Family Business Audiocast | Episode 67 | Susan Schoenfeld
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R. Adam Smith: Welcome to the Family Business Audiocast on LinkedIn. I am R. Adam Smith, creator of this Audiocast series. As an entrepreneur, investor, founder, investment banker, and board leader the last 25 years, I'm fortunate for my many experiences within the family firm industry. A brief comment on why I created this broadcast. Private companies are a passion of mine having grown up in a family of entrepreneurs and having engaged for two decades in deals, strategic transformations, investments and boards, with an array of fascinating family enterprises, family firms, and family offices. I founded this series to offer a useful platform for listeners to hear from veterans, academics, and leaders in the fast family firm ecosystem. Whether you're a family business owner building, running, or advising a family office, or just expanding your family office activities, I hope these conversations are useful and enlightening. Now it's time to turn our attention to our accomplished guests on today's episode.
Welcome to the Family Business Audiocast and a warm thank you to our live audience today and for those listening in the future. On this episode of the Family Business Audiocast, I am joined by Susan R. Schoenfeld, JD, LLM, CPA, MBA, and CEO and founder of Wealth Legacy Advisors. Susan, it's awesome to have you here today. I'm glad I got through all the acronyms and accomplishments.
Susan Schoenfeld: I'm happy to be here today, Adam. Thanks for inviting me.
R. Adam Smith: Absolutely, finally got you on. So a bit about Susan, she is a recognized thought leader for families of wealth, helping them to navigate the human side of legacy and also stewardship and multi-generational wealth transfer. Susan brings a rare combination of experience across law, accounting, family office leadership, and philanthropy. After starting her career in trust and estates law, Susan spent 14 years running the Trust Administration Department of a White Shoe Alternate Worth Trust Company, followed later by her role as an ambassador for a half a billion dollar single family office. And then later, she founded her company, Wealth Legacy Advisors LLC. Wealth Legacy provides families and family offices with many practical tools in the family office, family firm space addressing legacy, governance, succession, philanthropy, and next gen development. Of course, Susan's also a professional keynote speaker. And her work emphasizes that wealth management is not about just the outcomes, as we often discuss on this podcast, but also a broader range of matters, creating family-centered cultures and creating those cultures that support leadership, collaboration, and shared values for the long term. Susan is also an educator training multifamily office teams and presenting programs for next gen family members, also women of wealth and mother-daughter leadership development. Yeah, It's awesome to have you on the show today. You ready go?
Susan Schoenfeld: I am excited to get started.
R. Adam Smith: Okay, great. Let's talk about your firm a bit, Wealth Legacy Advisors, based in New York. As we said, you specialize in family stewardship, governance, continuity, leadership succession planning, as well as generational wealth transfer, as well as philanthropy, coaching, educational programs, a lot there. You focus on the integration of different elements of the family and their family office or family culture, their family enterprise. Of course, we talk about family enterprise mostly on this show, not just the family office entity itself. Love to hear about your firm initially, then we'll get into a chat.
Susan Schoenfeld: Great. So as you've mentioned, Adam, I have a lot of letters after my name. On the business side, I have the CPA and MBA. And on the legal side I have the JD, which is the law degree and the LLM, which is the Masters of Law and Taxation. After my first chapter of my career as a practicing tax and trust and estates lawyer, I had my aha moment, my light bulb moment, and pivoted to my second chapter and spent nearly 15 years as principal and fiduciary counsel at a white shoe wealth management firm catering exclusively to ultra-high net worth families. While there, I noticed that all the families kept asking me the same question. What are other families doing to raise their children and grandchildren in an atmosphere of wealth and still have them grow up to be productive members of society, who want to make the world a better place? That inquiry caused me to leave the wealth management firm to become the family ambassador at a $600 million single family office, serving as the liaison between the family office and the multinational family members, far flung across four different continents, and creating a plan to identify and develop the next generation of leadership in that family. Then back in 2013, 13 years ago, I embarked on the third chapter of my career and launched Wealth Legacy Advisors, WLA, with a big idea that what keeps families of wealth up at night is not their investments, not their taxes, and not their estate plan, but rather raising their families in an atmosphere of wealth to become competent and confident stewards of their wealth. I don't provide any investment advice, legal advice, or tax advice, and don't sell insurance or any other product. But I use those skills to help inform the work that I do as a thought partner to ultra high net worth families about, what I like to call, the human issues of wealth, their legacy, stewardship, and governance.
R. Adam Smith: Thank you so much. Okay, moving into your professional journey you did start in law and accounting, and then into family office leadership. Of course human capital and external advice is really essential in this exploding and fragmented and huge industry. So it'd be interesting to talk about that a bit, how you came from a practitioner role into family office leadership and now as a super consultant, and just love to talk about your personal narrative for a bit.
Susan Schoenfeld: Yeah. As I said, it's really been three chapters of my career. And what I do now is what I describe as being a thought partner to these families and helping them navigate the difficult rocks and shoals of being a family of wealth and all that comes with that, which is often, as I said it's not, their investment portfolio that's keeping them up at nights unless there's been a particularly volatile week in the markets, which we've had. And it's generally not their taxes unless they just got a letter from Uncle Sam. And it's not even their estate plan unless their golf buddy at the country club just had a heart attack. What's keeping them up at night is how do I preserve my legacy? How do I think about my legacy, about who my family is, what we stand for, and how do I build that and craft that in a thoughtful and intentional way?
R. Adam Smith: Thank you for that. And further into the, the philosophical side of, how you approach the relationship and this thought leadership with your families. Of course, the families are super varied and there's a lot of psychology and ego and hesitation and the psychological balancing, of course, working with families. Today we'll talk mostly about culture and collaboration and trust and the softer power, but of course, as I focus mostly on the hard power and doing M&A and transactions and wealth creation, wealth investing, wealth expansion, wealth catalyst. But in, in that catalyst of large transactions, there's a lot of the soft power and psychology that goes on in general, and also in the next gen, and also imposter syndrome and fear and greed and all those things. Let's talk about this, your approach to the intergenerational collaboration and building trust within the families and talk about some of these actionable lessons that are the most important around the philosophy of collaboration.
Susan Schoenfeld: Very true. It is about building in the family's philosophy, and for me, the important thing is to start with the big picture first. So before we get into details with a family, I like to start, as I said, with the broader questions. What do we stand for as a family? What are our guiding principles? What does it mean to carry our name and our legacy forward into the next generation and beyond? And all importantly, what will hold us together when the chips are down? And these foundational ideas becomes the compass that guides more specific discussions and decisions later on. So as I often say, little kids love bedtime stories, and part of what I do is help families craft their family's story in a way that it can be told and retold consistently from generation to generation, to even very young children, as well as to incoming members of the family through marriage. For example, shaping that story of, say, how grandma and grandpa started a small corner store that's now a nationally known retail chain, and the family's values that went into creating the family's success becomes part of the family lore. It becomes part of who we are and what we stand for as a family. I worked with a family during the heart of the pandemic who had created their wealth, as many do, through sacrifice and hard work, as well as vision and risk taking, of course. A big part of the work that I did with this family involved helping them give voice to and identify their values and how they were going to epitomize those values and teach them to the next generation. And it was really funny, one of the daughters told me that her teenager had Zillowed their home to see what it was worth. Talk about an unexpected teachable moment, but the story gets better. The teenager also Zillowed their friend's home, and so learned not only that their family was wealthy, but comparatively less wealthy than some of their playmates. And the client said to me, "So how do we address that in our parenting?" These are real issues. Those of your listeners who think that their kids have no idea that they have wealth, there's this wonderful thing out there called the internet. Your kids use Zillow to see what your home is worth. They Google you, they know more about you than you think they do. And even if somehow you miraculously escaped your kids knowing about your wealth at Thanksgiving dinner, when after dinner, the grownups were all having coffee and dessert, and the kids are all upstairs talking. If your brother-in-law has told his kids about the family wealth, guess what? Now your kids also know. Pretending the wealth doesn't exist may be more comfortable for you if you want to play that ostrich game. But your kids see how you live, they see how you travel, and they see your home in contrast to others. I once sat in the library of an enormous home, and the client said to me, "My kids have no idea that we're wealthy because we live in the smallest house on the block." And I said first of all, it's a really nice block but your son is 17 and he's about to go off to college. And yes, it's possible that his college roommate is also going to be from circumstances like yours, but it's also equally possible that he might be a scholarship student from much more modest circumstances. And I know that these are scary conversations to have. The so-called money talk is often scarier for parents than the dreaded birds and bees talk. But sometimes having a neutral third party to facilitate those conversations makes them a little less threatening. Interestingly, you talked about trust and building a threshold level of trust, and that's a critical component of planning for a family meeting, and that's not always intuitive or easy. I worked with a family a number of years ago for whom I planned a family meeting. There were four branches of the family. The wealth creator generation had a son and three daughters, and based on their family culture, the daughters were sent away to boarding school on another continent, and they stayed there and married and had families there. But the son stayed in the home continent and was groomed to take over the family business one day. And he did. And by the time the son eventually sold the business and that family business had its liquidity event, the parents had long since passed away. And as I said, he sold the business, and now there was a single family office that took care of the family at large's assets, investments, and other family office functions. The family office engaged me to plan a family meeting to, in large part, identify, develop, and foster the next generation of leaders in the family. But as part of my advance process I learned that the four branches of the family barely knew each other, much less had any kind of common trust element. So I identified one member of the next gen of the family who was a photography enthusiast, and I played Sereno de Bergerac and I whispered in her ear, and together we organized a family photography exhibit. We reached out in advance to every family member who was going to attend, and I asked them to send in a photo, not necessarily a family photo. And in fact, we discouraged family photos, but we asked for a photo that spoke to them some reason. Maybe it was a special vacation picture, or a work of art, whimsical that they thought was interesting. And so I suggested that photographer family member make a little exhibit of all the photos submitted, and then we walked around the room, and I encouraged each person to speak about why they chose their photo and why that photo spoke to them. In that way, they were able to share something personal about themselves without defaulting anything too personal to people who were essentially strangers. And in that way, they were able to get to know each other in a really safe space and start to develop some trust in one another. So with every family, you have to find a different way in, but it is critical to actually find that way to build that level of trust because without it, family meetings, family governance sessions, and any of this hard work is just not going to be successful.
R. Adam Smith: Okay, great. So moving into governance, succession and next gen leadership, this is a big one. Of course, the succession planning is becoming such a massive issue in large families and just in general, I think culturally and generationally, which then raises the bar of the importance of these governance structures that balance the responsibility of the entity to, incorporate the next gen, the children, but also the importance of the organization itself. I think there's a bit of a tension there between the focus on the next gen and children. Their preferences, and then the anchoring of the mission of the organization, the wealth itself. That implicates family office, family advisory councils, governance, fiduciary duty and just these structures to create long-term sustainability. And as we talk about in the podcast, often legacy is not just about the entity itself, or the children, it's also just about the continuity of the wealth itself. So lots to unpack there, but over to you.
Susan Schoenfeld: Yeah. There's a lot to unpack there. So one major segment there is talking about governance and I'll address that first, and then maybe after that, we can talk about leadership succession planning. That is as you say, ultimately what building a legacy is all about. But starting with governance, it's really just a fancy term for saying, how do we make decisions together? And if we're talking about family governance, that question becomes, how will we make decisions as a family? And for the family enterprise, how will we make decisions on behalf of the family enterprise? And more importantly, how do we agree now to put a decision-making framework in place today while everybody's getting along that will still guide us later when disagreements inevitably arise, because they will. One of the most valuable things a family can do is establish a structure for decision-making while the relationships are strong and everyone's aligned. In other words, when communication is open, perspectives are collaborative and everybody's holding hands. That's the moment when people are most willing to create something fair and balanced, something that will work not just today, but in the future as well. I compare this to what happens when two business partners go into business together and sign a buy-sell agreement. When the partners create that agreement, they both recognize that someday one of them will be the exiting partner. But they can't predict which one of them it will be, so they work together to design terms that feel fair for both sides, because they're thinking ahead to a future moment when circumstances might change. Family governance works much the same way. You're creating a framework today that everyone agrees will guide decisions tomorrow, even during difficult or emotional moments, and it can take several forms. On the business side, it might include formal documents like bylaws or an operating agreement that outline how the company will be run, how decisions will be made, and even how distributions will be determined. And on the family side, governance can look a little different. Many families begin with a mission, vision, and value statement, a shared articulation of what this family stands for and what principles will guide their decisions. And some families even go further and develop family bylaws or even a family constitution, much like a country constitution. This provides a broad framework that defines expectations, responsibilities, and shared commitments. Another critical component of governance, one that families sometimes overlook is involving the rising generation. If you want younger family members to respect and follow a governance structure, they need to feel that they had some role in shaping it. That doesn't mean they need full decision making authority right away. They may not yet have a vote, and they certainly may not yet have a veto, but they should have a voice. Giving the rising generation a seat at that table helps them feel invested in the system you're creating together. It also helps them to learn how the family enterprise works and how thoughtful decision making happens over time. And as you said, some families formalize this by creating a junior advisory council or a junior advisory board. The group of younger family members can meet, discuss issues, and offer recommendations to the main board or leadership group. And it's a way of building leadership skills and engagement long before the next generation steps into formal authority. And there's an important psychological reason to do this. Research shows that people are far more likely to support a decision even if it doesn't ultimately go their way, when they feel their voice was heard during the process. Being part of the conversation creates that ownership and commitment because at its core, governance isn't about rules for the sake of rules. It's about creating a shared understanding of how we're going to move forward together, how we're going to make decisions when challenges arise, and how we're going to preserve both the enterprise and the family relationships that support it. And when families take the time to build that framework thoughtfully, they create something incredibly valuable, a structure that can sustain them not only in good times, but when the path gets difficult. The most important part of building a family governance structure is being sure to build in a mechanism to amend that structure as circumstances dictate down the road. It doesn't have to be easy, just as amending a country's constitution is not an easy process, but the amendment framework should be built into the governance system right from the start.
R. Adam Smith: Are those amendments mostly just within the family, or are they mostly on a council or board or governance structure rather than informal structure?
Susan Schoenfeld: Everyone is different. That's a great question. And every family decides for themselves what they want that amendment process to look like, and it's my job to make sure that they think about it, but ultimately the decision is theirs. I can guide them on what I think will work best, but at the end of the day, the family knows how they communicate and how they operate, and sometimes it's by branch of the family, and if it's a large enough family, there's representative government where each branch sends one representative to a council.
R. Adam Smith: That's great, thank you. Very subtle and complicated at the same time. Again, next gen succession, we talk about often, and it becomes very timely and rather urgent and complicated, again, when there's a large asset or the large asset, main asset being sold by the family. It raises the issue of where's the wealth going, what are the roles, and all the power grabbing and pride and ego and fear around that wealth creation. That's where I tend to focus in guiding strategically, philosophically and financially families in the, the sale of their largest asset. That really gets you into also the coaching, the ongoing education, let's say of training and the dialogue. We discuss the importance of that dialogue and collaboration with some of your industry colleagues such as, in Hippocampus, and FBN, and Ultra Analytic Institute. We had Jim Grubman, Emily Bouchard, Christina Wing recently coming up actually, Dennis Jaffe. We've covered a lot of this importance of collaboration. If you could also talk about that, in terms of the training and engaging and the practical tools around the education would be great.
Susan Schoenfeld: Absolutely. So sometimes RIAs, multi-family offices, or other professional advisors to ultra-high net worth families want to provide education programs for their top clients, such as next gen education programs or women in wealth or mother-daughter leadership initiatives, but they don't have the bandwidth or internal resources to create a program like this on their own, so they engage me to organize and present these programs, and their clients love that they're getting the important tips and techniques they need to navigate the difficult task of raising competent and confident stewards of wealth. And sometimes I'm engaged to educate the professional advisors themselves, whether internal training programs, estate planning councils, or recently professional advisor events hosted by community foundations across the country. And my message there is that, in today's turbulent world of ruthless competition in the financial services industry, business can be won or lost on subtle differentiators. The stakes have never been higher, yet too often firms approach their prospect and client meetings as nothing more than performance and product reviews and lead with their pitch books. They're squandering a critical chance to focus on what keeps client families up at night and often lose those business opportunities to firms who treat clients as families, and not just as the almighty assets under management. And as you mentioned at the top I'm a keynote speaker, and I believe I have the secret sauce to help them win and keep more business. My tongue-in-cheek title for my talk is called 'A Hard Look at the Soft Issues of Family Wealth'.
R. Adam Smith: That's awesome. Thank you for that. Let's move into a related topic of just the lessons of the human challenges in this multi-generational wealth dynamic. We know there's a exploding amount of larger family offices, and some portion of them have children, some portion don't have children, and those that don't have children, of course, they have to hire externally and there's a succession plan there that can be a bit intimidating, again, for the large asset and creating consensus in the human capital side. Perhaps just talk about the human side of wealth management for a bit and, how do you facilitate consensus, in general, but also ramping up to a large transaction?
Susan Schoenfeld: Yeah. So most of the families who engage me are experiencing some pressing business transaction or transition that's causing challenges at the intersection of the family enterprise and the family dynamic, maybe in an operating family business, or as I like to call it, in the business of the family, which could be the ongoing investments or even the family's philanthropic vehicle. And these families bring me into their system because they trust that my deep background in law and business advising families like them for my entire career will enable me to understand and not inadvertently disturb the complex technical planning agreements and transactions that are already in place. For example, I worked with one family recently where their family-owned business wanted to engage in a very substantial business transaction, but one of the siblings vetoed it, and it turned out that the veto was payback for her long held childhood grudge against her brother from many years ago. And that's what I mean when I talk about the intersection of the family enterprise and family dynamics, that human side here. And second, are the families not experiencing an immediate business crisis, who want to get ahead of the curve by engaging in governance planning, like we talked about, to set the next generation up for success and create structures for better communication and decision making before the inevitable issues arise. I've been engaged by multi-generational family-owned businesses, family offices, by trustees of family trusts to foster responsibility and common bonds among beneficiaries, and by parents and grandparents to facilitate family meetings and engage in mission, vision, and value exercises, which might result in family constitutions and the like. But in my experience, the biggest human challenges in the multi-generational wealth often boil down to some version of mom loved you better or dad love you more. You were picked to be the head of the family business or family office, and the rest of us are standing on the outside looking in with our noses pressed up against the glass. And that's exactly what the bottom line turned out to be with the family I worked with a couple of years ago. One of the sisters was hired by the father to manage the family's investments, and her brothers objected to how that arrangement was structured. But during a series of family meetings that I facilitated, we uncovered the real iceberg below the surface, which was that the brothers felt left out that they weren't getting as much of their father's time and attention as their sister was. So my approach to facilitating consensus is a concept that I describe as good enough. What's a compromise that everyone can live with that everyone will feel is good enough? If one party gets everything they want, it's a zero sum game, and that means the other side got nothing they wanted. So let's find a way for everyone to get enough of what they want so that they can live with this compromise. I have a friend who calls this approach everybody loses because nobody gets exactly what they want, but I prefer to call it good enough, as in everybody gets enough of what they want, that the compromise is good enough for them to go along with it. At the end of the day, I see my job as guiding families to find a way to accomplish their current transactions and transitions, but more importantly, helping them establish governance structures, systems, and other tools to provide them with a framework to make those difficult decisions tomorrow.
R. Adam Smith: Thanks, Steph. That's really good. We do cover a lot about the subtleties of intergenerational planning and, family conflict. I think just continuous communication and collaboration mindset is important, but then also bringing external voices we have discussed those external voices with some of your colleagues. Some particular conversations with Richard Wolkowitz and Christina Wing and her colleagues, Marianne and Vicki, I think we covered that topic pretty specifically in the past. Again, the collaboration mindset of, of the human side and family capital that the Alternate Worth Institute covers, I think is really important to think more holistically. So the last topic of, let's say, next gen values is where I wanna finish up and, just talking about takeaways to create stewardship and long-term vision and creating a culture within, again there's that pressure of bringing in external advisors, external people, external C-suite, but then also the respect of the children. And then from there, also the children's capabilities intellectually versus their philosophical, generational interests. So there's a very complicated dynamic there. And ultimately, I think the tension is, what is the focus? Where is the priority? Is it the wealth of the primary company and the continuity of that wealth, or is it more of a smooth, collaborative dynamic within the family that might, may or may not prioritize the wealth itself?
Susan Schoenfeld: Yeah, so my best piece of advice for next generation family members stepping into the leadership role is a quote from George Bernard Shaw, the Irish playwright who famously wrote Big Million, among other things. And he said the single biggest problem in communication is the illusion that it has taken place. This emphasizes that sending a message is not the same thing as being understood. So my advice is listen as much, if not more than you speak. Understand all the circumstances before you decide. Ask lots of questions and get buy-in from all stakeholders to the extent you can. Honor your family's past, its values, its history, and its story, even as you may be updating and refreshing how decisions will be made going forward. This is an important part of being a steward of your family's legacy. And my last tip is to find roles for family members who want them. This includes the retiring family, patriarch or matriarch who is reluctantly passing the torch to you. Find a role within the family enterprise for them that adds enormous value to the enterprise, but doesn't clash or overlap with your new leadership role, because ultimately your job will be to integrate the family culture and vision that existed before your leadership term with the new set of circumstances that didn't even exist at the time the family enterprise was first created. And don't forget that from day one when you step into your new leadership role, your most important job will be selecting and beginning to groom your own successor.
R. Adam Smith: Yeah, thank you for that. That's awesome. That's a wrap today. We could probably talk about five more hours, of course, but it's great to have you finally on the podcast and to learn more about you, of course and your organization. People can find you on LinkedIn and also at Wealth Legacy Advisors. Is there anything else you'd like them to know about reaching you or your company and your core mission?
Susan Schoenfeld: Thank you. Yeah, you can find me at WLA LLC, as in wealthlegacyadvisorsllc.com or susanschoenfeld.com if it's for public speaking. And my final thought is creating your legacy is about much more than money. It's about being intentional about your values, crafting your shared family story, and preparing the next generation to lead with purpose.
R. Adam Smith: Thank you, Susan. That's awesome. So today, we covered the human-centered approach to family wealth, of course, and the integration of values as well as governance and succession, and the importance of the continuity of ongoing conversation usually with external advisors and experts around the coaching and education flow for the family, but also for next gen.
And you know, Susan said, creating a legacy is not just about the money, it's all of this values, all the collaboration, all the preparation to really get to a purpose-focused workflow. And on this podcast, we talk mostly about legacy inevitably. So I think just a last statement, like, what do you think is the core definition of legacy for most of your family clients?
Susan Schoenfeld: At its core, legacy is about who are we? What do we stand for? And what do we want the world to know about us after we're gone? And what do we want internal members of our family to know about us after we're no longer here to craft that story?
R. Adam Smith: Love it, thank you. You got that. I'd like to thank you for joining today. Susan R. Schoenfeld, our distinguished guest on the Family Business Audiocast. We were reminded today that wealth is very powerful, particularly when it's paired with this thoughtfulness around stewardship and culture and intentional leadership for the next gen and leadership within the large family enterprises.
It's great to see that your work focuses on this human side of wealth, which I think is often run over or forgotten or procrastinated, in heated moments or when there's really intense wealth creation or transfer. And it's important just to keep that string going to ensure continuity and communication so that legacy can thrive.
So thank you so much for sharing your insights today and expertise.
Susan Schoenfeld: Thank you so much. I had a lot of fun and we had a good conversation. I appreciate your inviting me.
R. Adam Smith: We did, thank you. This is R. Adam Smith signing off. Please stay tuned for the next episode of the Family Business Audiocast.
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Explore the strategic intricacies of family business success with the RAS Family Business Audiocast. Join R. Adam Smith as he delves into exclusive discussions with global leaders shaping the future of private wealth and enterprise. Each episode offers a rare glimpse into the core decisions driving prosperity in high-stakes markets. Tune in to gain expert insights and innovative strategies that empower family businesses to thrive across generations.
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