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HNW Family's Wealth Dynamics: Who's Really In Charge?

Joseph Reilly

18 June 2019

Regular Family Wealth Report contributor Joe Reilly, who has interviewed a number of prominent wealth industry figures for this publication, turns his attention to Kristin Keffeler, who is the founder and owner of Illumination360. Keffeler is an advisor and certified professional coach working with enterprising families, families of wealth, and rising generation family members. They discuss her interesting work on unequal financial dynamics in couples.

Joe Reilly:  I understand you have undertaken a study of what are called 'fiscal unequals', which are couples where the wife has more money. How are you going about it?
Kristin Keffeler: We are interviewing couples still married, at least for five years, but less than thirty, so they haven’t been married for so long that they have forgotten what it was like to be struggling and figure this stuff out. The female has more wealth than the male, so we are doing inherited not earned. So there are of course interesting areas beyond all that criteria, but we had to start somewhere. There are also the couples who have broken up, and we want to find out what goes wrong. We would also like to study same-sex couples.

Similar dynamic?  
Keffeler: The dynamic is probably the same with heterosexual and same-sex. But I think there would be some interesting nuances to tease out as far as gender roles are concerned. One of the challenges that occurs with fiscal unequal couples is that it challenges deeply held gender norms around providership, power, and decision making. This is even in a modern era when you would hope it would be post-gender roles. It tends to be emasculating for the men. They realize they don’t have any real power; they don’t have decision-making ability; her dad is more in charge; and he is not an equal driver.  

A significant wealth creator has a big presence in a family, especially when that wealth creator has made possible the funding for his children’s lives. The daughter who is the recipient of that comes into her partnership already with a non-normal balance of power. So the father will have more influence over that couple than they would in a non-inherited wealth situation. These all challenge a male’s masculinity and makes them feel like eunuchs. Even if they have an impressive career, it is not as impressive as her father's. Even if I earn well, I don’t make more than she gets.  

It is like the son of the powerful father problem.  
Keffeler: Yes, but squared. It is harder because you are an outsider. You weren’t raised in the family culture.

Are these relationships fundamentally unstable?
Kristin Keffeler: It takes an incredible level of conscious awareness as well as communication skills joined with confidence and self-efficacy to navigate that, and how many couples really have that?  

Typically we are not trained to be really good communicators, certainly not in any formal way like in school. Those skills get learned in life and take such an incredible level of conscious awareness and the ability to communicate and discuss feelings and emotional intelligence that couples so often aren’t equipped for.  

Couples in general aren’t equipped for it, and then you put them in a 'fiscal unequal' position and it is like a tinder box. So one of the things I would hope would be an outcome, through the research, where we could create more of a roadmap to support these couples. So when they are dating or when they are newly married, I would hope that we could zoom back even further and really prepare families to create more awareness around this as a dynamic. So that even in the onboarding process of the daughters’ partner there could be some intentional laying of the groundwork for them to be set up for success.

You want to be able to offer up ideas for ongoing support like what skills do they need; what would be the kind of conversations they should be having; where are the potential pitfalls and how can they be consciously aware of trying to sidestep some of those pitfalls. So that would be my hope, that ultimately we could apply this and alleviate some suffering and increase the likelihood of more enjoyable, successful partnerships.  

What advice would you give to parents in that situation who have daughters?
Keffeler: Great question. The advice that I do give to parents in that situation is first of all the awareness that this is a real thing and is really important. Just knowing that this is indeed a challenge beyond just who your daughter picks. It is a challenge that has cultural and social roots that the couple will be navigating and it is going to be sticky territory. Next would be recognizing that in the stereotypical dynamic where the dad is the wealth creator , they loom large in the relationship of the daughter.

With dads, they need to recognize how they were first partnering with their wives. You ask them to reflect back on when they had opportunities to learn. When did they mess up? Where did they make mistakes? Those are the things that the parents can be aware of so that they can hopefully give space to that couple to make their own mistakes. And give them some room to navigate their own way. The more autonomy you can give your kids and that couple to make decisions, especially financial decisions, will help that couple learn from and come together.  

So it is really important to be aware that a big wealth creator impacts someone’s confidence. When you are the guy coming in and marrying the daughter whose role model is her father, for better or worse, that dynamic, from a systems perspective, is going to impact him and not everybody has the skills to just name it. But if a family is able to name it, if they recognize how crazy it might be for that person coming into the family and dealing with the norms they have in place, and noting how that might be intimidating to the new person, they can say “we love you and want you here, and you have gifts and talents to bring forward and we would love to see them and support them.” The ability to acknowledge the humanness of it and connect outside of wealth and power, and that is the level of supporting the person that you are onboarding is a huge difference maker.

The top three things I came up with are: awareness, autonomy and acknowledgment. To the extent that people are able to acknowledge in the space of the family system that this is a thing, and it is hard, but “we see you for the individual you are, and she picked you, which makes us excited to get to know all the talent that you have.”

What about the perennial concern with the fortune hunter?
Keffeler: I did some exemplar research at Penn studying next generation family members who had created lives of autonomy and satisfaction and were thriving. I was interested in the core traits and skills that they had built that they felt had contributed to their ability to thrive in the presence of family wealth, where a lot of people don’t. Many don’t self-actualize, they feel that they don’t have autonomy, and agency. One of the character traits and skills that came out of that was unconditional positive relationships, particularly outside of families.  

Some people named a romantic partner, some people named friends, but most people said it was finally recognizing and really being able to identify that somebody who I was in a relationship with truly loved me for who I was, and not for what I had. So avoiding the gold digging component - the person who is going to seek what you have for their own gain - the advice that I give my female clients is that you have to build the skill and the ability to talk about money with your partner and to have heartfelt conversations. It is not only about money as a thing; how will you deal with it; will you have a joint account; will you have separate accounts; but the emotional landscape of money, what it is like for you, what it feels like for them.

If you can have those conversations you will be able to understand the heart of the person you are with. If not, then you are likely set up for some troublesome times. Couples who are able to build the skills to have these conversations can overcome these stumbling blocks. They can build a language around the issue and form good habits like what they are spending and how they are spending and using it in alignment with their values, and also talking about what things feel like for them.  

Why is it so hard to transmit wisdom when dealing with wealth?
Keffeler: The literature review I did to support my research at Penn illuminated this well. We don’t have a good track record of having a language and the skills and ability to talk about the psychology of wealth. There is a real dirth of research in that space and there is not that much research about wealth psychology, and I don’t think we have a language in North America, or globally for talking about wealth, we have a lot more comfort talking about taxes and planning and preservation - because that is all outside our heart.

But when we actually talk about what impact we want our wealth to have, and even be able to define a philosophy of wealth, which is a lot of the work I do with parents, it is hard to get there because we don’t have the language or framework. It feels terribly uncomfortable and frankly people are more willing to talk with me about so many other topics like politics or religion or sex than they are willing to talk about the heart and money.

I hope that I can make a little ripple in contributing to a language and a landscape to enable conversations and recognize wealth and money as a doorway through which we can deepen relationships and deepen our understanding of ourselves. Because money is just a thing, but it is a thing that plays really big in most peoples lives, whether they have it or don’t have it, want it, hate it, or feel controlled by it. Everybody has got a relationship with it. It would be great to use it as a tool for growth and exploration and expression, then the more powerful we can be. So it is hard to transmit wisdom around wealth because we can’t transmit what we don’t have the language to capture.