Interview with Todd Fithian on Inter-disciplinary Professional Collaboration

Interview with Todd Fithian on Inter-disciplinary Professional Collaboration

Article posted in on 23 June 2016| comments
audience: National Publication, Two Hawks Consulting, LLC, Todd Fithian | last updated: 23 June 2016
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Summary

Planning for high net worth clients should include professional collaboration; adding philanthropic planning makes collaboration a necessity. Understanding what true collaboration is and how it works is not well understood. This series of conversations is meant to open the door to making collaboration standard practice.

Click here to listen to the audio version of this interview.

Randy:    Good morning. This is Randy Fox, and I am once again with Todd Fithian from the Legacy Companies in Boston. Good morning, Todd.

Todd:    Morning, Randy. Thanks for having me.

Randy:    We have agreed to bite off a rather big portion. We're going to dig into a subject that’s near and dear to my heart, and that subject is collaboration. We're going to look at it a lot of different ways. Today, we're going to start by talking about collaboration among professionals, which is a big challenge. A lot of people give it lip service, but not a lot of people do it right. Where would you start on that subject, Todd?

Todd:    I think you're right. I think that there's an intention out there for all professionals to want to say, "Yeah, you know, I'm collaborative. I'm not undermining. I'm not trying to stall things or disrupt things." I think to a certain degree, we all want to wake up in the morning and feel like we play good in the sandbox. What I've found, and this comes more from my business partner Chris Venn . Chris is a marketing guru and is always reminding me of the fact that words really matter. As we've done a lot of studying and actually talking, speaking on this topic of collaboration, the one thing that has really become clear to us is that we're saying one thing, but our definitions are all a bit different.
When we say words matter, what I find is when most people are talking about collaboration, when they start to talk to me and share with me exactly what it is they're doing and how that works and how they're interacting with the other advisors and the client, it's really more … From my eye, it's more about cooperation and that’s how I categorize that. We very quickly get to that point where they're like, "Yeah, I can kind of see how you're putting it in that box around cooperation," meaning we're not getting in the way of one another.

We're letting everybody kind of have their say, but we're really not working on a very consistent set of goals and values and hopes and dreams and wishes and whatever, technical, real financial technical information. We're not working on the same set of criteria, which, in our view at Legacy anyways, is what's required in real collaboration, when you're working on the same set of data both tangible and intangible.

Randy:    Yeah, it's not that cooperation is bad. It does produce okay results often because everybody seems to be pulling in the same direction, but when you collaborate, you can get remarkably different results because you're all approaching the same problem with your own set of filters and viewpoints. You can often get a much better result for the client because someone sees something that you didn’t see, so they covered a blind spot that you may have.

Todd:    I think you bring up a really important point here. In a lot of my presentations on this topic, I put a box. You might even have seen me do this at one point in time or my brother Scott. You put this box up in the middle of a screen, and I ask the audience, "What color is this box?" Obviously, they go to the immediate box that they can see that’s colored in and so you get that perspective. Some people actually go beyond it and say, "Well, the box is white," which is the background in the slide, so you get some that are even thinking beyond the color that's in front of them. The reality is we go on to build the box as a three-dimensional box and every different side has a different color.

The colors represent the fact that whether you're an accountant, whether you're a lawyer, whether you're a financial advisor or some other professional with a specific expertise in competency, we all approach things from our view, our perspective, our competency, and our expertise and experience. Right? If we went into a room and we gave an investment person, an insurance person, a financial advisor, an accountant, and a lawyer all the same problem to solve, they would all come back with a solution and we would probably have many actually really good solutions.

To the point you just made earlier, Randy, where we are going to get the best solution and where we're going to get the best outcome for that client, for that family, is where those advisors all bring their ideas, their experiences, their expertise and competencies to that discussion together, and that’s where they come up with the best collaborative outcome. They challenge one another. In doing that, I guess the way I just communicated it, it actually sounds quite easy, but clearly, there's a fair bit of challenge in actually doing that.

Randy:    Certainly, every person, every human being has an ego, and our ego wants us to have the best answer. It's very difficult for many people to stand out and say, "Well, that other guy's idea is really probably better than mine." I think that's where a lot of the difficulty comes in. We all have so much pride in our knowledge and capability that we don’t want to be the guy that’s wrong, even at the expense of our client not getting the best answer.

Todd:    I think you keep teeing me up here, and I know you haven't seen us talk about all this topic all the way through, but you bring up one of the biggest challenges out there. We talk about three success characteristics is what we've kind of coined them as, and one of the biggest is ego management. You're so right, many of the people, especially, let's face it, that collaboration, real collaboration where it's required, where it's at its best, you're talking a certain level of wealth. You’ve obviously been involved with a lot of planning for some very wealthy families and obviously I would imagine, like all of us, some not as wealthy families. I'm curious to know where you see where real collaboration comes in from a level of wealth standpoint on that end.

Randy:    I think I would put it this way, Todd. I think it's really helpful if at a lower level, at a lower level that it takes place, because that's going to get better results. I think it is necessary when you get to a taxable estate or higher or where there's complex assets or where there is complex family relationships because of second marriages or whatever, it's more the complexity of the situation than it is the net worth. I will tell you that the higher the net worth, normally the more complex the situation. Certainly, in the taxable estate world, there's lots of planning decisions that need to be made that become more and more important. Certainly, as you're considering leaving children vast amounts of money, there's lots of decisions that need to be made. There's not a perfect answer to that. I think at a low level, it's nice. At a higher level, it's an absolute requirement.

Todd:    I think you gave the perfect answer, at least in my eyes, in this, in that it's important at every level. It's got a greatened, or a heightened, need, I guess I'll say, as you were talking about in the taxable estate, but there's more complexity and that obviously just makes it more difficult. It brings a lot of, I guess, a higher focus to the challenges around collaboration. I think even in the non-taxable estates, the fact that your financial advisor knows your tax person, if you're doing estate planning, and I hope you are, even with non-taxable estates, that your attorney that you're deciding to work with knows who your accountant is and knows who your financial advisor or your investment advisor is and at a minimum that they know who one another are and maybe even have those loose conversations.

Clearly, in the larger taxable estates, and that’s really where a lot of our work is focused, when I look at those success characteristics I was talking about earlier, we've kind of earmarked three of them, one being extreme. We're calling it ego management, that's one. The other one is that the focus has to be on client outcomes first. It has to be all about the client's outcomes and that’s really … We see that as a complete success characteristic of collaboration at that level of wealth, is where the advisors are all about putting that client first and that they know that by putting that client first, they will all win. It creates that win-win-win.

The third characteristic we talk about is that you have to have a method to the madness. You’ve got to have a process. You’ve got to have a way to approach the collaboration. What I mean by that, we have actually developed a model. What I'm talking about is how does the team come together, because today with technology … Look at you and I, today you're doing this interview over the phones. We use the Internet and different things of that nature. Collaboration, I think so many people think about sitting around a conference room table.

The reality is that it just doesn’t have to be that way anymore. Collaboration can be on a conference call, on a video conference, just on any of the various technologies that are out there. You have to have a way to approach it. How do we come together? When do we come together? When do we actually bring the client into the collaboration? When is it okay not to have the client in the collaboration because we're working on their best behalf? Things of that nature, but those are the three characteristics. You have to have a process, you have to have the client outcomes be number one, be first, and you have to be willing to put the ego behind you. We're all smart, we're all professional, successful, but that creates barriers and …

Randy:    They’ll stop.

Todd:    … and they'll stop collaboration dead.

Randy:    I agree, Todd. Those are all great points. I guess because I have this practice that works with people all over the country, I'm so comfortable using whatever technology is available to talk to somebody whether they're in Seattle or Los Angeles or Boston or New York or Maine or wherever our clients were. Putting things up on the screen and working with other advisors in the room and being able to talk to the client when we needed to talk to the client and only talk to the advisors when we were doing the things that were necessary behind the scenes to come to agreement so that we have decided that this is what's best for the client as a group. I think coming to group consensus is really one of the big struggles that we have in collaboration. Okay, what is best? It's not what's going to make me the most money. What's really the best answer for this client? Maybe the best answer is not to do this.

Todd:    I think you're right. I think that especially because you’ve got a lot … When you have a collaboration where you have a lot of very talented, successful professionals around, partly you can call it ego. You can also look at it a little bit differently than ego. I think ego sometimes shows up as confidence. Sometimes I think that those are misconstrued. If somebody really feels strong and right about something, it's not necessarily egotistical. That’s where it becomes a challenge, where they dig their heels in. The thing that I want to talk to you about that is that I believe that there has to be a leader in the collaboration. We've talked about it for years. There's the most trusted advisor and all of these different things, but I really … I'm looking at a really smart businessman that I'm actually starting to do some work with share with me this whole concept of you hear people using the term "coach" and this and that or "quarterback" in the team. He's shifted it and looking at it from a captain standpoint. The difference between a quarterback in the team who's kind of running the offense, is that the captain is actually appointed and selected because of their leadership. They're oftentimes … They're selected by their team as the point person on this relationship.

I really like that spin on it. I've been talking about this more and more. I think every collaboration needs to identify and bring a captain to the head of the table. Probably some of the characteristics around this might be the person that maybe has the closest and most trusting relationship with the client. It doesn’t have to be the person that is the most competent and the highest level of expertise in a number of areas, but, really, I think relationship is one of the things that really drives it.

They also have to have some real strong leadership skills, because to the point you were just bringing up, when you’ve got a lot of really smart people around the table, and opinionated people come with smart people, if I know I'm right and I feel really good about it, I've got a strong opinion about that, I want that to be heard. You need to have somebody in that captaincy role that I think is strong enough, but as a leader can bring that group together in order to get the right solutions moving forward for that client family at the end of the day.

Randy:    Right. The other thing is usually if it's a very … In a taxable estate case, there's, number one, a lot of moving parts. Number two, there's a lot of things that just have to get done and they have to be done in the right order and they have to be done timely and someone has to drive that process. Now at various times, it may be different members of the group that are responsible for getting parts of things done.

Someone still has to say, "You said you were going to have it by the 30th and it's now the 15th of the next month. We need this. How come it's not done? Why didn’t it get done because that’s holding up the next step, and the client says they want to get this step done.  Someone has to marshal all those forces to make sure that things stay on track, because otherwise, big cases lose momentum anyway. They just kind of wear out and get tired and people get bored and they want to do the next thing. It's very important to have someone shepherd the process from beginning to end.

Todd:    Couldn’t agree with you more. I think that just one last point on that is that I think it has to be accepted by the team. You might want to be in that role, but there's one element that is just not checking out that has you in that role. Maybe you have the leadership skills, but you don’t have the real connecting, on-the-ground relationship with the client or something of that nature. I believe that this role has to be appointed and accepted by not only the client but by the collaboration, by the team.

Randy:    Right.

Todd:    Listen, that’s easier said than done, but that’s the ideal. That’s what we're trying to create.

Randy:    Yeah, no, I think that’s a great model. Let me throw a curve into this mess, because I only throw curves from real life. Every now and then, you'll have a client who's had an advisor in their lives for twenty or twenty-five or thirty years. It could have been their college roommate, it could have been their best man at their wedding, it could have just been the guy that started with them when they started the business. That person isn't necessarily at the top of the heap in terms of capability, but the relationship is very important and entrenched. It's often very challenging to, without making that person look bad, but also to say there are other ideas that we have that they don’t. You understand what I'm saying? How do you manage that situation and still make the collaboration work, because that’s a challenge?

Todd:     My goodness, I've been involved with that. My brother Scott, actually my late brother Scott brought me into a collaboration. We were brought in, I guess, let me say that, to a stalemate situation with a very wealthy family in actually Texas at the time. This was like a Forbes 100 family. They had had all the advisors. It was one of those complex things, and I know you’ve been involved with many, second marriages, kids from both marriages, kids from prior marriages, kids from current marriage. They both had their own law firms representing them. They were trying to get the estate plan together, and we were brought in because it was stalemate.

They were stuck and they couldn’t move, and it was suggested that they bring us in because it was really a discovery piece that was missing. Everybody was really smart but just not working on the same set of principles and values and goals and all of that. One of the things that we learned when we came in, to get to this point you're making, was that one of the attorneys that was very tied in relationally to the family had never actually done the strategy that was being suggested by the team. He was really pushing back on it because he was uncomfortable, didn't want to be exposed professionally, a number of things.

I don’t know why, but my brother all of a sudden had this epiphany. We had an attorney friend who had done the strategy over a hundred times, and my brother decided to get permission from the family to bring in this other attorney to work alongside this attorney, not to displace the attorney that didn’t have the competency, but to allow him to be a part of it very much and to learn and to educate and to bring him along, but to bring somebody in who was a seasoned expert in doing it.

The long and short of that whole story is that we found that by having it be advisor-to-advisor versus my brother or another advisor on the team say, "You're not capable, you're not competent in doing this," attorney-to-attorney will really … I was blown away. They were able to have that conversation and it moved forward extremely successfully.

Randy:    I've had the same experience. What we have positioned it as, we tell the sitting attorney, "Why don’t we bring in someone to co-counsel, and really what you can do for your client, since they're your client and you have this longstanding relation, is you can be the advocate for them and a second set of eyes and learn at the same time." That’s worked fabulously, but it takes a lot of getting it wrong until you figure out how to get that part right.

Todd:    Yeah, yeah. Yeah, couldn’t agree with you more.

Randy:   No professional wants to be made to look bad in front of their clients. It's just you have to be very careful because that’s a really strong, often sacred relationship.

Todd:    Yeah.

Randy:    The second you start challenging that relationship, it can turn the client against you, and that’s the last thing you want to have happen. Most people mishandle that, as far as I've seen, because they're so afraid for themselves, right?

Todd:    Yeah. I'm sure we've mishandled it in our time plenty of times as well. I'm only sharing with you the biggest success. Successes come out of many failures, as we both know.

Randy:    You're wrong a hundred times until you finally figure out you don't want to do it that way anymore.

Todd:    Yeah, absolutely. I believe that it's natural for advisors to understand the importance of collaboration and want to do it, but there's these barriers that we just need to let go. It gets into a number of things, and we touched on several of them here, I think, in the discussion. Compensation tends to also be a big one.

Randy:    Yes.

Todd:    The one thing that I find is that … When I talked about the three success characteristics that we really try and drive in collaboration, putting the client first, if everybody is moving towards that model of this is the right thing and puts the client first, that each of the professionals in their competencies and their roles on that team is going to be fairly compensated for their roles. The challenge, I think, and you've seen tons of this, probably more than I have, Randy, but one of the things that I see, I still see it today, is that there's this discrepancy because of the compensation models. Accountants and lawyers, most of them, there are some ones that do some project pricing, but most of them are billing based upon their hours. You’ve got to do this work, and so that works out to this hourly.

When others are not billing for their hours, but billing for their knowledge and their technical expertise to be able to put the right products and strategies in place, sometimes those compensations are much greater. The paths that we've taken professionally have different compensation models. I think that that is the biggest thing. If we understand that this is the profession I've chosen and this other individual has chosen a different profession, does their solution get the client to where they need to be? If so, we need to be okay with that, otherwise choose another profession.

Randy:    If it gets the client where they need to be and the client is willing to pay whatever price it is, opt into the solution, it's the client's decision. It's not our decision out of professional jealousy to say, "Well, it's just a bad solution." That’s where one of the big hang-ups is. I think it's really important that advisors when they're building a collaboration get that stuff out on the table as early as possible because that will throw a monkey wrench into a case as fast as anything.

Todd:    Yeah, absolutely. I think you're right and make a great point there. It's really not about us and we can't get our egos in the way. It's about the client and it's about the client's choice. If that solution that’s being provided in conjunction with the overall strategy is getting the client what they want and why they want it, we always talk about that what and that why, then it's exactly what's trying to happen there.

Randy:    True. So we don’t go on all day, because I think we probably could, how would you like to wrap up our plunge into inter-professional or interdisciplinary collaboration?

Todd:    I think, just real quickly, that I know a lot of us are out there and are collaborating by their own definition in their own way. I think with some minor tweaks and modifications around putting a leader in place, and I talked about it from a captaincy standpoint, and having a process for how you're going to come together and how you're going to work and checking your ego at the door, being respectful of everybody's expertise and competency at the table, but working under a sane and consistent set of directives and guidelines by that client and what they're trying to accomplish and why, if you're all working on the same data and information together, you will get amazing outcomes. Everybody will win. That’s my hope from this and people reading this.

Randy:    I have been saying this a lot lately, Todd, that especially when you enter into charitable planning with a client, charitable planning is a team sport. No single advisor can do it by themselves. You have a couple of choices, which is to either get good at this, at collaboration, or not succeed. I don’t think there's any other option. It's incumbent on us as professionals to get as good at collaboration as we can possibly be for the best interest of our clients and customers.

Todd:    Absolutely. I think when you bring charity to it, the last thing I'll say is you've probably got to think about extending your seat at the table …

Randy:    Exactly.

Todd:    … and bringing somebody with that competency and with that expertise, because it's a different perspective and a different view that they can bring to that collaboration. Yeah, great point.
 

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