Navigating family dynamics: Multigenerational wealth

Episode 109: Courtney Pullen joins the podcast to provide actionable advice to help you navigate the challenges of multigenerational wealth.
September 2020

Courtney Pullen, M.A.

President, The Pullen Consulting Group


Navigating family dynamics: Multigenerational wealth

Helping a family manage and maintain their wealth over multiple generations can be a complicated and potentially unhappy affair.

Courtney Pullen joins the podcast to provide actionable advice to help you navigate the challenges of multigenerational wealth, including why his background in psychology has helped him find success in this area of wealth management.

In this episode:

  • What is the family systems theory, and how can it be applied to wealth management?
  • Common issues that surround discussing wealth with the next generation
  • Key strategies to help families maintain their wealth
  • Navigating broken trust within families
  • The 10 habits of a healthy family culture
Audiogram - BCBO ep. 109 - Navigating family dynamics: Multigenerational wealth


Courtney Pullen – Families like this fail 90% of the time in the third generation. The proverb of the shirt sleeves to shirt sleeves in three generations, which is a worldwide phenomenon, by the way, comes from that alarmingly shocking statistic. When I was doing the research in preparing for how to work with this family, that was a turning point for me and my career.   

Ben Jones – Welcome to Better Conversations. Better Outcomespresented by BMO Global Asset Management. I’m Ben Jones.  
Emily Larsen – And I’m Emily Larsen.  On this show we explore the world of wealth advising from every angle, providing actionable ideas designed to improve outcomes for advisors and their clients.  

Disclosure – The views expressed here are those of the participants and not those of BMO Global Asset Management, its affiliates, or subsidiaries.   
Emily Larsen – Tolstoy said that all happy families are alike, but each unhappy family is unhappy in its own way. If you’re trying to help a family manage their wealth over multiple generations, you may find it can be a complicated and potentially unhappy affair. Luckily, today’s show contains a load of actionable advice for advising families.   

Ben Jones – Courtney Pullen is the president and founder of the Pullen Consulting Group. Courtney works with affluent families and their advisors to navigate the challenges of multi-generational wealth. Courtney has a graduate degree in psychology from the University of Northern Colorado, and that academic background is instrumental to his work today. 

Courtney Pullen – I was originally trained as a therapist. I have a background in psychology and a minor in business. So I started out in a counseling practice and really wanted to make a larger impact on the world, so I transitioned into working with family businesses and did a stint as a corporate consultant. I was doing those two things. And then I had a large bank in Denver say hey, I know you work just with family businesses, but we have a family — it’s our largest client — and they are about to implode and we want to know if you think you could help them. I’m like well, tell me more about this situation. It was what’s called a family enterprise. It was a multi-generational family that’s in the midst of trying to share estate, real estate, trusts, and all that stuff. They were on the verge of completely imploding. I did some research into the field. At that time hardly anything was written about the non-family business. But I found that families like this fail 90% of the time in the third generation, the proverb of shirt sleeves to shirt sleeves in three generations, which is a worldwide phenomenon, by the way, comes from that alarmingly shocking statistic. When I was doing the research in preparing for how to work with this family, that was a turning point for me and my career. I have been really committed to working with families like that ever since. That was over 20 years ago now. 

Ben Jones – That first client that engaged you from the bank – did you successfully keep them from exploding?

Courtney Pullen – Yes, I think I did. 

Ben Jones – Alright, that’s fantastic.  Before we dive into specifics, why do you think advisors need to understand and care about this topic?

Courtney Pullen – That’s a great question. There are a couple reasons. The really practical reason, so forget about feelings for a minute, is that in the financial advisory space the research is pretty compelling that most families when the patriarch of the family has died, the remaining family members move the assets away from dad or mom’s trusted advisor. It happens the majority of the time. Just from a good business perspective, it takes so much time and effort to get a client on board; you don’t want to lose them. One way to really connect with them is by connecting with their family. The families start really seeing the financial advisor as a trusted resource for the entire family. When that happens, they’ll keep their money, quite frankly, with that trusted advisor. The other reason is an emotional reason, which is maybe financial advisors see the tragedy that happens with these families and wants to be able to do something about it. Part of my work is also in training with financial advisors and what from their skill set can they do to support these families. 

Emily Larsen – Making yourself a trusted advisor to your clients’ entire family, even the younger generations, is an important part of staying tuned into their needs. When you have a family that needs your assistance, where should you start? For reference, Courtney’s ideas about family dynamics come from a psychological model called family systems theory which outlines how we can understand individuals as part of a family system. If you’re interested in learning more, we’ll attach further resources and research in the show notes. 

Courtney Pullen – All families have what’s generically referred to as family dynamics, meaning — think about it in your own life. You’re this autonomous, successful, fully individuated human being and you’ve got your own life. And then you go back home for Thanksgiving or Christmas or the holidays or whatever, and there is a regressive pull that you experience. You become that oldest child or youngest child or wherever you are in the birth order. All families have stress and tension. Each family has its own unique thumbprint, so to speak, of how they navigate those particular waters when they are, like now, the stress of COVID. All families are being impacted by that and behave differently and they have their own unique challenges. That’s family dynamics. 

Ben Jones – You’ve been doing this work for a long time and you’re quite successful at it. What’s the most important thing that you’ve learned about family dynamics?

Courtney Pullen – This is going to get just a tad bit theoretical for a moment, but who I am being as an advisor makes a significant difference. What I’ve noticed is something I’ve learned from family systems theory, is that there’s several fundamental adaptations that kids have growing up in a family. One is to be over responsible. The other is to be under responsible. A third is to engage in conflict head on. What I noticed in my engagements is that when I’m concerned about what’s going on in a family and it looks like they’re heading towards a cliff, I can have a pattern of over responsibility. So what happens if I’m working with you or working with a family and I’m being over responsible — this is a loaded question coming your way, so be ready — what is your tendency to do?

Ben Jones – You know, I would say that I have a tendency to be maybe a mix of over responsible and address things head on. So, address the conflict. 

Courtney Pullen – There you go. So that particular combination is going to have an effect on the family that you’re working with. The first thing for us to be aware of as advisors is what’s called advisor neutrality. It’s really important to hold on to our neutrality, our objectivity, and really be in the place of an observer who’s watching, noticing, seeing what’s going on, but don’t get caught up in the system so that you’re either over or under responsible, or take issues on head on. If we do any of those three things, the family will just spin into their patterns. 

Ben Jones – That’s a pretty profound insight, and it’s really great advice for advisors listening about being that passive observer and advisor rather than somebody who’s making the decisions or getting involved into the system themselves. 

Courtney Pullen – It’s really important for them to stay outside of that system. 

Ben Jones – I am curious, when it’s comes to wealth, my observation has been that people tend to take the ostrich approach where they just stick their head in a hole and try not to let their kids know that they have any money or wealth. Or they end up in this kind of entitled situation where they’re giving their kids everything to win their affection or for other reasons that they are unaware of. What are the most common issues you see when it comes to discussing wealth with the next generation, and are my observations kind of similar to yours?

Courtney Pullen – They are right on. You didn’t read my book in preparation for this, did you?

Ben Jones – I had it on my list and I didn’t get to it. So I’m being honest. 

Courtney Pullen – I’m just obviously teasing you. About five years ago I wrote a book called Intentional Wealth, How Families Build Legacies of Stewardship and Financial Health. It was based on my experience of me interviewing families that were well into the third generation or fourth, fifth, sixth, seventh generation. These are the 10% that had made it. I just asked them what do you attribute to your success. One of the things I developed from those interviews is what I call a money relationship continuum, in that we all have a relationship with wealth, with money. It tends to be along a continuum of denial to entitlement, which is almost the same language that you used, which is why I was joking with you, Ben. The middle path, so to speak, is to have an empowered relationship with money. It’s so important that family members identify are you on the denial end or the entitled end, or do you have a combination of the two. And what would you really like it to be. What would it look like for you individually and you as a family to be working together to have an empowered relationship with money. 

Ben Jones – I like that term empowered relationship with money. It strikes me that a lot of the spectrum that somebody may currently be on might be different from where they’d like to be. How do you get people to have that kind of self-awareness as to where they are and maybe some of the underlying learned behaviors from their parents, et cetera, that have led them to where they are?

Courtney Pullen – Part of what I’ll do is I will start by normalizing that we all have a money script or money messages that we learn growing up. I’m a preacher’s kid. I heard my dad say in sermons at least a dozen times if not more that a wealthy man’s chances of getting into heaven are the same as a camel getting through the eye of a needle. So when you hear that as a kid, what the heck does that mean? Or messages like what do you think I am, made of money? Or money doesn’t grow on trees? What happens is those money messages that we all get growing up contain a partial truth to them. And they have such an ability to get in the way of our lives in general terms. I know in my own life I ran into this when I was transitioning from being a therapist to being a consultant; there was a money amount that I could not get past. What I realized is oh, when I make more than that amount that means I might be wealthy. And I can’t be one of those people. Again, it’s unconscious. So what I help families do is, I’ll lay out stories like that, Ben, like you’re describing, and say what are the money messages that you all have grown up with. They take right to it and all of sudden the light bulbs start going off about wow; this is the impact of those messages. And then the next big question for the parents is what have you intended to give to your kids? And then I ask the kids who are in the room, what did you hear? Because often it’s not what the parents were hoping they’d hear. Now we have a rich landscape to unpack together as a family. Oh, okay, now that you’re first conscious and aware of it, it has created a habitual pattern, what would it look like for you to break the pattern, and how can you, again, be heading towards that journey of more of an empowered relationship with wealth? What would that look like?

Ben Jones – Courtney stresses the importance of opening discussing and deconstructing family dynamics. I really like the way he approaches it with the entire family, not each person individually. This can lead to richer dialogue and better understanding for everyone. However, there are times when internal conflict does come up, and there are clear strategies for helping families work them out. Which made me wonder, why do families have trouble managing multi-generational wealth in particular? I am curious, Courtney, you alluded to this earlier, but the third generation issue, maybe just at a high level you can describe — what that is and then why that occurs. You talked about in the 10% of families that you interviewed, some of the reasons that maybe they were successful. But why do 90% of people fail? What are the common issues?

Courtney Pullen – Well what we see commonly is — and I’ll play with some stereotypes here — is the first generation, they’re the wealth creators, of course. So they have this vibrancy about them, a hard work ethic, a roll up your sleeves, can do attitude. Then what they’ll do is unknowingly or maybe even consciously, is they’ll say to themselves I don’t want my kids to have to work as hard as I did. Because they worked 60, 70, 80-hour work weeks. I remember one family talking about we literally lived on the manufacturing floor. We changed our babies’ diapers on that floor. Now they’re worth a lot of money, they say the last thing I want to do is make my kids do that, so they protect them. So the second generation grows up seeing how hard mom and dad work, but being protected and insulated, so they have a tendency to maintain the wealth at some level. But they’re starting to get a little disconnected from the work ethic values. And then the third generation comes on board, they don’t see any of it. All they see you just show up in life and you have a lot of money. They stereotypically tend to be disconnected from the core values of the first generation. The first generation creates, the second maintains, and the third squanders. Again, towards almost 90% of the time. 

Ben Jones – Wow. I love the way you explained it. Very simple to understand. Are there one or two kind of keystone strategies that you’ve learned about that can keep things from going down this path?

Courtney Pullen – When I mentioned the book Intentional Wealth, my interviewees gave me that title, so to speak. The working title when I started the interviews was Best Practices of Legacy Families. I heard the families I interviewed use the word I figured out that I needed to be as intentional about growing my family as I was about growing my business. And I brought that same degree of focus and intentionality to making us be successful as a family. That is the first best practice, is be intentional about how do you want to be growing your family so it’s a healthy, high performing, so to speak, family unit. 

Ben Jones – Kids don’t come with a handbook. I can already say that I can relate to this idea of thinking a little bit more intentionally and being better about it myself, even, and I don’t have multi-generational wealth. But it’s a great topic for anyone. 

Courtney Pullen – The reason why I wanted to work with advisors like your audience is that most of the families that I work with have anywhere from $20M to $1B. So these are ultra affluent families. But everything I’m talking about applies to all families. So the financial advisor who has a couple that they’re working with that’s worth $3M, $4M, $5M, like the millionaire next door type of people, they, too, can benefit from these same principles. 

Emily Larsen – Speaking of intentionality, the ability to communicate with intention is fundamental to a healthy business and family alike. Some of Courtney’s actionable advice can be applied to businesses just as well as to families, with varying levels wealth. What does good family communication look like? Does it differ for multi-generational families?

Courtney Pullen – When you look at the best practices from the research and in my findings, you find that the number one cause for failure is a breakdown in the communication in the family. If that’s the number one reason for failure, a lot of my work is teaching families communication tools. Again, it’s back to what you were talking about as a parent, is that we don’t get a manual of how to raise kids. We don’t get a manual for how to communicate with our wife or our kids. So I teach them healthy, authentic communication skills. And then have them practice it on the challenging conversations that they are facing about the trust or the real estate or issues of fairness or equality or whatever. Healthy communication, intentional communication is a big focus in my work. 

Ben Jones – I’m sure that deals with interpersonal. One of the things I picked up off of some of the work that you had out on your blog was around this concept of family meetings. What does a good family meeting look like? How often should you have them and what should it feel like when everybody departs? 

Courtney Pullen – As I’m talking to a family about starting the family meeting process — and I’ll talk about what happens in those in a moment — we first need to focus on the foundation of the family. What are the core values of the family? What’s the mission, the vision of the family? What’s the purpose of the wealth? Now, as you’re hearing me talk about that, Ben, it kind of sounds like a business, right, mission vision, right. Well, in a similar way, we need to be doing the same things with our families because we as couples are so busy just running our lives, being parents, running our business and so forth, we don’t take the time to intentionally sit down with our kids and say, let’s talk about our values. Parents are showing, displaying conveying values, but they don’t make them overt. So when I first start working with the family ideally, it depends on what’s going on in the family system, but I’ll have them anchored in let’s really define and operationalize the values, mission, vision, and wealth purpose. The fundamental WHY of the family. Then when I mention communication is that in family meetings, once that gets established, then we start building in the best practices of healthy communication, clear governance for decision making. How do we prepare the next generation emotionally and financially and technically for receiving this money or receiving the inheritance? So those are just a few examples of topics for family meetings, and then your other question, Ben, was that most families commit to doing a family meeting once a year, sometimes twice a year. One of the things that I always am an advocate for are two seemingly opposed things. We need to organize to run the family meeting in a way that occurs to everyone as extremely valuable and have good use over time, number one. Number two, you need to have fun. You don’t want it to be a boring business meeting, so family meetings should not be in the conference center or in a board room. You want family meetings at maybe the family retreat or second home, or a nice place out in the woods or something, so family can get together and play golf, tennis, white water rafting, whatever they come up with. Those two objectives need to occur at all family meetings, in my opinion.

Ben Jones – I like that, and I really like often in business, you hear about the value of fun. But shared experience is such an important part of trust building.

Courtney Pullen – Absolutely, well said. 

Ben Jones – I am curious, as we’re talking about trust. I’m sure you’ve encountered this with maybe some of the more challenging families that you’ve worked with that are maybe further along the broken trust spectrum, but when trust is broken or maybe didn’t exist, how do you get people back together, or is there a point of no return?

Courtney Pullen – I really hope not, that there’s a point of no return; that it’s very common in families that there’s been some degree of a breakdown in trust. It goes hand in hand with the communication work. What I help a family do is identify what was the cause of that breakdown in trust, and what are the steps that people can take to repair that trust. Part of a subset of that, Ben, is that families have a tendency to create files on each other. I’ll give you an example about that. I’ve heard a version of this countless times in my consulting work, is I’m working with a family business, let’s say, and it really seems like on paper that the daughter is in the best place to take over the family business. She has great experience, she has an MBA, everything is lined up. Then they’ll choose the son, and I’m like, why did you choose the son? Well, because he’s the oldest or because well, Mary was horribly irresponsible as a kid with money. She’s the one that every time they go on a family vacation she would blow through her budget. And I’m like okay, how old was she when she did that? Seven, eight years old? They still have a story about her, a file about Mary. 

Ben Jones – The narrative is strong.

Courtney Pullen – Yes, the narrative is strong. You think about that in your own family and the listeners on this just think about how true that is in all families. So that needs to be consciously unpacked, for families to be able to really understand like oh, that’s part of the breakdown in trust, is we’ve been carrying an old narrative about each other that goes back 20, 30, 40 years.

Ben Jones – That’s helpful. Are there some techniques to kind of refresh that narrative, or rip it up and start over?

Courtney Pullen – Quite literally that’s what I’ll have people do, is like, I’ll encourage them to look at the humor in it. Again, I want to normalize that all families do this. Secondarily, identify what is the narrative that people have about each member of the family? Is it really based in facts, or is it just based on an old story from years and years ago? Then, what would it look like for you all to create a new story, a new narrative about each other that allows each family member to really live into new possibilities in this family.

Ben Jones – We’ve talked about how to free family members from the unfair individual narratives they’ve built over time. But there’s another type of narrative that can cause stress in the family dynamic, and it’s almost the opposite problem. What happens when an individual feels like they are pressured to live up to the expectations being set by their family?  I’ve had some friends that came from multi-generational wealth, and one of the things that I don’t think people realize is that sometimes that can put an incredible weight on an individual family member to conform or kind of follow in their family’s legacy. How do you ensure that individual family members can thrive and get their own kind of fulfilling lives, and still carry on the family legacy without being kind of tethered to some expectations that cause some stress for them?

Courtney Pullen – What I talk about is this developmental triangle, and envision that on one corner of the bottom of the triangle you have connection: that we as human beings thrive being in connection with each other. On the other end of that continuum is what’s called individuation or autonomy. We also have a drive to be a separate, autonomous individual. Then the third one at the top of the triangle is we all have a need for contribution, to have a meaningful, purposeful life. I’ll lay out this triangle and say, this is a hard journey for all human beings, but particularly in a family of wealth, because they are kind of forced together in many ways that are somewhat unnatural. So, it’s a rhetorical question but it’s also a very active question: how are you doing supporting connection, and individuation, and investing in the dreams and ambitions of the family members so they can be contributing members of society, and really make that in a very intentional conversation. 

Ben Jones – I like the language of investing in other family members. I think it helps put the responsibility squarely on the entire family unit rather than any one person’s kind of back or past legacy.

Courtney Pullen – Well said.

Ben Jones – Tell me if there’s an individual family member that isn’t kind of aware of how do you actually find what that meaningful purpose is in life. How do you recommend that families help support individual family members in finding those, because for some people that’s a really big challenge?

Courtney Pullen – On the one hand, it’s as “simple” as — I put quotes around simple — as letting them know, giving them permission that it’s okay to pursue your dreams. I live in Denver, Colorado. I work with a lot of oil and gas families. For them to say, not only do you not have to go into oil and gas business or the family business, but it’s really okay for you to be an environmentalist. You can go to the opposite extreme. If that’s your passion, chase it, go after it. So number one is to really name it. Number two is to give the kids, who may be in their 20s or 30s, permission to pursue their passions. One of the things that we do at Pullen Consulting is that we coach that next generation, and how is it that you could find your own meaningful contribution in life.

Emily Larsen – Thanksgiving dinner can be stressful enough for your clients, even when there’s no money or conflicts on the table. We hope today’s episode has inspired you to think about new ways to help the families you work with managing their family dynamics, communications, and their wealth for many generations into the future. Courtney, thank you for sharing your wisdom around working with families of all kinds. To wrap up, Ben asked Courtney if he had any more best practices to leave us with.

Ben Jones – Now, Courtney, we’ve covered a lot of rich territory here, and I really appreciate you sharing your wisdom and knowledge with us, but I feel like you would know better than I what question I should have asked you that I didn’t. 

Courtney Pullen – You’re a good interviewer, that is a great question. I am looking at the best practices of what are the 10 habits of a healthy family culture, and in our conversation we’ve hit on a number of them. Practice and learn skillful communication, preparing the heirs, supporting individual family members and having a life with purpose. The vision values mission work that we talked about. So that’s all there and it occurred very naturally. There are a couple that haven’t come up yet as far as best practices. One is for the family to see itself as the steward of the wealth, that we are so fortunate and so blessed and have so much gratitude for this. You can hear it in my language, that’s a natural offset to entitlement. Fundamentally, the last one is that the family sees itself as a learning family. We’ve got this long-term view as a family, and we’re all in this together, learning and growing. Not only are the 18 or 25-year-olds out pursuing their passions and their vocations and so forth, but mom and dad are learning and growing too well into their 60s, 70s, and 80s. It’s a learning mind-set is the last best practice I like to mention. 

Ben Jones – Thank you for listening to Better Conversations. Better Outcomes.  This podcast is presented by BMO Global Asset Management.  To access the resources discussed in today’s show, please visit us at www.bmogam.com/betterconversations.   

Emily Larsen – We love feedback and would love to hear what you thought about today’s episode.  You can send an e-mail to [email protected]  

Ben Jones – And we really respond.  

Emily Larsen – We do.  

Ben Jones – If you thought of someone during today’s episode, we would be flattered if you would take a moment and share this podcast with them.  You can listen and subscribe to our show on Apple Podcasts, or whatever your favorite podcast platform is, and of course, we would greatly appreciate it if you would take a moment to review us on that app.  Our podcasts and resources are supported by a very talented team of dedicated professionals at BMO including Pat Bordak, Derek Devereaux.  The show is edited and produced by Jonah Geil-Neufeld and Sam Peers Nitzberg of Puddle Creative.  These are the real people that make the show happen, so thank you, and until next time, I’m Ben Jones.  

Emily Larsen – And I’m Emily Larsen.  From all of us at BMO Global Asset Management, hoping you have a productive and wonderful week.  

Disclosures – The views expressed here are those of the participants and not those of BMO Global Asset Management, its affiliates, or subsidiaries. This is not intended to serve as a complete analysis of every material fact regarding any company, industry, strategy, or security. This presentation may contain forward looking statements. Investors are cautioned not to place undue reliance on such statements as actual results could vary. This presentation is for general information purposes only, and does not constitute investment, legal or tax advice and is not intended as an endorsement of any specific investment product or service. Individual investors are to consult with an investment, legal, and/or tax professional about their personal situation. Past performance is not indicative of future results.  BMO Global Asset Management is the brand name for various affiliated entities of BMO Financial Group that provide investment management, trust, and custody services. BMO Financial Group is a service mark of Bank of Montreal.  Further information can be found at www.bmogam.com.

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