Mike Godfrey of Cube Financial Planning gives his top tips on how to successfully work with family members which could become a developing trend as advisers contemplate their succession strategy.
Both my sons work with me at Cube Financial Planning although the idea of bringing them into my business was mainly triggered by them rather than me.
Originally I was quite nervous about it because over the years I’ve dealt with clients who have companies where the second generation comes through and sometimes it has caused some problems, both from a business perspective but also from a domestic perspective.
Leigh, who is our operations manager, joined my old firm FS3 in 2006 before we sold it to Thinc and joined us at Cube. He was doing a business studies degree at university but felt like that wasn’t the right direction for me so joined us. Jonny, who is our trainee financial planner joined us in 2009. He left colleage at the time of the credit crunch and initially we thought the firm was a temporary home for him to give the crisis chance to calm down but now he is very wedded to the business.
Overall I’d say this has been a success and I’ve had no regrets, but there have been some valuable lessons that we’ve all learnt along the way and some challenges. Here are the tips I’d give to any adviser looking to work with their family:
Tip 1: Let go of family roles in the office
You have to cut slack on all sides and put family roles aside. It’s easy to slip into the ‘father’ and ‘son’ roles, but when you’re working you have to be in a professional mode and think of your job roles. There has been times where I want to boss them because I’m their dad, and equally when my sons were younger they would still see me as ‘dad’ rather than ‘director’ and see some of my dealings as nagging.
You can’t completely divorce business from family when you work with your two sons, but I think we strike a good balance. We don’t have any rules about not discussing business at the weekend as I think we’ve all evolved to know when and when not to bring those things up and vice versa at work with family stuff.
Tip 2: Be business-minded with no preferential treatment
Even though the idea of my sons joining the business came from them rather than me, it did not mean we were just willing to give them a job no matter what; they still had to earn their place. You have to marry up the character to the role and make sure it’s the right role. Leigh has always been strong with IT and accounting so operations manager makes sense and Jonny’s strong point is him as an individual and his interpersonal skills.
You also need to make clear from the start that it will not be a guaranteed easy ride and a guaranteed job forever and your business is still a business. We can’t carry passengers in a small business.
You have to have your eyes wide open in that if it’s not going to work for whatever reason, you have to face the truth and if that is that someone needs to find their future elsewhere then that’s got to happen, just like any other employee. We established if things did not work, there’d be no hard feelings and we’d move on.
Tip 3: Don’t dismiss the advantages
Although there can be some challenges to working with family members effectively, there are a number of advantages which can’t be ignored. There was immediate comfortableness and trust with both sons that you have to build if it was someone not related. There is also a level of openness and we all get on well in the team.
My sons are from a different generation and it’s powerful to have that insight, especially in terms of being aware of IT, communications and marketing, and how to boost our firm’s business with those things. Leigh has even designed our own in-house cashflow modeling tool, which I wouldn’t be able to do.
Tip 4: Think about your succession plan
When both of my sons started at the business we gave them a 10% stake in the company in a bid to really motivate them and drive them to succeed. We didn’t bring them in the business so they could take over from me when I step down, but it is something we’ve talked about.
It is a nice reassurance they’re in the business and ultimately the business is their future with the firm’s other director Neil and they will have to make big decisions about what they want to do after the point I no longer want to be involved. It gives me options when I no longer want an active role in the business, and I’ve seen them working and help develop the business, I trust them and feel comfortable with them taking the reigns if that’s what we all decide on.