The GRAYMATTER Process

How GRAYMATTER Works with Families

All GRAYMATTER services are based on the definition of family wealth as the human, intellectual, and social capacities of family members with the family’s financial capital positioned as the tool by which these capacities become materialized. GRAYMATTER consultants serve families as ‘personnes de confiance’* (advisors holding the deepest trust) to ensure consistency and cohesion among all family service entities and advisors. The services below are either be provided in their entirety or as the family’s needs warrant.

Step 1: Family needs analysis: The Family Survey
The family survey is conducted through personal interviews as well as a comprehensive questionnaire. GRAYMATTER’S proprietary Diagnostic Questions are designed to discover the family’s needs, goals, and aspirations in an efficient and organized manner. Information gathered includes:

• Personal needs, goals, and aspirations of family members and the family entity*
• Attitudes toward wealth, what wealth means to family members individually and to the family entity as a whole, what it means to be a ‘family’—the purpose of family
• Educational needs (communication skills, life management, new family member, dynamic stakeholder owner,* governance, trustee, beneficiary, financial, business)
• Family governance needs; Issues to be managed
• Life changes to be navigated; Challenges of role evolution
• The effect all of the above are having on all family wealth components

Step 2: Pre-governance Education: What is the Family Story and how do we nurture it?
The resolution of communication and trust issues coupled with education regarding roles and responsibilities are responsible for 85 percent of family success. For a governance system to serve the family well, it must fit the family’s current needs, be adaptable to the family’s future needs, and it must be pragmatic. A well designed governance system doesn’t just happen. It requires the input and voluntary buy-in from well-educated family members. GRAYMATTER facilitates input and buy-in through education and training in the following areas:

• The Communication Platform: getting to the heart of the issues
• A family’s generational maze and how it influences wealth management decisions
• The fluidity of family; how to be good parents; how to be good siblings & good cousins
• Family governance: the real asset protector; what it really means to be a dynamic stakeholder owner*
• New family member education (birth members and in-laws);
• Transitioning to next generation leadership: When to start?
• The proper role and positioning of the family business
• The proper role and positioning of the family office
• How to develop a family constitution that will serve the family for generations to come
• Trustee and beneficiary education: treating trusts as family members*

Step 3: Creating or Reviewing the Family Governance System:
The consultants at GRAYMATTER have found that by viewing governance as having three components, families gain a clearer understanding of both the proper function of governance and the ways governance can truly serve them. Whether setting up a new governance system or tweaking an existing system to better serve the family, this step includes:

• The three forms of governance: their purposes, how they support the family in achieving its goals
• Identifying roles and responsibilities of family members
• Identifying governance components appropriate for the family
• Incorporating the Family Survey findings
• Jointly outlining the governance structure
• Setting up the Intra-family marketing system
• Understanding why well-designed governance is a critical component in family wealth management

Step 4: The Family Office
Creating a family office is a significant process. The family office is a service entity which operates, along with the family business, under the tenets of the family governance system. The process of creating a family office includes:

• Transitioning trusted advisors to the family office from family business or advisory posts
• The family office as a service entity
• Establishing the appropriate relationship between the three governance systems
• Setting up business processes, technology, and operations
• Staffing the office
• Providing ongoing support for the family governance/family office governance relationship

Step 5: Bridging the communication/relationship/governance side to the financial wealth management side
Few families realize how communication, trust, and education issues are intertwined with the management of the family’s financial capital. Essential components include:

• Plugging in family and individual family member goals through the Wealth Optimization Matrices™
• Using Behavioral Finance to translate those goals into a financial language*
• Working with financial wealth advisors to develop a strategic asset allocation more directly aligned with the goals of the family
• Identifying opportunities to pool wealth for enhanced opportunities

Step 6: Ongoing Monitoring and Consulting
Just as with all other entities of life, families and their wealth are cyclical and flowing. As a result, the systems which govern families and manage their wealth need monitoring and periodic adjusting to adapt to the family’s ongoing needs. GRAYMATTER provides ongoing monitoring and consulting through:

• Setting up the monitoring system
• Regular reviews of effectiveness and service
• Emergency reviews tied to life events or unexpected developments
• Managing expectations
• Transitioning to next generation leadership

Tools GRAYMATTER employs in working with families:

• GRAYMATTER’S proprietary Diagnostic Questions system
• GRAYMATTER’S proprietary Wealth Optimization Matrices™
• The Morgan Street Documents private family vault system
• Strategic partnerships which support the GRAYMATTER service model

*The terms ‘personnes de confiance,’ ‘family entity,’ and ‘dynamic stakeholder owner’ are used with permission from the work of James E. Hughes, Jr. The concept of behavioral finance translating family goals into a financial language is used with permission from the work of Jean L.P. Brunel.