Set Ground Rules When Bringing Your Kids Into the Firm
By Murray Coleman December 5, 2014
Advisors hear the warning more urgently every day: The industry is going gray, and hiring fresh talent to serve the next generation of clients is critical to firms’ survival. But finding young up-and-comers who’ll fit in well with an established practice isn’t easy. So Mark Suszan, a Raymond James advisor in Bloomfield Hills, Mich., brought his 26-year-old son, Matthew, into the business.

Suszan had hoped a merger or acquisition would yield a suitable successor, but after years of searching he hadn’t found the right match. Suddenly, there was Matthew. “After college, he really didn’t know what he wanted to do other than be a ski bum,” says Suszan, who manages $150 million. “So I offered him a temporary staff position at my firm just to help him earn some money. Three months later, he told me he’d fallen in love with this business and wanted to make it his career.”

In theory, parent-child partnerships can solve a lot of problems, especially in terms of succession planning. But experts say working every day with close family members can be a challenge. Personal conflicts can easily spill over into the workplace. Meanwhile, if non-relatives at the firm feel left out, their resentment could potentially threaten the business.

“You’ve got to set some basic ground rules to help create a level playing field for the entire office,” says Lily Engelhardt, a Morgan Stanley advisor in New York who manages $200 million. Her daughter Natalie joined the practice earlier this year from another Wall Street firm where she had been an investment advisor. Lily drew up some guidelines, with input from her long-time partner. Natalie was asked to include all five team members on internal e-mails. As a junior member of the firm, she was expected to pitch in on mundane chores and to give other staffers a hand. “She’s learning the importance of respecting everyone else’s role in making sure our practice runs smoothly,” Lily says.

Mark Suszan
She pledged to keep mother-daughter discussions at work focused on clients — and to keep shoptalk to a minimum after hours. The rules are helping ease Natalie’s transition. “It’s important to give both of us enough space to grow as individuals,” she says. “Just because we’re working together, we don’t want to feel joined at the hip.” And mom is still mom. Lily insists that Natalie text her at night to say she’s arrived home safely from the office.

Brothers in Arms

When siblings join a parent’s firm, it’s OK to let them specialize — but not to the point where they erect rigid territorial boundaries, says Merrill Lynch advisor Stanley Heilbronn, whose New York practice manages about $1 billion. He’s been working with sons Greg and Andrew for more than 15 years.

Both had been technology-marketing executives who decided to get into financial planning after watching their father’s practice grow. Stanley says Greg had a knack for talking to clients about stock-option strategies, while Andy was good at sorting through retirement-plan options. Their dad encouraged them to pursue their own interests but made sure they didn’t get siloed. He has ensured that each son works on a broad book and that they take a team approach with new clients.

The Heilbronn Group’s page on Merrill’s website has a heartwarming photo of the managing director and his two VP sons. “It started out as a mentorship, but they always knew if they worked hard and learned the business it would turn into a true partnership,” Stanley says. “And that’s what our practice has become.”