New Zealand Law Society - Family first. Prestige second. Money last?

Family first. Prestige second. Money last?

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In their book High-Net-Worth Psychology – Finding, Winning and Keeping Affluent Investors, Russ Alan Prince and Karen Maru assert that the views of affluent people on wealth, investment and financial motivation can be related to nine distinct money personalities. They break down like this:

Family Stewards

  • Dominant focus is to take care of their families
  • Conservative in both personal and professional lives
  • Not very knowledgeable about investing


  • Investing results in an ability to purchase status possessions
  • Prestige is important
  • Like to affiliate with institutions and advisers with leading reputations


  • Seek the personal freedom that money allows
  • Feel investing is a necessary means to an end
  • Not interested in the process of investing or wealth management


  • Focus on expanding their portfolios
  • Investments are performance-oriented
  • Tend to live below their means and spend frugally


  • Are confused and frustrated by the responsibility of wealth
  • Dislike managing finances and avoid technical financial discussions
  • Choose advisers based on a level of personal trust


  • Enjoy investing for the sheer excitement of it
  • Tend to be very knowledgeable and involved
  • Exhibit a high-risk tolerance


  • Confidentiality is the prime concern
  • Prize privacy in financial affairs
  • Likely to concentrate assets with an adviser who protects them


  • Control is a prime concern
  • Investing is a way of extending personal power
  • Decisive and rarely look back


  • Focused on leading-edge products and services
  • Sophisticated investors who like complex products
  • Tend to be technically savvy and highly educated

“Money means different things to different people, and despite combinations and sharing of traits, affluent people are often not similar and do not think, nor act alike.” – Russ Alan Prince and Karen Maru.

In preparation for writing my book, Legal Tender, in which I explore the relationship lawyers have with their money, I interviewed 61 lawyers.

The first question I asked them was: “What is it about money that is most important to you?” I gave nine choices (each linking to one of the nine money personalities) to be ranked as a top three, with one the most important. The three options reflected the fact that most people exhibit a combination of money-personality characteristics.

Responses are summarised in the bar chart at right, from which it is clear that lawyers are predominantly a mix of Family Stewards, VIPs and Independents. In this article I’m going to focus on the first two.

Family Stewards (93%)

Survey results highlighted 93% as identifying with a Family Steward personality. “Ensuring sufficient assets to provide for my family’s security and well-being” was ranked the highest priority.

As the name suggests, a Family Steward’s dominant focus is to take care of family members. As the most common affluent personality type, Family Stewards are generally conservative in personal and professional skills and often not knowledgeable about investing. Their goals usually include paying for their children’s education, giving children a head start or transferring their wealth to heirs.

As stewards of family wealth, they want to protect and preserve the resources they have worked hard to create, while ensuring their family members have the best lifestyle and education options. Lawyers place high importance on guiding their children at different stages of their lives to become independent, have a strong work ethic and be fiscally responsible. Teaching children about the relationship with money and assisting them in this area was a common response.

A famous example of the Family Steward personality is American multi-billionaire Warren Buffett. “I want to give my kids just enough so that they feel that they could do anything, but not so much that they would feel like doing nothing,” he says.

The priority of many lawyers for their younger children was to give them a private school education. However, they rarely had to sacrifice anything to achieve this in terms of savings, repayment of debt, or lifestyle.

Interestingly, and totally unexpectedly, the high school son of one interviewee designed a gaming product and sold it to a developer for a six-figure sum, effectively covering all his education (high-school and tertiary) fees and providing his own head start for the future, rather than relying on his parents.

When it came to tertiary education, lawyers were still keen to pay for their children’s university fees and living expenses, although in many cases they actively encouraged their children to work and contribute towards those fees.

One lawyer saw this as an opportunity to educate his son about money. He encouraged him to get an interest-free student loan and actively involved him in how to invest an equivalent amount of money in a lump sum, which would be distributed by the family trust at the end of his studies. He could repay the loan with the original amount and keep the returns from the investment. In so doing, family support was there, but subject to the son achieving agreed milestones. Like Warren Buffett, the lawyer wanted to help his son, but there had to be an incentive for him to complete his studies and be successful.

Said Warren Buffett’s son Peter: “My sister famously went and asked for a loan to remodel the kitchen and my dad said: ‘Go to the bank.’ He did the same to me. It sounds harsh but it’s actually very loving. It’s a show of respect, saying: ‘You can do it, I believe in you and if I have to give you a crutch you are never going to learn how to walk.’ That’s the way I look at it and I think it’s right. I did go to the bank and I got loans for equipment, built my business, and worked my tail off to pay the loans off, and I would not have done that if somebody was just writing me a cheque.”

Head starts for children regularly came up in the interviews, most commonly in the form of assisting with a house deposit to help them get on the property ladder. One lawyer explained how he had structured such a deposit as a loan for each of his adult children with repayment required at a later (unspecified) date.

Lawyers are inherently aware that without careful planning, hard-earned wealth can easily be dissipated in a generation or two. The phenomenon of the fleeting fortune is so well recognised that it has inspired the saying “shirtless to shirtless in three generations”.

Other Family Steward traits identified included inheritances or large sums available in trusts with tight specifications that must be met before the money is made accessible.

Looking after or supporting ageing parents was a common theme, further underscoring the Family Steward role, with that concern not limited to biological parents. One lawyer was visibly anxious about the financial impact of his brother-in-law on his in-laws, who had guaranteed his business debts by mortgaging their home.

The lawyer was particularly worried as his brother-in-law was involved in speculative ventures and his parents had put everything on the line for him. He totally accepted the fact that if (as a result of the brother- in-law) his in-laws were financially disadvantaged, he and his wife would come to their rescue.

VIPs (90%)

The second most frequently selected money personality was the VIP. Prestige is important to VIPs, who usually want their investments to aid in buying possessions and respect. They are less control-driven and often not sophisticated about investing.

The survey question linked to the VIP personality trait related to “having sufficient assets to enjoy a good lifestyle”, which manifested itself when the lawyers listed their lifestyle assets. Not only did most own a family home (often valued at several million dollars), but many also owned a holiday house and multiple cars. A number of lawyers talked excitedly about their lavish collectables: bloodstock, extensive art collections, bikes and wine cellars. Some were adamant these were not lifestyle assets, but high-performing investments. Others saw them as part of what they enjoyed in life.

One described what he considered a modest wine cellar, but a quick calculation showed he had enough bottles stored away to last a decade. Another admitted to having taken his love for cars to an extreme, recently purchasing a home with a stand-alone building in which to store his prized vehicles.

These avid collectors believe they are otherwise conservative investors and that such purchases allow them to enjoy the finer things in life, for which they have worked hard. And who can blame them for that?

It’s clear that for the majority of lawyers their focus is to take care of their families but they don’t consider themselves very knowledgeable about investing. Quite a large proportion of those interviewed appreciate that investing results in an ability to purchase status possessions, and they feel that prestige is important and they like to affiliate with institutions and advisers with leading reputations.

For Family Stewards and VIPs, making decisions about money carries with it a weighty emotional context. This has a measurable impact on their ability to make rational decisions about money. This is something I will unpack with more detail in upcoming articles.

For now, I will leave you with these wise words from Jonathan Swift, author of Gulliver’s Travels, who is quoted as saying, “A wise man should have money in his head, but not in his heart.”

Laetitia Peterson is a personal wealth adviser and is married to competition barrister Andrew Peterson. She has worked with companies such as Goldman Sachs and boutique funds management firm Liontamer, which she co-founded with Janine Starks. She is now the CEO (and founder) of The Private Office, helping successful lawyers achieve the financial goals important to them and their families. Laetitia’s book Legal Tender explores the ideas of family stewardship, typical money behaviours, attitudes towards money, and lawyers’ views on wealth creation.

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