In the eighth episode of the 3 Pillars Podcast, Peter Harper and Andrew Doust discuss wealth education and how establishing personal, family, and business goals can help build a long-lasting family office.

To listen to the full episode, click the link below or just press play:

https://asenaadvisors.podbean.com/e/wealth-education-philanthropy-or-legacy-how-to-build-purpose-in-the-next-gen/?token=80b0e43b98204d61a5a6d1cadaa4dbed

TL;DR

Peter Harper: Andrew, it’s awesome to have you with me today for the Three Pillars podcast. It’s probably been about 18 months since we last caught up and today, I wanted to touch on with you the topic of prepping next gen for material inheritances and how you think about philanthropy versus legacy. One of the things I love about our discussions is just as we were prepping for this, I started putting things out to you and saw it in my memory of things that we’ve discussed in the past and try to why you’re picking me up and saying “No Peter. This is not allnecessarily about philanthropy, it’s the overarching theme of this is purpose. Can you just give the listener listeners, a bit of an overview of your yourself, your background and what it is that makes you tick?

 

Andrew Doust: Yeah, sure, thanks, Peter. It’s great to catch up with you again. Yeah, I’ve been working with families of oil for 20 years or more, and so I’ve got to see firsthand the challenges they face as they navigate the complexities of wealth. So I work with families to help them navigate that complexity and to flourish as a family, because if they flourish as a family and the relationships are strong, the chances are they’ll be able to manage their resources as well. Conversely, if they don’t get along well, they really can’t make good decisions. Often the relationships break down and eventually the wealth dissipates. So to me, working with families on being healthy relationally is the key to actually ensuring their success and longevity as a family and as a legacy. And so I’m interested in that idea of, well, how do you help families do that? But also how do you help prepare young people in the context of that? Because they grow into these families not knowing what they should do and how they should be. And so the second part of what I do is, is work with a program called KoreVenture and KoreVenture is all about preparing young people from families of wealth to flourish at every stage of their life as they sort of navigate these challenges that we’ll talk about.

 

Peter Harper: Yeah, and just prior we were touching on this point about this idea that our particular focus in this series is preparing first-gen patriarchs or matriarchs for life post liquidity event, things you have to do to get ready to set up a family office or a multifamily office and how important it is to integrate the rest of the family into that decision making process.

 

Peter Harper: And you touched on a point that I think was supercritical that related to what folks think a serious liquidity event will be will mean for their other family members, would you mind just touching on that point?

 

Andrew Doust: Yeah, I mean, again, families I’ve worked with and who I know through the programs who run the liquidity event, you know, will materially change the families, how they live your life. You know, obviously they were already wealthy. But this unlocking of significant wealth creates a whole bunch of questions for the family. What do we do that wealth? What does it mean for our kids? Do we significantly change our lifestyle when it comes to the kids? How much of this do leave them and eventually? What’s healthy to leave them? What do we want to change about our life now because of the wealth that’s being unlocked? The reality for many is that the wealth it created, which was often a byproduct of something they love to do, building a business, usually wealth isn’t the goal. It’s a byproduct of something else. But when it is unlocked and it often is wealth for the benefit of the family. But historically and for many families, it’s not for the benefit of family. It actually destroys a family because it actually unloads a ton of things onto the family for which they are unprepared and for young people in particular, you see you see the impact in very, very damaging ways. Often kids who end up lost in life that fail to launch and they even have substance abuse challenges. So the thing you’ve created, which might seem like a good thing for the family and it could be might actually destroy the family. And so my message to families is, if you’ve created significant wealth and that’s going to be in your family beyond your lifetime or even in your lifetime, make sure you invest in preparing your family for a job they perhaps didn’t want or didn’t choose, but now they’re faced with taking on, which has being responsible for the family’s wealth.

 

Peter Harper: It’s a really, really great point. I mean, I think anyone, anyone who knows a strong willed entrepreneur whose likely to type A personality because in order to be successful and be driven, they’ve got to have a strong pathway ahead of them, I imagine a lot of those folks initially will have a view or would say things like “Oh I didn’t have to. I had to go through and do all these things. This person has effectively got a silver spoon. My kids don’t have the same challenges that I did” They’re always taking it back to their own experiences. Everyone experiences their own experiences. If a child hasn’t had those challenges but is experiencing a whole bunch of new challenges associated with growing up in significant wealth, which, by the way, the patriarch or the matriarch may not be able to prepare them for because they did not have the same experiences as a child. I mean, I think would it be helpful to understand is what do you do within a family unit? To kind of: one – break down these issues for you first gen family that, when it comes matriarch or patriarch, you have to get them to understand the crux of this issue and then maybe hearing a bit of the processes of how you bring the child or the children into this would be would be helpful also.

 

Andrew Doust: Yeah, there’s a couple of things that I can unpack there, one of is maybe the work I do with families to help them kind of navigate this challenge. I’m working right now with a family in London and actually the process is actually fairly simple, but it involves a huge amount of the emotional energy. And it starts to understand the individuals in the family because we had this collective future because of the wealth that’s been created. But actually the collective future is only possible if we have strong individuals who are confident themselves and where they’re going and can work with others in the family to then manage collectively the wealth has been created. So we start and said, well, what’s the mystery? Who am I? What’s my identity? What’s my purpose? What are my strengths and gifts and also weaknesses that I want to work on? What are those things? So we go from the me, people understanding themselves, seeing themselves in a new way to the we. Who are we together? I bring them to the we of the family really matters. So how do we strengthen the we. How do we make this this family, which is a functional decision-making body in some form, effective and functional? Keeping in mind that the we is often undermined by the success of the family. You know, we have a great deal of separation now because we’re wealthy, we can do things on our own and we often do.

 

Andrew Doust: So the we – the tight family unit that you need – is often challenged by the wealth that’s created. So we go from me to we and then we can think about once we’ve got a healthy vehicle, a healthy family, then we can think about where. Where do we want to go together? What do we want to list before? What impact do we want to have in the world? How do we want to use what we have not just for ourselves and our family’s benefit, but for the future? And then finally, we look at how. Well, how do we look at all that? And that’s why obviously governance and and planning and other things is so important. So we got a me, we, where, how journey. It seems weird, but actually the more we spend working on the me and helping every individual in the family understand themselves and see themselves through the eyes of others and growing the emotional intelligence, the better they’ll come together as a family unit, the better they can function as a family unit. The more trust there is, the more effective they’ll be thinking about where they go together and then the more effective they’ll be at designing the how the structures that get them there.

 

Peter Harper: So when you say to me you’re doing that for each individual family member?

 

Andrew Doust:  Each individual family member. So it takes a ton of time, one on one with every single family member and then doing that and then having collective times for the whole family. But, you know, there’s no shortcut to that because these individual family members often haven’t been asked the hard questions, often haven’t done the self reflection that’s necessary. And when it comes to the matriarch and patriarch of the family I’m working with, the patriarch is quite unaware of his impact on his adult kids, quite unaware that he’s quite a stifling influence on them. And they’re an age now with their own dreams and visions. And so the work is helping open his eyes to his impact on their lives and helping to build bridge between the two so that that strengthens the we so that they can have a conversation about the where.

 

 

 

Peter Harper: Was that a challenging process to go through with with him? Was he I mean, was he the person that had started this journey or was it some other member of the family that suggested that you come in.

 

Andrew Doust: Yeah. And, you know, the journey can start in any in a number of places. In this case, it started with his children, his three adult children saying, look, we’re getting really tight as a sibling group and but we don’t think we can engage our father. What do we do? And I knew that getting the father involved too early wouldn’t work. And so with his blessing, they embark on a journey with me to kind of strengthen the me and the we. And in sharing what they were learning the father got interested. He could see the change in them personally and the relationship. And he said, oh, I want some of what you’re doing, tell me what’s going on. And so he’s now joined the journey with a great deal of desire to learn. If he hadn’t joined it that way, he probably would have come with a desire to show that he knew all that they needed to know. And that’s not the case now – he’s coming with a different posture.

 

Andrew Doust: And so, yeah, I mean, you just have to work with the different founders, different patriarchs, different matriarchs in whatever way brings them in with a posture of learning and not feeling like they have to know all the answers, because, of course, they don’t. And they’re moving into new territory. You know, they’re moving into a territory. They knew how to create wealth and build a business, but actually, the next chapter of life requires very different skills.

 

Peter Harper:

 

Peter Harper: I think for a lot of a lot of successful entrepreneurs. They have the ability to learn and change because they wouldn’t have been so successful, right? I mean, if you’re completely not open to it, then you won’t grow and you and that can stifle success. So watching the kids adapt and engage in your process and then take that back to to the entrepreneur, I mean, I think that sounds like it was a great outcome.

 

 

 

Andrew Doust: My first point to parents would be, if you’ve created great wealth and you intend to pass some or much of that onto your kids, as many do, keep in mind that if you pass on wealth without the wisdom and without the values and character necessary to steward, or look after wealth, the chance is you’re handing the kids, poison and it’ll damage them. And the evidence is clear on that. And you don’t have to look far for families with kids that have kind of imploded under the weight of wealth. So invest heavily in their education and their wisdom.

 

Andrew Doust: And also keep in mind that the things that made you successful are the things you’ve probably lost in your family. And I mean, what I mean by that is you learn the value of struggle. You had to do things tough. You learn how to be resourceful, how to be industrious. You learn to get up when you’re knocked down. These are all skills you had to learn, perhaps when you didn’t have much as you starting out as you’ve had a lot of abundance in your family, your kids probably haven’t learned that They’re used to flying, in a plane on their own or, you know, at the front of the plane and not actually knowing how to navigate the the the jungle of chicken, for example. It’s a common problem – you’d be surprised. Your kids may have had the best given to them because you could afford it. But your job is not to give them this. It’s actually to bring out their best and bringing out the best in them, it’s an internal activation that requires a different approach. And too much of the sort of blessings of wealth can kill the very thing, the very character you wanted to create in the kids to be really intentional about. There’s a whole bunch of stuff we do around that. I just wanna leave that idea in your mind andin the mind of your listeners.

 

Peter Harper: That’s a great point. I mean, I think the overarching theme in all of this is education. Right? If any anyone is an avid reader and wants to dig into this area, I mean, there’s there’s a lot of data points that talk about the core component of what you need to do to get families engaged and buy-in and build longevity around family wealth fundamentally is driven in many ways by education. As you said, building purpose and legacy around values, right Kids need to understand why the family is doing what they’re doing and believe it and buy into it. And I think a very good point that you were flagging before if they don’t value or appreciate the wealth, because it’s just always been there, or they’re turned off by it for whatever reason. What I see regularly with a lot of particularly first gen is there might be this obsession with money, right. Whether it’s the entrepreneur or some other part of the family, because they might have come from humble beginnings, that for the next generation can be somewhat of a turnoff. I mean, because there’s this sense that it may be the money or the business or the focus was more important than the family.

 

Peter Harper: And in often the case, it’s the case that I think that entrepreneurs that are particularly first gen, as they’re creating wealth don’t see that. Right, they’re like, “OK, well, this is so much better. I’ve come from this place where there is abject misery when it comes to being in a position where you’ve got nothing right or you or your poor. And I’ve created something that is truly impressive and has taken the family, elevated the family in all these different ways.” But still, there’s such a major disconnect between the second generation and the wealth creators. Is there a situation where if that’s been left unchecked for such a long period of time, you think it’s hopeless? As a family, how do we bring this purpose back together? Or do you think that those type of issues, all of that stuff can be resolved in time provided everyone’s open to it?

 

Andrew Doust: I think if we take our first goal to be having strong and flourishing individuals and strong families, if we take that as the overarching purpose, then everything else is up for discussion. And so most of the families I work with, the founder will have loved the business and wealth have created. But if you ask them what’s more important, this is sustaining the family, sustaining the wealth they will generate, say, will actually family matters more. Obviously you want both, but actually that’s preeminent. And so what I would say is that if you are a founder and created a significant wealth, maybe you’ve still got your operating business somewhere there and you’re pretty attached to it. Keep in mind your purpose. You had freedom to pursue what you wanted to do, what you are passionate about doing, what you feel compelled to do, what you really want it to do. You feel free to do that. And you were free. And look what you created. What you’ve now done, if you want your kids to follow in your footsteps, is actually deny them that choice. Because if you say, hey, here’s your purpose, it’s to follow me. And so it’s funny because you enjoy choice and we all do. But if that’s imposed on the next gen, of course, we’re going to kick back and say, well, hang on, what about me? And so what you want to do is create an environment where it’s possible for young adults – and we do this for the KoreVenture program – to think about: well, what am I here to contribute in the world? What’s my purpose? What’s what’s my reason for being? What footprint am I going to leave on this world? Because I want to I want to matter. I want to do something that’s substantial. And I don’t want to be a footnote on my father and mother’s, you know, achievements.

 

Andrew Doust: Give them freedom to explore that, but also freedom to opt in to taking on the family’s responsibilities if they so wish. From a young adult perspective, we say, listen, there is something has been created that is going to outlive your parents. It’s assets of certain forms that might be, you know, still an operating business, perhaps, and other forms of assets. There is a responsibility you have to honor your parents and to help them think about how that would manage now, but also beyond their lifetime. So don’t turn your back on the family and the needs of you. Lean into it and say, well, how can I still pursue what I think I want to do and want to be? Maybe I need to be an artist or a surgeon or whatever it is you think you can do. It should be or maybe build your own business. Do that, but also recognize and work on how you can play a part in managing the family’s affairs, and that’s why obviously, you know, a whole bunch of models around that governance models where you can still be actively involved but not have to be a slave So I’d say let there be freedom, but also let that be a responsibility.

 

Peter Harper: I think what you’re saying, if I’m paraphrasing back, is that the collective input of the entire families is important. So even if someone saying this is not my core purpose, I’m going to go off and I’m going to follow my dream, there needs to be a framework with a family supports that. Right. Because as you rightly point out, this is probably the magic or the secret sauce that created the value or the wealth within the family to begin with, because the the patriarch or the matriarch had that, you know, that ability. But strong families still require collective input.

 

Andrew Doust: And they certainly do. And we talked before about the me – the me is what do I want to do and be? And the we is who do we want to be together and how do we work together well, to make good decisions for the future? Dennis Jaffe, who wrote the book, Borrow from Your Grandchildren. And it’s the culmination, I may have mentioned this before, of a study of businesses around the world of enterprises, families that have lasted more than 100 years. And I said, what are the ingredients that helped them last a 100 years? How is that possible? Because most don’t make it. But one of the things they picked up on is this idea of being the families that make it being generative families. And what I mean by generative is that instead of the first generation sort of creating the wealth and the second sort of building and the third squandering it, because I don’t feel like they have any attachment to what was created, what you want is every generation to see themselves as the first generation, every generation to say, okay, well, this is now ours. How do we build what’s next? Rather than just follow the plans of the, you know, generation one, what do they want? Are we honoring what they wanted? Now, every generation has to work out for themselves together, if they are together, what their contribution is going to be. They need to be industrious and be entrepreneurial. They need to be creative and productive with whatever they have. So that’s what I’d encourage families to do. Make sure you cultivate that dynamic in your family, where you have this creativity that continues to push on beyond whatever you could create.

 

Peter Harper: Yeah. Now, it’s really, really important advice. I mean, when we we were starting this discussion, you were talking about the me and the we. I don’t think I truly understood the way in which your framework worked together, the way in which you just break it down just now, right? I could see how that could be really powerful. Everyone’s looking at themselves individually. What’s my own purpose? How do I go out and get that? But there still needs to be this understanding – this collective we. Yes. You’re free to pursue whatever you want, but collectively, we need your intellect, we need your input, if the family is going to obviously stay together and grow together. That’s a great insight. And I like the way you framed it. And Andrew, the education piece, again, we’ve talked about this many times is how critical that is

 

Peter Harper: Before we step off, I did want to jump a little bit into KoreVenture because through my own dealings with individual clients, I could see how having programs such as this could have material impact.

 

Peter Harper:  I think regardless of what people’s personal view is of this topic, anyone who’s coming at this and experiencing this would agree that education of next gen so that you can get them into a position that they feel they have a purpose and buy into whatever the we is of the family has to be, I think it’s the single most important thing, right? Because if you don’t have kids that are educated, they have the IQ or the emotional intelligence to actually take on the challenges that they’re going to have as they grow into a role within a material family, then you’re almost better off giving up on things before you even get started. Can you talk a little bit about KoreVenture, how it came about and what you’re saying within the program?

 

Andrew Doust: Sure. Thanks for the question about KoreVenture. KoreVenture kind of grew out of this observation that many families were failing to prepare the young people for a future of wealth failure to thrive. Young people from wealthy go all of the benefits you could ever want, but actually not launching. In some cases I mentioned earlier, actually suffering through substance abuse and those sorts of things. And digging into it I looked in to see, well, what do people do to prepare young people for wealth? And the answer was, well, you know, the banks put on some programs, made lawyers do, and they learn a bit about money and estates and, you know, succession and maybe philanthropy as well. All good stuff and all necessary. But it failed to do with the deep issues that the next-gen I knew were dealing with. And those issues were things like, you know, I feel really isolated. I don’t have any friends I can trust because I can’t really talk about my world with them. And when I do, it just makes me feel very different. And wealth has actually made me feel very different growing up. And I didn’t want to be different growing up. I wanted to be like everybody else. Or, you know, I don’t know if I could ever achieve anything next to my parents. Their achievements are so great. How I could I ever add up and be anything much in this world? And so I feel like I’m starting as a defeated already. Or maybe I got so many options. I could be anything or it could be nothing. And in some ways it doesn’t matter because I’ll still get a roof over my head and probably an income.

 

Andrew Doust: So all of these questions running around in people’s minds that weren’t being addressed. And I thought what’s happening here is that people, because of the wealth they’re living in, I’ve been confronted with a whole bunch of things that they can’t talk about with others because it’s not the normal experience of most. And parents perhaps don’t see this or don’t recognize because they haven’t lived it. These things are going on, these questions being asked. And so the assumption is if we do send our kids to the best college, give them the best education we can, that’s our job done. But the reality is the job they’re actually already doing, which is living with wealth, they’ve not been prepared for.

 

Andrew Doust: And so what we want it to do is create something that was beyond the NBA, something that does what no NBA actually really does well. And that is to put people in a peer community of people like them who are wrestling with those sort of questions and helps them process and the complexities of what it means to live with wealth. And actually work it through and find a path through so that they can live a life of great purpose, great meaning, great joy. And actually do that with a focus much more on character and say, look, success isn’t about taking the family’s wealth and multiplying it x fold. Success is much more around who you become. The thing you’ll be celebrated for the end of your life isn’t isn’t your net worth. It’s going to be the impact you had on others. And let’s help you be a person who has a great impact on others and makes a contribution and, you know, based on whatever your gifts.

 

Andrew Doust: And guess what? If we do that, the chances are when it comes to thinking about wealth, you won’t be one who thinks like I’m just going to squander this wealth or I’m going to consume it or I’m going to pocket and do nothing with it. You’ll be a person who thinks, great, look at this wealth, how can we be impactful with it? How can we building a business? How can we grow the business we’ve got? How can we do good things in a world with all of what we have as well? So this focus on character is really what the program is all about. And so we kind of launched this very intense four month journey over three countries with input from Stanford University, Oxford University, families of wealth, experts in their field, intense coaching. But it’s created an extraordinary impact in the lives of those who have gone through it. And they even a year on, we’re just doing our last batch. We’re doing our follow up phone calls to see how it’s going. They said, look, this has transformed our lives and we are a different person because of what we experienced. This is what real preparation looks like. So, I mean, you know, people can look up the details on KoreVenture.org, but it’s it’s a very intense and highly relational approach to preparing for a future.

 

Peter Harper: Yeah. I couldn’t recommend it more highly. I mean, when you first mentioned to me, there’s a lot of amazing things you just sort of touched on. But, I shared my own experience with a client , we were talking about purpose and you were going through all the different things that they could do and the response to each of the different items was what I could do that or I could just buy it. The challenge is when you have enough money to buy anything in the world, building purpose can’t be around around money. It needs to be around something else.

 

Peter Harper: And I think the other thing that some people might find challenging or strange if they’re not necessarily in this world or they’re new to the world is that every single human wants to be better than their parents. It is human nature, Freud write extensively about it. So as a result of that, if the sole way of judging success or whether someone can be more successful than a parent is to make more money, then as you said, the probability of that happening is low and they’re doomed to have challenges from the start.

 

Peter Harper: So I think this whole notion of building purpose through these other other means – provided it it’s got the buy-in and support of the rest of the family – is such a major thing, and I can see how it would have had a huge impact if you’re getting kids to think like this at the right age in the foundational years

 

Peter Harper: For anyone that’s listening, I’d recommend you go to the website, check it out. If you’ve got any questions reach out to Andrew or reach out to me, I’ll make sure you get through to the right people, because I think  it is a really, really, really awesome thing that you’re doing.

 

Peter Harper: Andrew, I just want to thank you very, very much for coming along and being here today. It’s been it’s been a great session. So thanks for joining us,

 

Andrew Doust: Peter thanks very much. And look forward to catching up again soon.