The Future Ready Family
November 10-11, 2019 | Philadelphia, Pennsylvania
Resilience and education have never been more critical to multi-generational family success. That perspective shaped the conversations and insights shared at Pitcairn's Wealth Momentum 2019 Forum. The annual event’s theme – The Future Ready Family – offered a powerful framework for Pitcairn families, trusted advisors, and industry thought leaders to explore obstacles and opportunities that are top-of-mind for today’s families, from innovation in the future to new approaches and thinking around technology and investing. The sessions embodied Pitcairn’s focus on helping clients at the intersection of financial and family dynamics reflected in its Wealth Momentum® service model.
Pitcairn Chairman, CEO & President Leslie Voth opened the event Sunday evening with a discussion on the powerful role of positive disruption in families and family businesses, addressing the trends and new realities facing the future ready family.
“After 100 years, we’re going to redefine how we deliver family office services. We created the Wealth Momentum model. That’s my positive disruption and the vision that we have to build out a true family office experience.”
Voth shared her perspective on Pitcairn’s role as a positive disruptor in the family office space while honoring key Pitcairn family members who have shaped the lasting legacy of the family and the firm. Finally, she offered a glimpse of her vision for the firm’s future, outlining how Pitcairn would grow to meet the evolving needs of rising generations and what exceptional client service will look like in the years – and generations – to come.
The Future is Already Here. Think Differently. - Chris Riddell, Global Futurist
"Our future is a reinvention of everything we’ve seen so far. It is not an extension of the past.”
Global Futurist Chris Riddell opened the forum’s keynote address with a powerful concept: the next few years of innovation will shape the next 100 years of society. The big disruptor is not technology, it’s the rapid pace of change. For individuals and organizations, the ability to keep pace with that change will determine their future relevance. Riddell outlined four disruptors that will have the biggest impact in the years to come – the on-demand economy, machine vision, augmented intelligence, and the internet of things. These disruptors are poised to radically alter the status quo in industries from healthcare and education to the family office sector.
- We are facing a data-driven future. Everything from our smart phones to our swimming pools are creating massive amounts of data. Organizations that can find ways to deliver customer value in generating that data will have an advantage.
- This is the era of “category killers” in which a single business dominates an industry and overtakes the competition. Google is a category killer in the business of data. Facebook is a category killer in the business of media. Amazon is a category killer in the business of brick and mortar store sales.
- Today, digital-only businesses like Amazon and Facebook are moving offline. This is a reversal of the past trend of physical stores and companies moving online. That’s causing chaos and upheaval in traditional industries.
- According to the Edelman Trust Barometer, global trust in the private and public sectors is at an all-time low, driven by political uncertainty and public companies’ inability to successfully manage and protect data.
- Consumers today update and replace their technology faster than companies. That’s created a power shift toward individuals dictating how they interact with these organizations.
- True innovators in the years to come will be defined by their ability to navigate change.
CIO Outlook - Rick Pitcairn, Chief Investment Officer, Pitcairn
Rick Pitcairn shared the Firm’s perspective on the longest bull market in history as we look toward 2020. His comments reiterated Pitcairn’s reliance on discipline and a balanced portfolio in navigating considerable uncertainties in today’s investment climate.
- Despite an inverted yield curve in the 2- to 10-year segment of the US Treasury in July, other warning signs of an impending recession have not yet come to pass.
- Pitcairn’s investment philosophy remains grounded in three core principles: Long-term perspective, sticking to the plan, and not following the heard.
- Impact investing is the fastest-growing part of Pitcairn’s investment platform, and the firm remains committed to providing clients with state-of-the-art ESG and impact investing options.
Opportunities & Risks for the Current Standoff with China - Chen Zhao, Founding Partner & Chief Strategist, Alpine Macro
Chen Zhao outlined his bullish take on the market and the lessons 1998 can teach today’s investors. He also talked about the impact of uncertainty and an evolving trade war between the US and China.
- Similarities between the economic picture in 1998 and today, including a relatively strong US economy compared to the rest of the world and Federal Reserve interest rate cuts, offer powerful reference points for the future of this bull market.
- China recognizes President Trump has a more transactional and less ideological approach to negotiations. This impacts how Chinese officials approach political maneuverings and deal making.
Finance for Normal People: Lessons from Behavioral Finance - Meir Statman, Glenn Klimek Professor of Finance, Leavey School of Business, Santa Clara University
As one of the world’s foremost thinkers on behavioral finance, Meir Statman’s presentation included videos and thought experiments that revealed how our perceptions and biases shape the decisions we make.
- We tend to segregate finance and our decisions around money in our minds. In fact, our financial decisions are influenced by all the same biases and mindsets that impact all of our decisions.
- Elements like framing and confidence impact how we make decisions and how we evaluate the other variables in an action such as trading stocks. Pride and regret impact how we look back and remember past decisions.
- Good doctors promote health and well-being. Good financial advisors promote wealth and well-being.
A Fresh Look at Sustainable & Impact Investing - Erika Karp, Founder & CEO, Cornerstone Capital Inc.
Erika Karp offered a powerful perspective on impact investing during her conversation with Rick Pitcairn. The discussion focused on how additional information and analysis are always useful tools for investors focused on returns, mission, and values.
- There’s no single definition of impact investing. What is a widely held belief is that effective investments must be in line with the individual investor’s mission and values.
- It will take trillions of dollars to accomplish the broad goals underlying impact investing. In order to access that amount of capital, we will have to look to the public markets to meet these objectives.
- More than 2,000 studies have shown investors do not have to sacrifice performance for impact in the public markets. Private impact vehicles can be more philanthropic, but do not always experience reduced performance.
THE FUTURE READY FAMILY
Challenging Our Money Mindset: How Conversations Can Empower Your Family - Amy Hart Clyne, Chief Knowledge & Learning Officer, Pitcairn; Genine Iffla, Director of Family Learning, Pitcairn
Amy Hart Clyne and Genine Iffla uncovered the power of conversations through a facilitated discovery exercise exploring and challenging our money mindsets. Whether explicit or implicit, we grow up with and develop money messages that shape our beliefs and understanding about money. Through a series of meaningful group conversations, this session was the kickoff event for Pitcairn’s Gen7 Project™ – our new thought leadership and learning lab.
- Real conversations require us to dig deep and harness a little bit of introspection, courage, and curiosity.
- Whether direct or indirect, we all have assumptions that influence how money and wealth impact our perspectives and interactions with others.
- The money message you want to convey may not be the message you are currently living by; however, being mindful of this can be the first step towards positive change.
Tech Talk: Essentials for Improving Your Cybersecurity Posture - Stephanie Notarianni, Managing Director of Operations & Technology, Pitcairn
Stephanie Notarianni shared details on Pitcairn’s ongoing efforts in maintaining industry-leading cybersecurity efforts through secure hardware and infrastructure, sound digital policies, and security awareness education.
- Our behaviors and cybersecurity actions need to evolve along with the technology we use.
- Hackers play on human emotions and use empathy and urgency to compel us to click a malicious link or share private information.
- The average individual has 90 online accounts, many of which have insecure passwords.
Protecting the Family from a Cybersecurity Attack - Colin Taggart, Senior Manager, Plante Moran; Patrick Flanigan, Manager, Plante Moran
Colin Taggart and Patrick Flanigandetailed the state of cybersecurity today and what a cyberattack looks like with a focus on how families and businesses can protect themselves on a wide range of security concerns.
- Today there are more than 10 billion devices connected to the internet with no inherent security built into the structure of the world wide web.
- Approximately 92 percent of the malware that ends up on computers is through an email. All it takes is a quick mistake in thousands of emails and countless interactions online every day to have your data compromised.
- It’s critical to monitor what information is public on family members’ social media accounts including daily routines, upcoming vacations, etc. Malicious individuals can piece together a tremendous amount of information from a few social media updates.
A Case for Family Learning: The Why & How - Amy Hart Clyne, Chief Knowledge & Learning Officer, Pitcairn
Amy Hart Clyne made the case for family learning with an emphasis on why families should prioritize wealth education to share knowledge and values across generations and how Pitcairn can enable families to achieve their goals. This inaugural Gen7 Project™ session included an interactive survey capturing families’ biggest obstacles for family learning as well as several strategies for implementing best practices.
- 85 percent of failures related to successful wealth transfer are caused by inadequate family communication and preparation of heirs. (Source: Preparing Heirs: Five Steps to a Successful Transition of Family Wealth and Values, Roy Orville Williams and Vic Preisser, 2003.) That means that in a vast majority of cases, a family’s failure to effectively talk to each other, build trust, and share knowledge led to a failure to effectively pass on wealth.
- Attendees ranked “lack of time” and “lack of a clear path” as the two biggest roadblocks to engaging in family learning.
- There are innovative methodologies for executing and enhancing family wealth education, including personalizing family learning and utilizing network learning.
GEN7 PROJECT™: RISING GEN COLLABORATIVE
Rising Gen Collaborative - Amy Hart Clyne, Chief Knowledge & Learning Officer, Pitcairn; Genine Iffla, Director of Family Learning, Pitcairn
On November 10, Rising Gen clients, ages 19-35, were invited to a pre-forum gathering with their peers, led by Amy Hart Clyne and Genine Iffla. The group was treated to an afternoon with the forum’s keynote speaker, global futurist and digital technology expert Chris Riddell, which led into future-forward conversations and a personalized learning program designed to inform and inspire. Here’s a peek at what took place during the Rising Gen Collaborative.
- Altered Realities & Trust - Chris Riddell, Global Futurist. Technology is a democratizing force, empowering people through information, and we are set for a revolution like no other over the next five years. Artificial intelligence (AI) has been changing our lives for decades, but never has AI felt more ubiquitous than now. From blockchain technology to augmented reality to machine learning, technology is transforming how and who we trust. The "device" as we know it will disappear almost entirely, and this will dramatically influence how we see our world, and the definition of what relationships mean.
- Conversation: The Future of You - Amy Hart Clyne, Chief Knowledge & Learning Officer, Pitcairn. The Intangible Age has produced a fourth industrial revolution, with the 21st century requiring new skills and applications compared to that of its 20th century predecessors. The rapidly changing landscape that you have grown up in has made your world view very different than your parents’ generations – but many constants remain the same. As we look toward the future, which ideals and values do you want to develop for this new age? What will make you more equipped? How will this affect generations to come?
- Guided Activity: Mapping Your Mission - Genine Iffla, Director of Family Learning, Pitcairn. The struggle to live purposeful lives is nothing new, nor is the idea that purpose stems from self-knowledge. We are often faced with an overwhelming number of choices as well as the expectations you and people in your life have for what you do and who you become. As a way to help guide future choices and actions, we will examine your well-being and life experiences and work on articulating your values through various self-discovery exercises. Together, we will explore areas in your life you would like to develop, then begin to build a personal mission statement to help lead your own purpose-driven life.