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Don't Call Me Mom: When Advisors Join a Parent's Firm

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Sara Botkin reached the decision to work in her father’s financial advisory practice on Sept. 12, 2001.

The morning before, she had been in the lobby of the South Tower of the World Trade Center, waiting for an elevator that never came to take her to the 105th floor. Botkin had been pursuing a career in classical music in New York and working temporary jobs to make ends meet. Her father’s offer to join the family business in Pittsburgh was tempting. What happened on Sept. 11 sealed the deal.

“My whole brain just switched,” Botkin recalls. She was ready to go home.

Not all decisions to work with family in an advisory firm are as dramatic, of course.

Hannah Basil’s epiphany took place while she was working for a startup tech company in Chicago. Basil’s first job after graduating from college in 2013 was with a large bank, but she wanted to develop a financial planning app for millennials and was drawn to the wider latitude a startup appeared to offer.

But Basil discovered that the demands of the firm’s outside investors limited the freedom she had envisioned. As it happened, Hannah’s mother, Lois, had more work than she could handle at her planning firm in Chicago’s Lincoln Square neighborhood. Lois invited Hannah to attend an Alliance of Comprehensive Planners conference with her in the summer of 2014.

“You have to be willing to give up some control,” says Lester H. Botkin, on working with his daughter, Sara Botkin, and her brother, Lester Botkin, at Botkin Family Wealth Management. 

The idea of working closely with clients appealed to Basil, as did the freedom she could have working with her mother. “I realized that in a small business we can do things our own way,” she says.

Whether influenced by family bonds or business opportunity, the idea of parents and children working together as advisors is clearly an appealing one. What’s more, it can be a satisfying solution to the often contentious — and neglected — problem of succession planning.

Indeed, only 28% of firms have next-gen owners in place, despite the fact that more than one in three owners are planning to exit the business in the next 10 years, according to Fidelity’s 2015 RIA Benchmarking Study.

Finding the best way for families to work together in an advisory firm can be a delicate process, requiring patience, flexibility, trust and fortitude. But the rewards, according to those who have successfully navigated the process, are worth the effort.

The initial transition for children coming into a firm where their parents are established as owners, partners or senior executives is usually the most difficult adjustment, say those who have gone through it.
No ‘rainbows and Sunshine’

Thomas Payne joined Tri-Star Financial, his father Bill’s Houston-based brokerage and advisory firm, in 2002 after working for an environmental company in California. Like Sara Botkin, he had done some soul-searching after 9/11 and concluded that if he didn’t forge a closer relationship with his father then, it wouldn’t happen.

But Payne admits things were “rough at first. You’re a target for everyone already there. I’m sure my father had to hear from everyone how much I sucked. It wasn’t all rainbows and sunshine.”

But his father made clear to his son — and to his partners and the employees — that if Thomas screwed up, he was out. “Every father has to do it a different way,” says Bill Payne, Tri-Star’s president. “I wanted Tom to be the best in the company, and I tried to be as fair as humanly possible.”

Fourteen years later, Thomas Payne is established as an investment executive at Tri-Star Group, specializing in fixed-income securities.

Payne’s trial by fire was replicated by his brother-in-law, Jon Swanburg, who married Bill’s daughter Rachel and joined the firm in 2009.

Initially, Swanburg’s role was not well-defined. “This created some problems,” Swanburg recalls. “I was dissatisfied because there wasn’t a clear track and other people were uncomfortable with me on their teams because they never knew whether I was an assistant, a manager, or something in between.”

But Bill Payne stepped in and established a set of ground rules for his son-in-law. “We developed a path that added clarity and established me as an assistant,” says Swanburg, a CFP. “The only way I was going to move up was if my team grew assets under management, just like everyone else that starts in the business — no short cuts and no special exceptions.”

Having established metrics have also helped Greg De Jong work more comfortably with his son Nick.
De Jong owned his own firm, Paragon Advisors, in Naperville, Ill., a Chicago suburb, for nearly 20 years. He was close to his son Nick but didn’t offer him a job because he was afraid of being accused of nepotism.
But after De Jong sold his firm to Savant Capital Management in 2013, Nick, who had been working as an accountant, interviewed with Savant and was hired last year.

He’s completing Savant’s accelerated career development program in the company’s Rockford, Ill., headquarters, and will join his father in the Naperville office this year.

“At the end of the day, it’s a great comfort that Nick has to prove himself using the same metrics that apply to every other advisor in the Savant organization,” De Jong says.

While Nick De Jong won’t be reporting to his father, he says he’s looking forward to working with him: “I’ll be able to learn from Greg as a professional beyond what he taught me as a son,” he says.


But exactly how do — and should —families work together as professional advisors? Both parents and children say establishing boundaries between personal and business life is critical.

When Hannah Basil joined Chicago-based Basil Financial Group, Lois Basil hired a business coach, who recommended setting rules for boundaries and communication. For starters, Hannah would call her mother “Lois” in the office, not “Mom.” The two might chat about personal affairs before work got started, but afterward they “very rarely” talk about their personal lives, Hannah says.

Lois insisted on strict rules for social media: checking Facebook at lunch was OK; planning a trip or a night out with friends during work hours was not OK.

When David Demming Jr. joined his parents’ Cleveland-based firm, Demming Financial Services, in 2003, some staffers wanted to call them “Big Dave” and “Little Dave.”

“Absolutely not,” the younger Demming informed them. “That was not going to happen.”
Keeping business and personal life separated was also a goal, though not as easy to enforce, especially because Demming’s mother is the firm’s chief financial officer and treasurer.

“It gets muddied,” says Demming, now the firm’s vice president and chief investment officer. “You don’t want to talk about clients at the dinner table, but sometimes you do.”

One way the Demmings try to draw a boundary is to go to a private dining club in their neighborhood when they want to discuss the business outside the office.

Still, it can be difficult to extricate business from family dynamics that are all too human. “Sometimes you find yourself wondering ‘What’s work? What’s family?’” Swanburg says. “People don’t always agree, and if you’re having an issue in the office related to a client, you still have to show up for Christmas dinner.”

Conversely, it can be difficult to extricate family dynamics from business. “When our stress level is up, we probably get a little snippier with each other than we would with another co-worker,” Lois Basil says. “On the other hand, we can read each other’s stress level better than anyone else could.”

As for the actual hard work of planning and advice, families who work together say teamwork and accommodation are critical for success.

After an earlier career in education, Dorothy Bickling, who was also a licensed psychologist, founded Bickling Financial Services in Lexington, Mass., in 1987 and was joined by her sons, Spencer Betts in 2000, and Andrew Betts in 2007.

Dorothy raised her sons as a single working mother and that experience, the family says, proved to be a useful prelude to their future partnership.

“We had to pull together as a team very early,” Andrew recalls. “Mom taught evening classes so we used to prepare meals together for the week on the weekend.”
Having a team mentality early on helped the family to be better organized and more honest, Spencer adds.

“If we wanted something, we had to be very explicit and tell our mother exactly why. One year, I wasn’t clear about what I wanted for my birthday party and it wasn’t a very good party. The next year, I gave her a mini-business plan.”

As adults, Dorothy, Andrew and Spencer say their advisory firm more closely approximates three independent businesses under one roof. They share a bullpen space, collaborate closely, but hardly agree on everything. “We’ve learned to disagree respectfully,” Andrew says.

The key to the firm’s success, he continues, has been his mother’s willingness to accept changes in the practice. “My attitude has been shaped by being both an educator and a mother,” Dorothy Bickling says. “I don’t have to be right about everything.”

Indeed, collaboration and open-mindedness are common threads in successful family practices.

Even Arthur Kraus, a bona fide industry pioneer who has been an advisor for nearly 50 years, admits that “over the years, you can get entrenched in your own ideas.”

A former chairman of the National Association of Insurance and Financial Advisors, Kraus came out of retirement in 2003 to launch a new firm, Capital Intelligence Association, based in Santa Monica, Calif., with his son Mitchell.

In the beginning, Mitchell Kraus says, his father “wanted to do things the way he had always done them.” But Arthur says he realized the firm could benefit from a combination of his institutional knowledge and new ideas from his son.

Specifically, Mitchell championed socially responsible investing, also called impact or sustainable investing, as a niche the firm could specialize in to attract both younger clients and those interested in philanthropy.
Arthur embraced the approach and is now a chartered advisor in philanthropy. Capital Intelligence, furthermore, has a thriving multi-generational practice and a reputation for expertise in impact investing.

“When I began taking the philanthropy class, it was an ‘aha’ moment,” Arthur says. “We changed the practice to focus on giving an extra layer of service and putting our values behind it. I don’t think I ever would have done it without Mitchell.”

Sara and Lester P. Botkin also say they’ve benefited from family integration and input.
While still at Morgan Stanley in 2007, they were joined by Lester H. Botkin, Lester’s son and Sara’s brother. Last year, the Botkin Group went independent to affiliate with LPL Financial as Botkin Family Wealth Management. The transition, Sara says, couldn’t have happened without the family “being completely honest about what we were good at and not good at.”

Lester Sr., who was a popular local golf professional for nearly 25 years, is the most social family member and is the firm’s rainmaker. His son, a former Marine who did a tour of duty in Iraq, is a certified financial analyst and oversees the firm’s investment strategy and portfolio reviews, while Sara handles marketing, events and the firm’s social media presence. Sara credits the trio’s smooth assimilation to her father’s “honesty with us and generosity.”

Lester Botkin’s take on the success of his firm? “I have smart kids.”

Lois Basil says her practice was “transformed” when her daughter joined. “I went from being a solo entrepreneur to a business owner,” she says. “Now I feel like I’m managing the business instead of the business managing me.”

Combining different skill sets and no-holds-barred candor have been key, Basil explains. “Hannah’s tech skills have allowed us to start using a private cloud server and update our software,” she says. “And I really value the absolute honest feedback Hannah gives me. I’m not sure I could get that from anyone else.”


Curiously, succession planning doesn’t appear to be a driving force in causing parents and children to team up. But once a family practice is established, knowing that there is a new generation poised to take over the business has been reassuring to clients and employees.

Dave Demming wasn’t thinking about a successor when his son joined his practice. But it quickly became apparent that clients appreciated knowing that the two men could be “interchangeable,” he says.

“We have different personalities but share the same goals for clients,” Demming says. “I think it’s myopic if you don’t have interchangeability of clients in an intergenerational practice. I’m happy if Dave Jr. sees one of our clients and they don’t tell me, ‘I missed you, Dave.’”

Indeed, the firm’s clients “wanted to know who is the future,” says Dave Demming Jr., one of the founding members of the Financial Planning Association’s Next Generation group. “Dad wanted us to be interchangeable early on and made the clients feel comfortable. I don’t think they ever felt threatened, and now they’re ready for the next generation.”

The Betts brothers joined their mother’s firm, an LPL affiliate, for different reasons: Spencer, a computer engineer, wanted to move back to Massachusetts and Andrew thought the skills he learned running a wine business for six years would transfer nicely to planning.

Once it was clear that the brothers and their mother clicked as a business team and trusted one another, the family began to look ahead.

Dorothy Bickling says she is relieved she doesn’t have to worry about a successor. Spencer Bickling and his brother have agreements to buy each other out if necessary and are working on a business plan “for the next 25 to 30 years.”

“It’s nice building a practice knowing it will be there in the future,” he says, “and knowing who will be running it.”

Similarly, Lester H. Botkin and Sara Botkin are set to take over the business when their father retires. “If you’re trying to figure out succession planning,” Lester Sr. says, “there’s nothing better than this.”

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