $10 million annual revenue business took care of everybody in the family, really, really well.



00:10:35.640 --> 00:10:45.540

Michael Palumbos: Well, when the next generation was coming in they're like what fed three families is not going to feed eight you know what are we going to do here.



00:10:46.050 --> 00:10:59.730

Michael Palumbos: Well, today they're doing almost $40 million a year, and again no one thinks of themselves as wealthy, but yet they're running into you know so many.



00:11:01.050 --> 00:11:12.750

Michael Palumbos: estate planning issues and tax planning issues, and you know how are we going to transition, the business and that what I hear over and over again, is man, it was so much easier when we did.



00:11:13.890 --> 00:11:22.410

Michael Palumbos: It and now we got to jump through all these hoops and i'm like i'm sorry that you have first world problems.



00:11:23.340 --> 00:11:28.650

Russ Alan Prince: These are all those high class problems that people would prefer not to have.



00:11:29.940 --> 00:11:34.230

Russ Alan Prince: But when they really think about it, they rather have the high class problems and the other ones.



00:11:34.470 --> 00:11:42.900

Russ Alan Prince: yeah so everybody does turn around and said Okay, how do we do this, and what was really interesting when you talk about family businesses.



00:11:43.260 --> 00:11:51.270

Russ Alan Prince: And the family dynamics and the ever expanding branches of the tree, is that it gets very complicated.



00:11:51.990 --> 00:11:58.710

Russ Alan Prince: And that's one of the reasons why so many of them start to succumb or sell out over the generations.



00:11:59.160 --> 00:12:16.200

Russ Alan Prince: it's very hard to maintain this it's one thing when you and your cousins growing up next door in the neighborhood were close and had a good relationship, and now you know you have cousins they're in another state, for example, and you see them, at least at every wedding and every funeral.



00:12:17.490 --> 00:12:24.120

Russ Alan Prince: And that's about the only time you're going to see them there's not really a close connection and then you talk to families.



00:12:25.290 --> 00:12:32.280

Russ Alan Prince: mean all these problems, Dr Roger talk to families, I like it, because I was speaking to a family fourth generation.



00:12:32.910 --> 00:12:39.660

Russ Alan Prince: And the fifth generation and they're asking me okay i'm a consultant, I am.



00:12:40.350 --> 00:12:48.930

Russ Alan Prince: You know I don't know these people I don't have any relationship with these people they want me to talk to their kids who are in their 20s to explain to them.



00:12:49.320 --> 00:12:58.800

Russ Alan Prince: that they have a bad work ethic, and they should be, you know focused on doing more, I said well yeah okay having my own 20 year old.



00:12:59.370 --> 00:13:09.120

Russ Alan Prince: i've learned that telling them him what to do is not always a very effective approach and telling strangers what to do is probably less effective.



00:13:10.020 --> 00:13:20.460

Russ Alan Prince: And they just don't know what to do, because they don't see anybody taking over the business now, and they are lost as to where they wanted to go and they want to keep it because that's their legacy in their mind.



00:13:20.910 --> 00:13:32.190

Russ Alan Prince: Right these problems start to arise all over the place and it's complicated severely complicated because the professionals tend to be siloed.



00:13:32.730 --> 00:13:44.100

Russ Alan Prince: tend to be limited tend to be we call them pretenders, meaning that they have really good intentions, but they might not have the expertise to help address a lot of these issues.



00:13:45.390 --> 00:13:54.840

Russ Alan Prince: it's a combination of okay it's got more complicated the laws are more complicated the circumstances are more complicated it's more pervasive.



00:13:55.590 --> 00:14:05.880

Russ Alan Prince: These issues so more professionals are jumping into the pool so that looking to generate revenues out of this and many of those people are just not up to the task.



00:14:06.540 --> 00:14:25.740

Russ Alan Prince: So you have a complication here and it's shifting the whole balance, people are not getting the advice that they really need to make a significant difference and get the results they want and, unfortunately, that is becoming a bigger part of this problem.



00:14:27.180 --> 00:14:39.630

Michael Palumbos: that's interesting that you talk about That said, you know, I feel that I see that I, as the you know, I was the former President for the society of financial service professionals in my area.



00:14:40.230 --> 00:14:49.800

Michael Palumbos: And you know when I was talking or doing a case study and we would be jumping into these things you know a lot of the advisors.



00:14:50.370 --> 00:14:57.240

Michael Palumbos: would say well that's not my marketplace, you know, so why are we even talking about those things you know my marketplace is.



00:14:57.540 --> 00:15:05.130

Michael Palumbos: You know i've got a $400,000 IRA rollover a yeah I retired a mom and pop across the kitchen table.



00:15:05.490 --> 00:15:19.020

Michael Palumbos: And my set of problems are just this so you know why do you want to dive into taxes and estate planning and all these other you know business succession it just you know can't we focus on case studies that are relevant to my client.



00:15:20.190 --> 00:15:20.430

Michael Palumbos: And I.



00:15:21.030 --> 00:15:33.780

Russ Alan Prince: You have a good point and that's great if that's what they want to do the bigger problem, I think, is when those people have now decided they want to do the other stuff.



00:15:34.170 --> 00:15:43.050

Russ Alan Prince: But I have a limited skill set and knowledge base i'll give you an example, Michael you and I know that when you're talking to a family.



00:15:43.800 --> 00:16:01.080

Russ Alan Prince: A family business and one of the big issues becomes income taxes, how do we and that's true all businesses family business non business for some reason I think there's a general trend in the country that any way to legally pay less income taxes is a good thing.



00:16:01.470 --> 00:16:03.180

Russ Alan Prince: yeah i'm going to make that claim.



00:16:04.560 --> 00:16:05.640

Russ Alan Prince: Pretty comfortably.



00:16:07.170 --> 00:16:15.570

Russ Alan Prince: So, Michael you and I know that you are able to work with these business owners and show them some i'll say.



00:16:16.140 --> 00:16:28.590

Russ Alan Prince: That creative ways, but some very solid ways they can mitigate taxes, so you have a small business owner who has 30 some odd employees family members.



00:16:28.980 --> 00:16:46.470

Russ Alan Prince: And it's very possible to show them some ways they can lower their income taxes by half a million to maybe $2 million now what we're talking about isn't unique it isn't something that Michael can do, and nobody else can that's not true it's just not very common.



00:16:46.920 --> 00:16:48.450

Russ Alan Prince: And most professionals.



00:16:48.960 --> 00:17:00.210

Russ Alan Prince: are just not aware of all the possibilities and by not being aware of all the possibilities they end up doing a disservice in my mind to the business owners.



00:17:00.660 --> 00:17:12.030

Russ Alan Prince: Because all they can do is say here here's what I got here's what you get because that's all I got and that's understandable but that's not.



00:17:12.750 --> 00:17:22.260

Russ Alan Prince: What we're talking about here we're talking about being able to help business owners see all the possibilities, so they can make better informed decisions.



00:17:22.980 --> 00:17:34.890

Russ Alan Prince: And that's the goal for the higher end professionals working in this space and really that's only a small percentage of the people who are running around this area, so to speak.



00:17:35.190 --> 00:17:35.550




00:17:36.990 --> 00:17:38.220

Russ Alan Prince: That becomes.



00:17:39.780 --> 00:17:56.190

Russ Alan Prince: That becomes a big differentiator in the sense of if the family business wants to go down the generations, if the family business wants to limit the taxes they have to pay and do it obviously legally.



00:17:56.700 --> 00:18:13.470

Russ Alan Prince: The family business wants to focus on ensuring that the next generation is well prepared to handle the wealth and have the capabilities that they have the capabilities to run the business and run their lives effectively if that is the agenda.



00:18:14.580 --> 00:18:26.280

Russ Alan Prince: Well, most professionals are so siloed or as we say pretenders or limited that those family businesses are not going to get those results yeah.



00:18:27.390 --> 00:18:33.870

Michael Palumbos: I had a guest on a podcast who gave me really great advice he had joined a.



00:18:35.010 --> 00:18:45.450

Michael Palumbos: A CEO Roundtable group that was that was mostly family businesses at one of the family business centers in upstate New York.



00:18:46.590 --> 00:19:04.140

Michael Palumbos: And the the coach said, you have blind spots that you don't even know about and one of the things that i'm going to push each of you to do is that if you're going to be a part of this group, you need to go out and talk to.



00:19:05.190 --> 00:19:13.440

Michael Palumbos: A new accountant, you need to talk to two or three new attorneys and you need to talk to three or four new wealth advisors.



00:19:14.310 --> 00:19:25.740

Michael Palumbos: And the idea that he that he took and I know you talk about this on a pretty regular basis, but what happened is you know for him is he's like the person who got me to where I am.



00:19:26.850 --> 00:19:39.210

Michael Palumbos: didn't have any clue how to get me where I was going, and he didn't know that because he didn't didn't talk to anybody different to find out the levels of different expertise that were available out there.



00:19:39.930 --> 00:19:50.760

Russ Alan Prince: that's exactly right, it is i'll put it this way, all right and i've been, as you mentioned, as we talked about i've been actually researching this space for decades.



00:19:51.660 --> 00:20:00.000

Russ Alan Prince: And what's really obvious and it hasn't changed, which is sort of almost disappointing i've heard after all the decades is that.



00:20:00.780 --> 00:20:19.530

Russ Alan Prince: most perfect most say these family business owners, they take for granted that the person they're talking to is really expert is really capable has all the depth has all the access to all the resources and that very rarely the case.



00:20:20.850 --> 00:20:29.430

Russ Alan Prince: it's it's not the norm for these different professionals to be as comprehensive in their thinking.



00:20:29.970 --> 00:20:43.740

Russ Alan Prince: have access to the types of strategies that might be effective now i'm not going to any way say that that one individual you might be talking to knows all this stuff and can implement all this stuff that's not true that's not realistic.



00:20:44.550 --> 00:21:02.490

Russ Alan Prince: What they need is an expert team around them that they can pull together to provide this range of expertise and solutions that's what you need, because no one person is going to have that knowledge and depth it just doesn't happen right right so.



00:21:02.760 --> 00:21:03.870

Michael Palumbos: Complicated today.



00:21:04.380 --> 00:21:14.820

Russ Alan Prince: it's much too complicated, now I talking to all these families and we're talking to billionaires on a regular basis, for example, talking to all these families.



00:21:15.630 --> 00:21:29.940

Russ Alan Prince: I am able to, for example, identify most of the issues that come up and what can be done right now I just said, I can identify the issues and I can identify what can be done to be clear, I don't do any of this.



00:21:29.940 --> 00:21:30.360




00:21:31.470 --> 00:21:44.340

Russ Alan Prince: I don't actually do the implementation, I know that if you bring in this particular retirement plan you're going to save a million dollars in taxes and you're going to get all the time and money back to you, I know how that works.



00:21:44.850 --> 00:21:52.770

Russ Alan Prince: I know how to take certain risk management strategies and where they fit Okay, but I don't do it, I don't, for example, put that in.



00:21:53.310 --> 00:22:02.700

Russ Alan Prince: There and it's complicated it's not something that just Okay, we want to pull it off the shelf that's ridiculous we're going to have to.



00:22:03.450 --> 00:22:13.380

Russ Alan Prince: find the right experts, the right team to make this work and one of the strangest things i've noticed strangest one of the most common things.



00:22:14.160 --> 00:22:30.300

Russ Alan Prince: Instead, you know I figured that people catch on but they don't when you say you're a person that you have to go talk to the next account and talk to Okay, the problem I found in that, and I think it's a good idea, but there's a big big catch Do you know what questions to ask.



00:22:30.510 --> 00:22:35.550

Russ Alan Prince: Right okay and most people don't know what questions to ask.



00:22:36.810 --> 00:22:42.780

Russ Alan Prince: And then, if you ask the question what's really interesting is that most people don't know how to interpret the answers.



00:22:44.550 --> 00:22:45.450

Russ Alan Prince: It is just like.



00:22:45.810 --> 00:22:46.380

Russ Alan Prince: Okay, no.



00:22:47.130 --> 00:22:57.390

Michael Palumbos: They haven't been trained in that it's so it's a great great analogy, you know that my you know my son just had a car accident motorcycle accident.



00:22:58.050 --> 00:23:07.680

Michael Palumbos: And that accident, we don't know who was at fault, nobody was there and I had several people say Michael did you did you hire an attorney.



00:23:08.400 --> 00:23:18.090

Michael Palumbos: And i'm like no, they would then they're like what do you tell your clients don't try to do this yourself, you need somebody on your corner, to help you with this.



00:23:18.480 --> 00:23:38.310

Michael Palumbos: And so I you know I took the advice I give to clients and I in after going through and listening to what you just said, it still wasn't enough I interviewed three different attorneys and I just went with my gut and I don't know what to ask about that that level of you know service.



00:23:38.460 --> 00:23:45.120

Russ Alan Prince: Right and that's the going with the guy i'm fortunately for most people is the default.



00:23:45.510 --> 00:23:49.740

Russ Alan Prince: yeah Okay, I am I saw I liked the person.



00:23:50.160 --> 00:23:58.680

Russ Alan Prince: I said, good for you, you should have a drink with the person that doesn't mean they're going to get you the result you want, but at least you can have a drink with them and feel good.



00:23:59.160 --> 00:24:08.760

Russ Alan Prince: And that's again now, the catch and we'll have this is that most people obviously you know, a family business they've been making.



00:24:09.030 --> 00:24:19.080

Russ Alan Prince: You know, certain their manufacturing certain products for all these years they're really good at that they know how that works, they know how the system plays out they know all the pieces for that that sensational.



00:24:20.070 --> 00:24:25.530

Russ Alan Prince: The problem is and the prep they don't know anything about wealth management, for example.



00:24:26.040 --> 00:24:39.120

Russ Alan Prince: yeah they don't know what the legal rules are around certain deductions and how they can be used, they don't know a lot of this stuff and remember the government keeps coming out with new possibilities.



00:24:39.660 --> 00:24:47.550

Russ Alan Prince: When the care Act came out, for example, in this case I know people were running all over the place, trying to figure out what it said and what to do.



00:24:48.750 --> 00:24:51.120

Russ Alan Prince: And many people turns out got it wrong.



00:24:52.680 --> 00:24:54.900

Russ Alan Prince: So what is really important.



00:24:56.190 --> 00:25:09.810

Russ Alan Prince: And the way I say to a lot of the people, the business owners, but really important is that you start to understand where the value is so instead of thinking about.



00:25:10.410 --> 00:25:23.250

Russ Alan Prince: The products, the services that people are talking about right instead of thinking about the different trusts, you might want to put in place because that's how most of the professionals talk about it.



00:25:24.120 --> 00:25:29.340

Russ Alan Prince: You speak to a really good lawyer and they'll tell you need a craft and then you need an ID tea and then you need.



00:25:29.700 --> 00:25:37.740

Russ Alan Prince: And you're sitting there thinking, I have no idea what we're talking about and most people who run into the situation shake their head up and down as if they're paying attention.



00:25:38.250 --> 00:25:49.380

Russ Alan Prince: don't know what he's saying, but it sounds sophisticated right I tell people, and I do this, especially with family offices, at the very high end let's think in terms of outcomes.



00:25:50.460 --> 00:26:02.010

Russ Alan Prince: What do you want the result to be do not tell me how to get there do not tell me that this person said, we need to create the portfolio this way, none of that makes sense.



00:26:03.030 --> 00:26:16.680

Russ Alan Prince: If you're depending on these professionals, if you think in terms of outcomes, you are very likely to be in the direction of where you want to go what I mean by that is you're going to get better results.



00:26:17.700 --> 00:26:23.520

Russ Alan Prince: If you want to tell somebody I want to retire at this age, I want to have this kind of lifestyle.



00:26:24.660 --> 00:26:31.410

Russ Alan Prince: Right, then you the professional it's his or her job to figure out what the options are to help you get there.



00:26:33.660 --> 00:26:47.130

Russ Alan Prince: I do with a lot of business owners like you do Michael and we both agree that they're smart they're capable they're smart they did this, they might not know this field that's not every that isn't.



00:26:48.150 --> 00:27:02.880

Russ Alan Prince: You know, lack of intelligence, so we look at it, as our job to help them to understand their options and then the consequences of those options the pros the cons the complications, etc.



00:27:03.780 --> 00:27:13.530

Russ Alan Prince: If we give them the information in a way that they can understand it in a way that it resonates with them as we do, they can make better informed decisions.



00:27:14.820 --> 00:27:26.640

Russ Alan Prince: And that's what's important that they have the insight to make the best informed decisions, I am very bad when people have asked me okay russ What would you do.



00:27:27.660 --> 00:27:40.530

Russ Alan Prince: And i'll give you an example, one time not too long ago, a person with billions of dollars asked me in his situation, what would I do now.



00:27:41.340 --> 00:27:51.690

Russ Alan Prince: here's a complicated family situation and you're a lot of issues involved, and I said very straightforward, if I had your money.



00:27:52.350 --> 00:28:11.160

Russ Alan Prince: And I was in this situation, I pay the people I buy an island, I build a castle build a moat and keep everybody away now that would work really well, for me it would not work at all for him, so it doesn't matter what I will do, but he came important is that we discussed.



00:28:12.300 --> 00:28:19.740

Russ Alan Prince: how it works for him what his options could be based on the outcomes he wanted he didn't want the castle in the mode and the island.



00:28:20.580 --> 00:28:35.880

Russ Alan Prince: I really do, but he didn't so we have different outcome, so he had to we had to together think through what he wanted to do, and he came up with options and solutions that made sense to him and he made some decisions.



00:28:36.900 --> 00:28:47.190

Russ Alan Prince: And that's the way this is really works with all of these things you want to figure out where you want to take this and then make the decisions that.



00:28:48.300 --> 00:29:04.860

Russ Alan Prince: can sort of us a you know the business owner can get you there, keeping in mind that things are gonna change by that I mean is that it's great you have one agenda today and something happens in the world and life and everything else, and you have another agenda.



00:29:05.970 --> 00:29:17.880

Russ Alan Prince: Right and there's no way that isn't going to happen, life is messy it doesn't run in a nice easy you know simple way of doing things which brings me to another point.



00:29:18.510 --> 00:29:31.800

Russ Alan Prince: you're in charge you the business owner you're in charge of this this is your life, this is your family this matters to you, right here, we can't depend on the professionals to have the same.



00:29:33.540 --> 00:29:51.390

Russ Alan Prince: intensity of feeling about it, they don't now that doesn't mean they're not empathetic and that doesn't mean they don't care, but it's a real big difference between what matters to you and your life and your family and somebody being concerned and caring, but on the outside right.



00:29:52.530 --> 00:29:53.400

Russ Alan Prince: justin yeah.



00:29:53.700 --> 00:29:54.780

Michael Palumbos: So you brought something.



00:29:54.900 --> 00:29:55.470

Michael Palumbos: i'll go ahead.



00:29:55.560 --> 00:30:09.570

Russ Alan Prince: No, I just want I just like the idea is that, like way Michael you and I approach it, which is what makes it work so nicely Our job is to really understand you really understand where you want to go.



00:30:10.860 --> 00:30:24.480

Russ Alan Prince: Take the entire universe of options that are available, because we have that experts in the team that put together and show you possibilities, so that you can make these very smart decisions yeah.



00:30:24.900 --> 00:30:32.250

Michael Palumbos: So you bring up a really interesting point and I want to just make sure that people are catching it one of the first ways to start to say.



00:30:32.640 --> 00:30:46.710

Michael Palumbos: You know, is this the right advisor the wealth manager for my group, whether that, regardless of whether they're the Attorney the accountant or the wealth advisor is are they are they talking about my objectives.



00:30:47.190 --> 00:31:02.580

Michael Palumbos: Are they are they asked me what I want, or are they telling me about products are tools right away, because if they're if you're jumping into products and tools right away, then you're gonna like get somewhere, but you don't they don't even know where you want to go yet.



00:31:03.360 --> 00:31:13.830

Russ Alan Prince: that's exactly right when working with professionals and I work with a handful of them, and I do mean a handful when working with professionals.



00:31:14.760 --> 00:31:25.380

Russ Alan Prince: there's a process we call discovery which is the job of the professional to really learn how your world works, what matters to you.



00:31:25.650 --> 00:31:36.690

Russ Alan Prince: Those outcomes you're looking for what you've done so far and how that's working for you all these issues, become top of you know that's the issue that's what we have to focus on okay.



00:31:37.260 --> 00:31:47.760

Russ Alan Prince: discovery, so we have a role, because the 10% rule tied to discovery if the advisor is talking more than 10% they're not listening.



00:31:49.020 --> 00:31:58.770

Russ Alan Prince: Right they're trying to convince you persuade you sell in the model that we're talking about in the framework that we are dealing with.



00:31:59.490 --> 00:32:07.860

Russ Alan Prince: selling is off the table, there is no persuading there is no convincing, there is no selling the advisor is not trying to.



00:32:08.400 --> 00:32:28.410

Russ Alan Prince: sell you anything convince you of anything persuade you have for a particular solution that advisors job is to understand where your concerns are where your goals are and to show you possibilities to get those things resolved or those goals attained.



00:32:28.980 --> 00:32:29.370

Michael Palumbos: yep.



00:32:29.520 --> 00:32:40.980

Russ Alan Prince: it's a big difference and it's not semantics it's not trying to convince us not trying to show you here's the right answer and, as you pointed out, Michael it's not jumping in because.



00:32:41.520 --> 00:32:56.910

Russ Alan Prince: If I jump in in the first 15 Minutes because I have the solution, I can now solve your problem I don't understand you understand your problem I don't understand the implications and all i'm doing is trying to sell you something, and we want to avoid that.



00:32:58.110 --> 00:33:05.010

Russ Alan Prince: If the people aren't listening to you, and if you don't understand if they haven't demonstrated that they're listening to you.



00:33:05.910 --> 00:33:20.700

Russ Alan Prince: mean it's one thing to say i'm listening now i'll give you an example, and this comes more personal my wife explained to me that, listening right when she says something to me listening is not being able to repeat what she said.



00:33:22.140 --> 00:33:24.540

Russ Alan Prince: That is not listening that's being a tape recorder.



00:33:25.710 --> 00:33:36.240

Russ Alan Prince: and very bluntly, I can understand that, because I was very good and just repeating I don't know what she wanted a done, but I was able to sit there and give her the last five or six words.



00:33:36.450 --> 00:33:48.870

Russ Alan Prince: And it sounded like I was really paying a lot of attention and we both knew this wasn't really happening, but that did not go well, on a personal level, and I assure you it doesn't go well on a professional one either.



00:33:50.550 --> 00:34:05.130

Russ Alan Prince: So listening isn't being able to pair it back something listening is being able to distill what that essence of what that conversations about and make sure that you got it right and make sure that they understand you understand.



00:34:05.880 --> 00:34:14.010

Russ Alan Prince: and only then, are you in a really good and capable position to start sharing possible solutions.



00:34:15.660 --> 00:34:30.960

Russ Alan Prince: that's the goal yeah and that's just one indication let's talk about a couple of others that sort of a giveaway that you're dealing with people who are not really paying a lot of attention to you and I found this to be so obvious and so.



00:34:32.340 --> 00:34:42.960

Russ Alan Prince: blatant when somebody, for example in the professional, for example, you know, is looking at their phone and delivering messages well theoretically talking to you.



00:34:43.440 --> 00:34:56.730

Russ Alan Prince: that's one of those red flags it's like you're not that important, but the only time they should be doing that, if you ask if they asked a very pertinent question and they needed an answer and you contacted someone to get you the answer.



00:34:57.060 --> 00:35:04.380

Russ Alan Prince: Right, other than that I don't know unless it's a family emergency that phone should be gone, for example.



00:35:05.130 --> 00:35:18.780

Russ Alan Prince: But that's something so easy, but if you think about it i've seen so many advisors have the phone next to them, while they're having a conversation it's very common it's very common, as you said, to jump in.



00:35:20.220 --> 00:35:38.400

Russ Alan Prince: it's very common to explain how great they are now you want to work with great advisors going advisors are you there great we have a problem okay what advisor if you ask them to tell you they weren't we're really bad, but we try hard.



00:35:39.030 --> 00:35:40.680

Russ Alan Prince: doesn't happen very often.



00:35:41.070 --> 00:35:41.790

Russ Alan Prince: Or at all.



00:35:43.200 --> 00:35:46.620

Russ Alan Prince: Something real key to this, the real key.



00:35:47.730 --> 00:35:51.000

Russ Alan Prince: Is the advisor, and I mean by that is.



00:35:52.140 --> 00:36:03.930

Russ Alan Prince: These advisors at the level we're talking about like now, you know, like Michael, for example, these advisors are able to deliver the range of expertise that's out there.



00:36:05.280 --> 00:36:16.530

Russ Alan Prince: And there's a limited range if somebody came to you and said, I have a proprietary strategy that only I have, and no one else has it.



00:36:17.010 --> 00:36:26.700

Russ Alan Prince: And you have to work with me to get it, and you have to sign a nondisclosure agreement with it and you have to sign an end yeah Okay, you should run for the hills.



00:36:27.330 --> 00:36:42.360

Russ Alan Prince: People as that person is a fraud, there is nothing, nothing out there that Michael can't deliver to you are somebody just as good as him can't deliver it's at the top level.



00:36:42.840 --> 00:36:56.220

Russ Alan Prince: Everybody can deliver what the difference is it's making sure it aligns really tightly with what you want to accomplish with your outcomes and even people who can deliver everything.



00:36:57.540 --> 00:37:05.190

Russ Alan Prince: Then, not only a small percentage of them are able to put all the pieces together, like a jigsaw puzzle and get the right picture.



00:37:06.420 --> 00:37:17.820

Russ Alan Prince: that those are the advisors, you really want to focus on those are the advisors, you want to work with yeah those are the people who are going to make a significant difference in your world.



00:37:19.380 --> 00:37:27.270

Michael Palumbos: it's that's a really good point and I want to make sure that people don't miss that you know what I one of the things that I tell.



00:37:27.810 --> 00:37:36.840

Michael Palumbos: clients and prospects as i'm needing you know high net worth successful family businesses is that one of my superpowers.



00:37:37.560 --> 00:37:43.170

Michael Palumbos: Is the ability to know what I don't know but know where to find the answers.



00:37:43.890 --> 00:38:00.810

Michael Palumbos: And you know as as an example, I had a client and I was stuck that they had a $20 million business and four kids only one kid they wanted to pass the whole business to and through the years through the years they had never.



00:38:02.220 --> 00:38:14.520

Michael Palumbos: pulled money out of the business he never moved the money from you know the business pocket to the personal pocket he always felt that he could do better at the business what she did so We grew this wonderful business, but now he's sitting there.



00:38:15.090 --> 00:38:24.690

Michael Palumbos: Wanting to be him and his wife talking about being what they felt was equal, fair would to be as close to equal as we couldn't all for my kids.



00:38:25.140 --> 00:38:30.030

Michael Palumbos: But I want to give my business to the to the kid that's In it I don't he doesn't even have to buy it from me.



00:38:30.660 --> 00:38:37.620

Michael Palumbos: And we went around and round for a bunch of years trying to figure out, you know and trying things on.



00:38:38.580 --> 00:38:47.610

Michael Palumbos: And, and eventually what I did is I just brought somebody in who just had a different idea that you know that I hadn't thought of.



00:38:48.180 --> 00:39:00.750

Michael Palumbos: And that's like I said that's the superpower, we ended up with a design that the family was super excited about you know they're all going to be able to sit at the thanksgiving dinner table together and that was really important to them.



00:39:01.740 --> 00:39:12.840

Michael Palumbos: It was you know, most people would look at the design and say there's no way I would do that, but for this family, it was perfect.



00:39:13.560 --> 00:39:23.910

Russ Alan Prince: Rebecca comes right to the point that the idea is everything should be bespoke everything is customized to the family and the other point you're bringing up is that.



00:39:25.020 --> 00:39:28.500

Russ Alan Prince: The advisors any family business needs to work with.



00:39:29.190 --> 00:39:41.280

Russ Alan Prince: Its they need an elite team a family business needs an elite team of professionals now either the family itself is going to coordinate all these expertise and make sure that synergies come out the way they should.



00:39:41.970 --> 00:39:46.890

Russ Alan Prince: Where they're going to have to rely on some individuals to act as those coordinators.



00:39:48.510 --> 00:40:02.520

Russ Alan Prince: there's no question that, when you put all those pieces together and you look at it, you do get those synergies as we're saying you do get the advantages of having a lot of smart people working on your behalf.



00:40:03.660 --> 00:40:14.400

Russ Alan Prince: in concert yeah, however, that is, again, less that is uncommon let's put it bluntly that's not what happens.



00:40:15.090 --> 00:40:29.460

Russ Alan Prince: The lawyer is trying to sell his or her legal services, the insurance agents answer is insurance the wealth manager, for example, says, we need to tweak your investment portfolio when they're looking at it from their point of view.



00:40:31.530 --> 00:40:32.640

Russ Alan Prince: I assure you.



00:40:33.840 --> 00:40:40.350

Russ Alan Prince: There are opportunities and situations that are not as beneficial to you as they probably can be.



00:40:41.700 --> 00:41:05.250

Russ Alan Prince: And that is what we're trying to get beyond now, it turns out that most family business owners, for example, they just go with things it's sort of like there is no critical consideration in how they're working with these professionals, or even how they choose them.



00:41:06.450 --> 00:41:08.640

Russ Alan Prince: And that is where things fall apart.



00:41:09.750 --> 00:41:17.850

Russ Alan Prince: Because that leads to people getting less than exceptional service now sometimes, as we said.



00:41:18.660 --> 00:41:24.570

Russ Alan Prince: As you pointed out, Michael it's sometimes because you people don't know what they don't know so.



00:41:25.230 --> 00:41:40.170

Russ Alan Prince: Then, if I can show business owner, for example, family business owner, how to significantly control some of the risks in the family business create a pool of money for acquisitions, at the very same time.



00:41:42.000 --> 00:41:53.490

Russ Alan Prince: facilitate these acquisitions with pre tax dollars cost effectively and in a way that's going to be an estate planning strategy simultaneously, you know something.



00:41:53.910 --> 00:42:05.310

Russ Alan Prince: sounds really good The only problem is Michael well, you can do that and a few other people, I know, can do that most people I know don't know what we're talking about and that's where things fall apart.



00:42:06.360 --> 00:42:21.660

Russ Alan Prince: So what's really essential is that the business owner has to really understand it's up to them to push to ask questions, to make sure they understand things.



00:42:22.230 --> 00:42:32.730

Russ Alan Prince: One of the biggest failings, I believe, from the business owners from the wealthy in general, at all levels, I am amazed have so many of them.



00:42:36.180 --> 00:42:42.390

Russ Alan Prince: Implement or bring on strategies or try solutions they don't understand what's going on.



00:42:43.440 --> 00:42:55.650

Russ Alan Prince: Well, the lawyer said, this is what we want to do, I said, you know what it does not really I said well that's not good, if not really means we have no idea what we're buying into.



00:42:56.700 --> 00:43:10.920

Russ Alan Prince: And i'm a lawyer and i'm just picking on the lawyer, because they tend to be better at this and the void and shows them a stack of paper, it says we're gonna sign, all this is, do you know what that does he's the client says.



00:43:12.390 --> 00:43:22.950

Russ Alan Prince: What a lawyer does I said that's great the lawyer knows what it does you don't let's make sure you know i'm not talking about the nuts and bolts, the big picture, what you're going to get.



00:43:24.090 --> 00:43:33.450

Russ Alan Prince: that's what needs to happen and we're back to outcomes yeah, what are the big picture issues you brought it up just now, and you were talking about that family.



00:43:33.900 --> 00:43:44.040

Russ Alan Prince: And that's and you've done it a lot of times and you've been really successful helping people think through the estate planning considerations, most people don't.



00:43:45.030 --> 00:43:55.170

Russ Alan Prince: So, for example as you're pointing out there's a real big difference between equal and fair equal is, when all the different kids get the same.



00:43:55.740 --> 00:44:07.200

Russ Alan Prince: Right well that's wonderful except I spoke to a family for children, like in your case, one is running the company Okay, the responsible one, I was told.



00:44:09.690 --> 00:44:11.250

Russ Alan Prince: To are.



00:44:12.300 --> 00:44:14.250

Russ Alan Prince: As smart as a block of wood.



00:44:16.680 --> 00:44:20.490

Russ Alan Prince: And the fourth one is in rehab pretty much every other month.



00:44:21.510 --> 00:44:38.370

Russ Alan Prince: So the conversation was I understand you love them all and that's great, but we can't approach this the same way, because for just make it real simple if you give this one corner of your world to the kid and rehab the kid is dead.



00:44:38.730 --> 00:44:39.720

Russ Alan Prince: right here and simple.



00:44:40.110 --> 00:44:40.560

Michael Palumbos: yeah.



00:44:40.680 --> 00:44:50.490

Russ Alan Prince: The kid will kill himself, he will no if ands or buts reassure of it, the other two children well who knows.



00:44:51.570 --> 00:44:59.250

Russ Alan Prince: You know you can't fix stupid, he told me and they fit the category, according to him, not me.



00:45:00.120 --> 00:45:11.790

Russ Alan Prince: I don't care their assessment and the only kid who's actually has a new brain is the one running the company and I said, if all four kids get a quarter of the company, the company will fail me.



00:45:12.360 --> 00:45:31.590

Russ Alan Prince: Right so again, it becomes much more of what you want to accomplish how to work through this process because yes there's lots of ways, and there were ways that we resolved it with different types of trust and oversight and conservatorships all sorts of things were put in place.



00:45:32.160 --> 00:45:34.410

Russ Alan Prince: Because a lot of flexibility to move it around.



00:45:35.670 --> 00:45:45.300

Russ Alan Prince: That actually I would argue, is the easy part the technical solutions when you have a team like michaels, for example, are easy.



00:45:46.410 --> 00:46:04.350

Russ Alan Prince: Because everybody's an expert and everybody can deliver the hard part the really hard part is making sure that the options you're considering, are some of the best possible options, that is, the hard part that makes this thing really come together well.



00:46:05.640 --> 00:46:16.320

Michael Palumbos: We we like to call that the two stages of transition planning, whether it's an estate or the business two stages are people first.



00:46:17.280 --> 00:46:34.530

Michael Palumbos: Technical second if you don't have that people part done if you haven't gone through and thought about the objectives from each person's perspective and get everybody together, you know and start to understand those things it doesn't matter, the technical solutions don't matter.



00:46:35.160 --> 00:46:38.040

Russ Alan Prince: The technical solutions, I will just collapse.



00:46:38.190 --> 00:46:48.300

Russ Alan Prince: yeah great we did this now what's very interesting though is that so many professionals in the space of, say, lead with technical solutions.



00:46:49.410 --> 00:47:03.390

Russ Alan Prince: They they ramble on about these in these meetings i'm not sure it's because they don't have the expertise to deal with them as people sometimes I see it, because they're trying to show how smart, they are.



00:47:04.560 --> 00:47:12.660

Russ Alan Prince: And I said that's great it doesn't mean anything but i'm glad you feel good about it, you were beizer as opposed to really being responsive to the client, in this case.



00:47:13.830 --> 00:47:18.510

Russ Alan Prince: So many times it's because it's just the way the industry functions.



00:47:19.530 --> 00:47:34.380

Russ Alan Prince: And what's important to understand is that we really have to recognize that it's not about which technique or strategy is going to do it because it's going to be a combination of things.



00:47:36.210 --> 00:47:52.290

Russ Alan Prince: My advice to the richest families in the world is let's stop thinking about the techniques, because everybody's throwing them at you let's stop thinking about the new investment that's going to get you point 01 5% more return.



00:47:53.910 --> 00:47:57.480

Russ Alan Prince: let's start thinking about what you want.



00:47:58.560 --> 00:48:03.450

Russ Alan Prince: And we can back into sense all those other things you said, part one and part two.



00:48:04.770 --> 00:48:17.610

Russ Alan Prince: there's a strategy that's good for billionaires called floating Islands, where, if you have this kind of money and you are concerned about it being taken from you and just letting.



00:48:18.300 --> 00:48:27.780

Russ Alan Prince: You can literally create a system where it sort of bounces around the world, based on algorithms and such the idea floating islands, it goes from one.



00:48:29.670 --> 00:48:32.640

Russ Alan Prince: tax haven type environment to the next.



00:48:33.810 --> 00:48:42.510

Russ Alan Prince: Okay it's a really brilliant strategy enormously complicated very intricate in every stage.



00:48:43.860 --> 00:48:54.120

Russ Alan Prince: It is not appropriate for every billionaire by default it just isn't, it is a very unique scenario for a very unique situation.



00:48:55.380 --> 00:49:03.690

Russ Alan Prince: And I tend to think, even though a lot of the other stuff we talked about isn't as unique is that it should be approached the same way.



00:49:04.290 --> 00:49:05.910

Russ Alan Prince: Correct right was this really.



00:49:05.910 --> 00:49:16.860

Russ Alan Prince: fit your situation and is it the best set of options and considering the pros and cons of all of us, is it going to get you what you want.



00:49:17.670 --> 00:49:29.040

Russ Alan Prince: And like I said the way Michael and I tend to approach it is that we would narrow down all those possibilities to a handful that are really good for a client.



00:49:29.640 --> 00:49:47.580

Russ Alan Prince: And then, with the client with the client with the family business owner, with the family go through all the different implications and advantages for example of what that's going to do so they can make a really smart decision.



00:49:49.440 --> 00:49:55.470

Russ Alan Prince: It again it's not what I want it's not what I think is a good idea it's not.



00:49:56.640 --> 00:50:14.250

Russ Alan Prince: doesn't matter it's what matters to them and no matter how much I listen and I listened a lot, no matter how much I listen, no matter how much I really focus, no matter how caring i'm trying to be and focused and intense and all the rest.



00:50:15.300 --> 00:50:19.260

Russ Alan Prince: i'm never going to understand their world as well as they do is they live in it.



00:50:20.460 --> 00:50:28.470

Russ Alan Prince: And i'm not going to know certain things and i'll tell you very bluntly, I know for a fact their things they're not sharing with me by intent.



00:50:29.490 --> 00:50:40.830

Russ Alan Prince: They don't want to talk about certain things with me and that's their prerogative and I completely understand, even though, if I didn't know that I might be able to come up with something else that's not what this is about they don't want to share.



00:50:41.670 --> 00:50:48.630

Russ Alan Prince: I understand that something's a really personal something's a family that's what happened that's life that's how this works.



00:50:49.200 --> 00:51:04.650

Russ Alan Prince: So my job is not to push them and suggest my job is to really make sure that they are in a sense, educated around their world and their options, so they can make really good informed decisions.



00:51:05.880 --> 00:51:18.240

Russ Alan Prince: Right now, sometimes there's only one strategy that would work and then identity, yes or no decision, but sometimes there were three and they have to pick sometimes there are ways we can do combinations.



00:51:18.870 --> 00:51:34.260

Russ Alan Prince: But what's really essential is that if you want to lower your taxes that's a big objective and it's generally pervasive there are a handful of ways to do it it's great that I can show you the handful of ways, you decide what you want to do.



00:51:35.490 --> 00:51:49.050

Russ Alan Prince: that's how it all works that's what makes it different and that's why the best family offices, for example, the single family offices worked at these billionaires set up for themselves that's what they're doing.



00:51:50.070 --> 00:51:54.990

Russ Alan Prince: they're coming up with these possibilities they're working with different outside professionals.



00:51:55.680 --> 00:52:09.930

Russ Alan Prince: that's what you need to do as well, whether you have somebody leading the charge for you and coordinating these other professionals, or whether you want to do it yourself, now we find that most families don't want to do it themselves.



00:52:11.070 --> 00:52:14.460

Russ Alan Prince: It sounds good on paper until they start talking to everybody.



00:52:14.850 --> 00:52:20.130

Russ Alan Prince: right they don't want to do it themselves, but they need somebody to pull it all together.



00:52:21.240 --> 00:52:22.710

Russ Alan Prince: To show them the options.



00:52:23.880 --> 00:52:28.710

Michael Palumbos: That leads we share another passion about you know.



00:52:29.820 --> 00:52:32.100

Michael Palumbos: You may not know all the right questions to ask.



00:52:32.550 --> 00:52:46.020

Michael Palumbos: But a lot of times when you when you're looking at three or four different options, all of a sudden it's illuminated very easily and one of the things that you have taught people and advisors and families, for a long time.



00:52:46.350 --> 00:52:52.740

Michael Palumbos: Is that the super rich on a pretty regular basis, do something that the rest of the world.



00:52:53.520 --> 00:53:06.600

Michael Palumbos: Traditionally doesn't do and that's called the stress test the wealth plants can you talk about that, just a little bit and how that works for the super wealthy and why everybody should be doing that, at least, you know and how often.



00:53:07.050 --> 00:53:08.490

Russ Alan Prince: Well let's put it this way.



00:53:10.170 --> 00:53:22.890

Russ Alan Prince: The world changes we've been saying it changes and it keeps changing well what you did two years ago might not get you the results you want today.



00:53:23.880 --> 00:53:33.750

Russ Alan Prince: From for lots of reasons, one those results might have changed to the strategies that were working two years ago we're not working as well today because of some changes in regulations and rules.



00:53:34.170 --> 00:53:44.100

Russ Alan Prince: All this is happening on a regular basis and what's really essential is that this is not something you put you do, and then you put on the shelf.



00:53:44.880 --> 00:53:54.630

Russ Alan Prince: So, for example, lots of wealthy families lots of business owners have estate plans have a succession plan have acid that's great there are many.



00:53:55.470 --> 00:54:09.390

Russ Alan Prince: years old, you know not too long ago my mother, who is approaching 90 I made sure we redid her will and a stage and one of the things I noticed in it, is that.



00:54:10.560 --> 00:54:14.820

Russ Alan Prince: My guardian died 25 years ago and it's still there.



00:54:16.140 --> 00:54:25.350

Russ Alan Prince: So you know I don't think I need a guardian anymore, but nevertheless it was still in it's so out of date it wasn't even funny now.



00:54:26.100 --> 00:54:38.190

Russ Alan Prince: Again we're not talking about lots of money here we're talking about what she wants to have happen, most people are dealing with out of state, I mean out of date planning.



00:54:39.840 --> 00:54:44.700

Russ Alan Prince: They even have inaccurate portfolios because of what they want to do and what's really there.



00:54:46.110 --> 00:55:00.240

Russ Alan Prince: it's just all i'll say at the edges wrong, it might not be totally wrong but certainly at the edges, they tend to be problems stress testing is a process.



00:55:01.320 --> 00:55:07.770

Russ Alan Prince: where you are evaluating how am I going to get the results I want based upon what i've done.



00:55:08.910 --> 00:55:12.000

Russ Alan Prince: And the family offices are doing this perpetually.



00:55:13.110 --> 00:55:22.620

Russ Alan Prince: And if you're working with a good advisor you're sort of doing a perpetual that you sound like have to stop and say today we're going to do stress testing it's sort of an ongoing process.



00:55:23.100 --> 00:55:37.680

Russ Alan Prince: it's ongoing because the advisors, you were working with are spending a lot of time and effort, making sure that they are continually up to date on a number of things, one of the things is what you're thinking what you want the outcomes again.



00:55:38.250 --> 00:55:43.200

Russ Alan Prince: Another thing that are up to date on how the rules are changing because they keep changing.



00:55:44.700 --> 00:55:51.390

Russ Alan Prince: Right, they just keep changing they change retirement laws pretty much annual that in some way, shape or form.



00:55:52.260 --> 00:55:59.190

Russ Alan Prince: So you have to have those two pieces and the third piece is what's happening in the world in general, and how that might be impactful.



00:55:59.910 --> 00:56:11.910

Russ Alan Prince: So when you look at that people like Michael I know you're doing it, but you're always looking at these things, and then you're proactive in the sense of I then go to the client you then go to the client and say.



00:56:12.480 --> 00:56:18.000

Russ Alan Prince: here's what's happening let's talk about what this means for you right right.



00:56:18.330 --> 00:56:20.370

Michael Palumbos: How does it impact your objectives.



00:56:20.550 --> 00:56:28.980

Russ Alan Prince: Right exactly but you're going to find that most of the time, the investment advisor for example, what we do, once a year.



00:56:29.910 --> 00:56:50.400

Russ Alan Prince: To Rio rebalance your portfolio congratulations Eureka okay that's not about you anymore that's about them, so when it really comes down to it, you know stress testing is something that the advisor is always attentive to is also part of just the way they're working.



00:56:51.450 --> 00:56:59.040

Russ Alan Prince: And what's so critical in all of this is that the focus has to be very much on you, the business owner.



00:57:00.270 --> 00:57:14.010

Russ Alan Prince: And it has to stay there, and the minute it starts drifting or goes back to what the advisor wants, or what the advisor needs or the advisor wants to do with some product or service they are psyched up about.



00:57:15.300 --> 00:57:26.520

Russ Alan Prince: Then there's a good chance it's not going to work for you, the business owner, the way we really want it to work yeah so stress testing is most a perpetual in this model.



00:57:28.020 --> 00:57:45.570

Michael Palumbos: We we just brought in a new client recently this year, and it was interesting because we had a relationship with them in another way, you know we we did investment management and one account but.



00:57:46.590 --> 00:58:03.870

Michael Palumbos: long story short, it was you know it was another advisors, it was my father's client years ago and dad was more of the mindset of hey you know we're managing this money, this is great, this is all we need to do where you know I have that philosophy of.



00:58:04.770 --> 00:58:11.550

Michael Palumbos: When you push one button another one pops up it's like whack a mole some things are happening all over and there's you know.



00:58:13.260 --> 00:58:25.440

Michael Palumbos: You need to look at the whole picture, so I approached the family and they said, would you be open to stress testing and looking at what's going on here, based on what your objectives are.



00:58:26.250 --> 00:58:40.020

Michael Palumbos: And long story short, they had five different financial advisors in their life they had an attorney in their life that did you know great document work, but none of this was coordinated.



00:58:40.770 --> 00:58:50.520

Michael Palumbos: And, and when you started to dig into it, you know, this is a family that was you know north of $10 million net worth two kids.



00:58:51.120 --> 00:58:57.720

Michael Palumbos: And when I showed them, the amount of money that was going to each of the kids they both looked at each other and said.



00:58:58.320 --> 00:59:06.450

Michael Palumbos: We can't send them that much money that's too much what were we thinking, how come nobody showed us this before and it was really any bitty tiny simple.



00:59:06.750 --> 00:59:20.790

Michael Palumbos: For them to look at it and say I don't want my kids to each get over $5 million because they they don't understand they didn't work for it, they didn't did you know it's just not their world and will upset the apple cart.



00:59:21.270 --> 00:59:24.540

Michael Palumbos: And so they're bringing the kids in to have the meeting with them to just to say.



00:59:24.900 --> 00:59:34.200

Michael Palumbos: You know what word nothing they don't hit the kids probably don't have any idea how much it is because, again that family business that they've done well, but you know they're not.



00:59:34.770 --> 00:59:41.910

Michael Palumbos: ostentatious they don't you know they don't big live big but just that little piece of doing that stress test and just.



00:59:42.240 --> 00:59:53.460

Michael Palumbos: yeah I didn't even know all of their objectives at that point, but you know it was just it was just to sit down to say, let me show you what's happening right now and that immediately said, Michael would you take care of all this.



00:59:54.240 --> 01:00:04.200

Russ Alan Prince: But that's that's exactly what tends to happen now, one of the saddest part about being in this industry is that is the realization that most.



01:00:04.890 --> 01:00:20.670

Russ Alan Prince: clients at every level of wealth and every different area from celebrities to family business owners from corporate are being poorly served poorly served is that they are not getting they're not optimizing.



01:00:21.810 --> 01:00:32.310

Russ Alan Prince: They just because they don't know how because they're not dealing with the right circumstances the right people, and it really comes down to if you have advisors who.



01:00:33.030 --> 01:00:42.840

Russ Alan Prince: understand things like stress testing understand that the focus is on the client understand that all the strategies come, you know second stage stores whatever down the line.



01:00:44.400 --> 01:00:45.540

Russ Alan Prince: If that.



01:00:47.220 --> 01:01:01.200

Russ Alan Prince: that's a different mindset that's a different way of thinking about it because remember not only do we want to make sure we're doing the right thing we want to make sure that all the possible things we can be doing we're considering yes.



01:01:01.800 --> 01:01:02.730

Michael Palumbos: so important.



01:01:03.000 --> 01:01:07.380

Russ Alan Prince: And it's not happening, it just doesn't happen very often.



01:01:07.770 --> 01:01:08.670

Michael Palumbos: We live.



01:01:10.350 --> 01:01:15.360

Michael Palumbos: We live in a world where many advisors, think about assets under management.



01:01:15.750 --> 01:01:22.740

Michael Palumbos: And once the assets are there, they kind of tend to just manage the assets and the value is brought when.



01:01:23.010 --> 01:01:31.740

Michael Palumbos: All these unique ideas or sometimes they're not even unique it's just that we're talking about them and exposing them and educating them in looking at.



01:01:32.460 --> 01:01:44.340

Michael Palumbos: Their wealth, not just from an investment perspective, but also from an estate to business a retirement financial independence, a transition, you know all of the different texts perspectives.



01:01:44.700 --> 01:01:52.860

Michael Palumbos: That that it makes a big giant difference and that's the value that really is added when you have the right team around you.



01:01:53.280 --> 01:02:11.610

Russ Alan Prince: Exactly by putting that expert team together by having a coordinated just can have a bunch of great brilliant people floating around here you're going to get nothing by having a coordinated you're going to end up the business owner, the family business is going to end up.



01:02:12.900 --> 01:02:23.670

Russ Alan Prince: With all the possible advantages that are available, and this is what the super rich do the people worth hundreds and hundreds of millions of dollars of doing.



01:02:24.300 --> 01:02:39.810

Russ Alan Prince: This is what everybody can do and slowly, I feel it is starting to become more common among more people more professionals but I said slowly, and I mean you know snail slowly it.



01:02:39.810 --> 01:02:40.350

Michael Palumbos: looks like.



01:02:41.100 --> 01:02:54.930

Russ Alan Prince: It is not happening fans, so I tell people it is your responsibility, I tell the wealthy I tell the business owners it's your responsibility to put your to be selfish.



01:02:56.160 --> 01:03:05.760

Russ Alan Prince: single family office mantra is family first, you have to think of you and your family first right, and then you have to ask questions.



01:03:06.240 --> 01:03:15.600

Russ Alan Prince: And you have to be inquisitive and you have to push when people I mean I remember it's it's really entertaining at this point.



01:03:16.320 --> 01:03:33.720

Russ Alan Prince: When I see clients say to professionals, so the client goes up into functional tell them what they're going to do, and the client says, I don't understand and i'm serious, very serious the professional than says the same thing louder.



01:03:35.730 --> 01:03:54.060

Russ Alan Prince: Now that's that's an old joke, but i'm seeing it for real so i'm thinking to myself well this doesn't make any sense or they say oh here's my other one when the professional says trust me oh that's doesn't make any sense at all trust you can you just if you can't explain it to me.



01:03:54.300 --> 01:04:03.690

Russ Alan Prince: yeah what's the trust yeah right, so what we're getting at is, I want to convey is responsibility of the business owner.



01:04:04.050 --> 01:04:16.260

Russ Alan Prince: family business on if they want to make sure their family goes on for generations, if they want to make sure the kids are taken care of they want to make sure the different generations are addressing them out of the way they want.



01:04:17.820 --> 01:04:30.270

Russ Alan Prince: it's their responsibility to think about what they want to accomplish to be i'll say appropriately cynical when they are just told things and to.



01:04:30.840 --> 01:04:44.790

Russ Alan Prince: really start asking questions so that they are comfortable and understand if they do that it's a high probability that they're going to get much better results than they ever would have otherwise gone yeah.



01:04:46.680 --> 01:04:53.040

Michael Palumbos: sage advice, Sir, so I just want to say thank you for joining us, this has been.



01:04:53.490 --> 01:05:00.150

Michael Palumbos: A great conversation, you and I know we could probably sit here for eight hours discussing all these things and putting it together and trying to solve.



01:05:00.510 --> 01:05:09.180

Michael Palumbos: You know these issues for everybody, but I think the you know the walk you know when people are walking away from this conversation it's you know.



01:05:10.050 --> 01:05:19.800

Michael Palumbos: If I were summing it up it's make sure that your your your team is focused on the family's objectives and what you're trying to accomplish what are the end results don't worry about the.



01:05:20.130 --> 01:05:27.630

Michael Palumbos: techniques first you get worried about the people in your in your objectives and then you know, make sure your your.



01:05:28.290 --> 01:05:33.810

Michael Palumbos: politely cynical I think that's a really, really great thing make sure that they're educating and showing you.



01:05:34.110 --> 01:05:42.900

Michael Palumbos: You know these techniques, how does, what are the pros and cons of these different techniques as we're going through, you know that will help me get what i'm trying to you know to do.



01:05:43.560 --> 01:05:58.620

Michael Palumbos: And it's okay to stress test and i'll even throw out russ one of the things that I have started to do even with my own clients is to say, you know you may not want to, but if you buying a new car every two to three to five years.



01:05:59.580 --> 01:06:16.890

Michael Palumbos: it's okay to check on me and bring in another advisor and say let let them stress test your situation without my without me doing it and seeing you know if we're missing anything there's you know, and I would you know.



01:06:17.250 --> 01:06:29.460

Michael Palumbos: sanction to say that doesn't happen, too often, because I have been listening and doing doing the right work but it's a okay to say, let me look at what another team brings to the table, maybe every five years.



01:06:30.060 --> 01:06:38.820

Russ Alan Prince: yeah I think you hit it on the head all around, and I think that if people are taking your advice they're going to end up with.



01:06:40.050 --> 01:06:41.100

Russ Alan Prince: Much more.



01:06:42.930 --> 01:06:58.110

Russ Alan Prince: they're going to end up with results much more aligned with where they want to be and how they're going to and it's going to get them the most cost effective manner it's the way the super rich are approaching this is the way I think everybody should yeah.



01:06:59.070 --> 01:07:08.610

Michael Palumbos: So, ladies and gentlemen, let's say thank you to Ross Allen prints for joining us, you can find russ he's so easy to find Ross Allen prints just Google him and there's.



01:07:08.850 --> 01:07:12.810

Michael Palumbos: articles and books and tons of things, and if you happen to be one of those families.



01:07:13.050 --> 01:07:22.200

Michael Palumbos: that's working on a multi family office or you know, a single family office and you're looking for some help russ is definitely you know a great resource to help you with those things.



01:07:22.710 --> 01:07:33.330

Michael Palumbos: So again, my name is Michael Columbus with family wealth and legacy in Rochester New York, and thank you for joining us, we look forward to having you on one of our future shows.



01:07:33.630 --> 01:07:34.770

Michael Palumbos: Have a great day, everybody.

If you’re a family business or a family business consultant and want to be on the show, share your story and help other family businesses, send us an email to or fill out a contact form here!

*not affiliated with Lincoln Financial Advisors Corp.

Michael Palumbos is a registered representative of Lincoln Financial Advisors Corp. Securities and investment advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. Family Wealth & Legacy, LLC is not an affiliate of Lincoln Financial Advisors Corp. Lincoln Financial Advisors Corp. and its representatives do not provide legal or tax advice. You may want to consult a legal or tax advisor regarding any legal or tax information as it relates to your personal circumstances.