Episode 59: Emily Balentine Barbour on Multi-Generational Wealth and Family Legacy at Balentine

FBD58 Emily Barbour === R. Adam Smith: This is R. Adam Smith, creator of the Family Business Audiocast. I'm pleased to be here today with Emily Valentine Barbour, who is partner and Head of Client Engagement and Family Legacy at Valentine, a leading Atlanta based wealth management firm.

It's great to have you today, Emily. Emily Barbour: Thank you so much for having me. I'm excited to be here. R.

Adam Smith: Yeah. So I'll talk a bit about you and then we'll jump right in. Emily, as I said, is a partner and Head of Client Engagement at the firm, she oversees the client experience at Valentine is very passionate about helping families navigate many complexities of wealth, and values a long-term legacy, a core theme in this podcast. She has been with Valentine since 2010, just right after the firm's founding and has served in many roles, of course, over the years leading up into her current leadership position.

This gives her firsthand insight into many of clients' needs and their family governance situations and the operational challenges of wealth management itself. She has been instrumental in shaping the firm's white glove gold goals based approach, and ensuring the clients not only protect and grow their wealth, but also align it with their personal and family values. Emily's experience spans working directly with entrepreneurs, also multi-generational families and legacy planning.

This makes her very uniquely positioned to discuss both the human and financial sides of family wealth. I'm very delighted to have you here today. Are you ready to jump in? Emily Barbour: I am ready.

R. Adam Smith: So let's talk a bit about the firm. It is a, of course, one of the leading privately held wealth management firms in the country, providing peace of mind or performance to hundreds of entrepreneurs and families. Can you talk a bit about the firm, some of its accolades and what makes it unique?

Emily Barbour: Sure. We are an RIA based in Atlanta, Georgia and for a little bit of background, I'm the third generation working at the firm. My father and grandfather originally started what was called Valentine and Company back in the late eighties, and we're really on the forefront of kind of a, investment fee only advice. And after growing it, they sold the firm to Wilmington Trust, of Delaware.

And then kind of during the financial crisis, my grandfather had passed at the time. My father and some partners decided that they really did not wanna be part of the big bank and wanted to be independent again, and swore to, to always be independent. That was in 2010, when I joined the firm they relaunched as an RIA. We have about eight and a half billion under advisement at the firm, and we also have an office in Raleigh.

And as you said, we cater mainly towards families and entrepreneurs and it's just been very exciting last 16 years and we're in an exciting phase of growth. R. Adam Smith: That's amazing, I can see that. Also the firm has been named to many awards and accolades in the industry, which is wonderful.

The firm has been named, for example, a top 50 fastest growing RIAs, best place to work, Atlanta's best places to work, premier advisor. Very laudable. Obviously, I see the philosophy combines both financial management and going deeper into the soft power, legacy, human capital and so on. Do you consider to be a wealth management firm, and or multifamily office and or OCIO organization?

If you could just comment on that. Emily Barbour: Primarily, a wealth management firm and we do work with some family offices, but wealth management. R. Adam Smith: Okay, great.

You started way back in relationship management over 15 years ago. And it's really unique to not only be part of the development of a wealth management firm, but also part of a family held firm. And of course it was also transformed and brought back into the family circle, which is amazing. We'd love to talk you know about that because it's a pretty unique situation.

Maybe just share a little bit about what it's like working in a family health firm and how that relates to your ability to appreciate the clients, the family offices, and alternate worth and quibb, especially related to their, family values and their larger family health companies. Emily Barbour: My experience is unique in that, I think a lot of people assume you work for a family business and things might be handed to you or you have a path carved out ahead of you. And I feel like in a way I've had the opposite experience.

I've used the term reverse nepotism before. When I joined the firm, and I interestingly did not have any background in finance, had never taken an economics class. I was a psychology major. I remember saying to my dad, do you think that you maybe would hire me?

And they put me through a rigorous interview process and I started as a administrative assistant and really have had a lot of roles in the firm. And it's been fun to see how over the last 16 years, both my personal experience of being someone that's had to work, and carved my own path recently being made a partner, which was a very proud and emotional moment for me. I'm the only sibling, I'm one of three, in my family to be involved in the business. My experience working alongside families, clients directly, has just really led me to this natural point.

What's fun is, and you touched on this, we believe that the future of wealth management is family and legacy. This was a role that did not exist in our firm a year ago. In fact, I play kind of a dual role. I'm in charge of our client experience and we'll talk a little bit about that and the philosophy there.

And then I lead up our family and legacy efforts. So it's been, it's been really fun to see how my background has led me to this point. Also having that empathy in my own experience being a rising gen in a family, but also walking alongside clients and having that experience, helping them lead to this point. R.

Adam Smith: Definitely. I love that, obviously the whole business is based on clients, so I think the art of advising is very complex and becoming more complex in this competitive world of wealth management and the family office ecosystem. Then the most successful wealth management firms build trust. Of course they offer unique advice and products and alternate investments, but ultimately I think that trust and brand is key.

And it's of course, with my background in M&A, it's very interesting to see the firm come back to its family roots. Maybe you could talk a bit about, I guess the alignment of advice with client values and just, talk about how the client relationship works. What are the core values and tenants and services to your clients? Emily Barbour: One of the things that I say has been most fulfilling about getting to work in this business is getting to see my dad as a leader of a business in a very similar parallel to how he has led our family.

The same values that he instilled in our family growing up, are the same values that we instill at work and that we see in a lot of our clients. You know, it starts with the employee experience. My grandfather always said that if you ask your clients, they'll tell you how to run your business. And I think that having the employee experience and the, the client experience are so deeply intertwined in.

Knowing and recognizing our own value system before we do the work, with families is so important. I dunno if you've heard the quote before from Roy Disney, it's when you know your values, your decisions become clear. And so, we believe values are such an easy place to start with this work, and just having employees and clients recognize- what do I believe and what's important to me? And then that kind of helps them as they navigate these decisions.

R. Adam Smith: I love that. To be able to bring those values across more than one generation is hard actually and super unique within the organization. And you see that challenge within the movement to G two and G three.

You wanna talk about next gen for a bit and what is going on in the next gen out there within your clients? Especially let's say the mid-size family businesses, and particularly we talk about a lot here on the podcast with some of the colleagues, Emmy Bouchard, Elizabeth Bagger, James Gorman, and Christina Wing. We've talked about Richard Wilco whiz, we've talked about this over and over again. There's the hard power, soft power.

There's also like the economic commercial opportunity for the next gen. But then there's their personal passions that might be different than the family business itself. Emily Barbour: I think engagement is really key. There's been such a focus on the leading generation and seeing through their eyes.

We talk a lot about seeing the world through another generation's eyes, perspective from someone else, and I know that this is industry buzzword, everybody's focused on the next generation. But it really is so important. I think having them be engaged, they've gotta be willing to wanna do the work. 'Cause the parents can say, we want our children to be prepared, we want them to be educated.

But, they've gotta be willing to lean in, and do the work. And one of the areas where we've been most successful is we have created a rising gen cohort. That's been a, a little bit of a secret sauce just as a firm, is being able to create a client community where we bring clients together and we get to learn from them. It's not just we're there to facilitate.

Yes, we have the experience and the knowledge from other families and our own lived experience, but where we can put them together and they can learn from each other. I think that the rising gen really likes being able to connect with each other in a way where they say, I can't talk about this stuff with my friends. R. Adam Smith: Right.

You actually bring, the next gen members of some of your clients together in a virtual way or physical way, or how does that work? Emily Barbour: It started as a in person. We do a client retreat and it is multi-gen. And at the retreat we would break out into smaller cohorts based on generations.

And so there was kind of a natural connection that was formed in this intimate retreat over two days that we then gained momentum off of. It's really hard to just create virtually with a group of people that have never met before, that intimacy to be able to talk about those things. So that was kind of the starting point and have gone from there. R.

Adam Smith: Great, that's super nice. So back to human capital, could you just talk about the development of, let's say, professionalization of the family office or the larger family businesses and what you're seeing out there in, the hiring of external CEOs into the family business or onto the board of family offices or family health companies? Obviously you're focused on the, creation of wealth, but also the continuity of wealth is highly related as we talk about often to the continuous development of their main company and the excellence and capabilities of their main company that tends to hold most of their wealth.

So I'm just interested in hearing what you're seeing. Do you guide your clients? Do you observe, like what's happening in the, institutionalization or scaling of some of the bigger family businesses? Emily Barbour: It's really tricky.

We talk a lot about the business of the family and the family business and you know how to, how do you separate those at all if you can. And I think about one family that we work with, and it's been interesting because in a positive way, there's been no successor within the family. This is at the cousin level now, outside of board seats. And I think that they almost prefer that there's no internal family member that's going to be taking over.

That it just puts everybody on a, level footing. But we do a lot of advising clients with that because it is tricky. You have to take into account what's best for the business, not just what's best for the family and how everyone feels. There's a great book, have you read Hug of War by Cathy Carroll?

R. Adam Smith: I've heard of that, actually. I did not read it. Emily Barbour: It's really good, but it talks a lot about that, family succession and, and how to navigate all of that.

R. Adam Smith: Okay, good. So let's come back to the wealth management itself, maybe a bit on the firm. Like how is your firm structured?

Who is doing what, how large is it? What are the functionalities within the firm? Emily Barbour: Sure. We have about 65 employees and it is a very team-based company.

The compensation structure has been intentional in that to create this kind of team-like atmosphere. Which also helps with transitioning clients that, it's not that I have a guy, it's I have a team and, we want them to be clients at the firm, not of the person. We have our investment team that is separate from our relationship management team. And our relationship management team, their primary focus is to, of course take care of clients, but k eep apprised from the investment team.

And I think I already mentioned that we have an office in Raleigh, and in Atlanta. And from a servicing perspective, we have two levels of, of clients. We have our wealth management level clients, and then we have our kind of multi-family office level clients. Part of my role in my putting on my client experience hat that I have tried to do is, I always say we wanna have a, consistent yet standardized experience, which helps allow us to scale, right?

Everybody can't be so one off and customized, but we don't wanna be so cookie cutter. So we have the same pillar offerings across the firm and those are really core to our family and legacy, our business advisory, our private capital, our investments, and then our wealth management. And depending on kind of what, tier you are, you're still getting the same pillars, but you may be getting it in a different way. So one of the things that I am proud of that we've done around this family and legacy pillar is, what started as a kind of bespoke offering that we were gonna serve up to our kind of top level clients.

We realized, you know what, everybody can benefit from this work. I partnered with, I'm biased but I think he's one of the best in the business, Mitchell Spearman, Family and Legacy Advisor. He came in to help us not only with helping clients directly, but also training our internal teams to do the work themselves. So we kind of have made it recognizing he can't be front and center with every single client, or we've been training our internal staff to be able to have these conversations and lead these family meetings themselves so that everybody gets some level of it.

And so we're doing that kind of across all of our pillars. R. Adam Smith: That's nice. Yeah, I think I've heard of him.

He's in Texas - Emily Barbour: Yes R. Adam Smith: And the Carolina's been around the space for a bit. Yeah, thank you for bringing him up. Okay, so let's move over to succession and the stewardship of that succession.

I'm not sure where Valentine gets involved in the governance or creation or mentoring on the governance. But succession, especially when there's a transition of a major business sale or preparation of a sale or just moving the CEO to next gen is a really big deal. We talked about human capital, talked about that governance, like the board of directors or board charter or external advisors, and just preparing for that succession planning at the business level. And that relates of course, to the attention to multi-generational wealth with the children or sometimes not the children.

But if you could just talk about what you're seeing, what you advise on, within that succession and like what are some of the hotspots, that you guys see over there? Emily Barbour: Yeah, it's huge. And as I said, in working with a lot of entrepreneurs, we do a lot of work. So we have a business advisory service offering where we do exactly this with families and we walk 'em through their governance and help them structure, you know, what makes sense for everyone and who are the key parties that need to be involved?

There's such an overlap. I never wanna be as a firm where everything is so siloed and separate because there's such an orchestra that needs to happen of, when to bring in, the Family Legacy component with the business advisory. There is so much overlap there, and back to it starts with values. We've gotta understand what do all of the stakeholders value?

What's the goal there? It's not just putting the governance in place, but it's understanding the intentionality behind it. R. Adam Smith: And what about the expectations of next gen actually taking over the business versus wanting to just have a relaxing life- " I don't really wanna work that hard and just go about my thing as a millennial or Gen Z and just move on to some other" - Emily Barbour: You know, making a generalization here, but I think there sometimes is a disconnect between the wealth creator, and the next generation.

And at one of our retreats, actually a couple years ago, we had a client. The dad stood up and said, you know, everybody in this room we're all grinders, we grind. And the son stood up and he said - "You know what, dad, I don't wanna be a grinder. I wanna be able to go home and see my wife and my kids.

And I'm so grateful that w hat you've built has allowed me to have that flexibility." But I think that there is somewhat a generational shift between that desire to quote "grind", and to be able to appreciate, maybe this leg up that, that the wealth creator has given them to be able to have a little bit more balance and do what they wanna do. R. Adam Smith: That also avoids all the psychological and family tension, and the imposter syndrome and the ego, and just accept the children to respect their own decisions as a human.

Emily Barbour: Yeah, for sure. And I don't think every parent is wired that way , and that's some of the work we do is to help them see, again, that perspective. Seeing the world through another's eyes, because it may not be what mom or dad desired. R.

Adam Smith: Why don't we move into legacy? What are your thoughts on legacy? Let's, talk about it from, let's say the family office perspective. We look at legacy as the core of this podcast and the definition of legacy being very personal and specific, and respecting the differences of opinions and the definition of legacy.

So first, from the family office perspective as the client. How do you think the family offices are typically defining legacy? And then I'm curious about like your own company as well, it's very different as an operating company. What are you seeing externally at the client level defining legacy, and then how do you reflect on that for your company?

Emily Barbour: My dad always says, I know a lot of people with a lot of money that don't have a legacy and a lot of people, without money who had a big legacy like Mother Theresa and Martin Luther King. So it's interesting this idea of legacy. Because we are talking about it in terms of wealth, but also it applies to everyone. And I think it's unique to each individual.

Again, you can't have a cookie cutter experience for everybody. You kind of have to meet the client where they are. We've got a client right now working on a memoir, and I think it's the greatest experience of his life. He's having so much fun doing it.

We're helping another family right now with. Creating legacy through a three generation foundation where we're engaging, the third generation and helping them put governance and structure into it. It's having these pathways to kind of present a menu of offerings of, here's some different options. But we've got another client who bought a bunch of property in, Texas is, trying to build out a dream vision of what they want it to look like.

And what do they want it to look like now while they're alive and then when they're gone, what does it look like? It's all very exciting, but it's personal. R. Adam Smith: Yeah, and it's getting bigger of an issue as well.

As the next gen community gets bigger, as wealth is moving down right now in this great transfer of wealth. But the wealth is I think, overestimated transitioning to the children. And I think it's a bigger issue that's uncovered, which I cover and focus on from a reality perspective in terms of M&A is there's a lot of wealth that will be created and transitioned out of the family in the sale of their companies. I'm interested where, looking at the whole family ecosystem, looking at multi-generational wealth, I think it's interesting to look at where that wealth is going to go once it hits the bank accounts of the family and the children.

What are you seeing in that regard? What do you recommend? What do you see? Where do you see the children, working and going, if they're not gonna work, for the core family business, what are they doing out there?

Emily Barbour: It's interesting, back to philanthropy, I think that's a big part of it. We work with a lot of clients who, they may think it's not a big number now and it's not a big issue. But, sure is easier to plan these things when you only have two generations or the, the balance sheet is smaller than when it multiplies. And so philanthropy's a big one, I think a lot of people have the structures in place.

They have the trust, they have the, foundation set up, but they don't know how to engage with it. They don't know how to use it. So I think people are gonna be looking to move money philanthropically. The, private space is a big one.

We've talked about some sort of educational programming for the next generation where they can learn more about how to pick and choose investments, you know, on their own. 'Cause I think they're getting approached by friends to look at deals and maybe they wanna start their own ventures as well. R. Adam Smith: Got it, I agree.

I think venture capital, philanthropy, startups, and also passion projects like art for example are very relevant. So we've got about 10 minutes left. Maybe we look at trends and what's evolving. For wealth management clients, there's such a significant focus on technology, using technology, cybersecurity, and of course the utilization of technology within the operating companies.

Super important to, to support family offices and their bigger businesses in giving them those resources, encouraging them to use technology so they can stay ahead. Not just cybersecurity, but like actually leveraging technology tools, AI cybersecurity, CRM, different systems. What type of clients do you all cover, and do you cover technology companies? What do you think is going on in technology, at the operating level?

Emily Barbour: AI is so big right now. I think one of the best internal decisions that we made a few years ago was hiring a tech guy who, he has the freedom to just build and create, and he's creating agents and I know within our own business, it's just transformed. But in talking to clients, I think there's just a lot of focus, I should say maybe fear about what does the workforce look like, you know do we - R. Adam Smith: Yeah, what's my utility as a professional going five years out, 10 years out?

Am I going to stay on top of the pack or should I maybe just sell the company or get out now because it's changing so quickly? Emily Barbour: Yeah. Changing so quickly and just even in forecasting hiring needs, are we gonna need to have less people? Will the technology truly replace that or not?

I think there's a lot of uncertainty there, but I think there's a lot of efficiencies that have come along with AI. R. Adam Smith: What are you guys doing as a firm with AI? Emily Barbour: Note taking has been huge.

I feel like if you've met one advisor, you've met them all. They don't like to have to take notes and put them into the system, and that's just one of those compliance requirements. I'm actually, I've been surprised how little pushback there has been from clients. I think it's been a natural evolution.

And people seem to understand and it, helps us to be better and smarter. Back to the customization, we're not having to do that. We're able to say, we're gonna go through 15 years of meeting notes and we're gonna be able to summarize not just who our clients are, but like across the client base, what are the trends we're seeing? What are the questions clients have been asking over the last quarter, which help us to create marketing content?

What are the kinds of events we should be looking at based on interest? So it's helped a lot with productivity there. I use it all the time just in my creating. From HR, job descriptions and reviews and all of that.

But from the client side, it really is helping us more with analytics around who our clients are, what do they want. We've created relationship roadmaps, which help us look at historical data and say, okay, what should we be focused on in the next two years without having to do it manually? All of it was done manually in the past, and so it's just freeing up bandwidth to focus on more thoughtful ways to engage our clients. R.

Adam Smith: Nice. Our last topic we can cover, you know, more long-term thinking. There is obviously value in long-term thinking and capital creation, wealth creation, capital creation that's tax efficient. But also the longer term thinking for the client, as a business model, what is the lifetime value, of the customer for the firm, and what is the long term relationship with that client across the generations?

And the ability to retain that client in this industry is hard because it's super competitive. There's lots of competitors out there that want your clients. So maybe just, talk about that longer term thinking and then we can. Wrap up and talk about, the uniqueness of the firm and its ability to serve the client in fact, longer term.

Emily Barbour: You're not wrong. They do want the clients and they want the employees too. In this world we're living in where, there's so much private equity that's gobbling up all the RIAs. It's really a different world we're living in right now, trying to attract both talent and employees.

R. Adam Smith: It's a complex question because the long-term perspective of the client is directly at odds with maximizing the fees, maximizing the transactions, selling product. Focusing too much on G one, not focusing on G two, lowering the fees, looking at, okay, it's not just an SMA like fee transaction, it's actually we're going to, provide custom services. We're gonna introduce you to alternative investment firms.

We're gonna bring you coaching and human capital and other MFO type services, not just an asset management product and this in-fact, is the evolution. Emily Barbour: Yeah, so I think back to the buzzword of next generation, it is very important to be engaging that next generation. I also would highlight the spouse. I think that's an underestimated retention tool that in the world we live in, I think people underestimate sometimes who the decision maker is.

And, it oftentimes is the woman. Actually, I think we have more women than men in our firm, but it's, important sometimes to put a female in a meeting to help that and read the room and read the cues and how they're they're feeling. But yes, trying to engage the next generation, it's actually an opportunity also for us to engage our next generation internally of advisors. We're sensitive to the fact sometimes the children don't necessarily wanna have the same advisor that mom and dad do.

And so it creates a great opportunity for our kind of younger, newer teams to come in and educate and form those relationships. So that's a good one. The service offerings also have to evolve. As I said, I feel like the industry went from investment management, to being a commodity, to financial planning, to, now the next big thing is this family and legacy planning.

Which I think is here to stay. It is, truly what it's, I will call it relationship super glue. Clients are, happy for us to continue and expect, I think, to continue to grow the money. But if we can help their children or we can help their family, that's what will make a long lasting client.

R. Adam Smith: Right, which is taking into account a more selfless and longer term and caring approach to the client that is not related to the transactional nature of asset management and product. How do we add value to you as a client? And that does take some time and margin away from the client.

But in a sense, I think that incremental work that wealth management firms do and multifamily offices do, as a organization of kin is increasingly important. And we're seeing it happen in the industry, which is great because it is what the clients need. And it is harder of course to make that decision, I think at the corporate level because it's not as profitable. But as the tides rise and it gets more competitive, those additional services are necessary to maintain the client.

So if those additional services are not provided right, the soft touch, then you'll have more turnover theoretically. Emily Barbour: Right, and again, not to ding the private equity backed companies, you know, there is an advantage of not being so beholden to the investor and trying to squeeze it out and being able to be thoughtful about it. But I do think that we have to be thoughtful. What I was saying earlier about kind of our train, the trainee model of we've gotta figure out how to make it scalable and profitable, but offering up these services to everybody and not saying only these clients get this service.

It will also be interesting to see how the industry evolves and what keeps clients long term. Does having a kind of key turn offering appeal to clients versus, we've always had the approach of we wanna focus on these areas and we're gonna, you know, work with whichever CPA or attorney, we wanna advise you would the best and we'll work collaboratively and be the quarterback. But I'm seeing more firms try to build in that offering or partner up with other firms, it'll be interesting to see if that long term trend sticks.

R. Adam Smith: I got that. What are the one or two areas you think will be making their way into the wealth management industry like permanently going forward? Like what's gonna be happening coming into the industry?

Emily Barbour: I continue to hear a demand for more education and I don't know who has best solved it. I've talked to some different folks. It takes a lot of time and effort to either build your own training program or not. And it goes back to that readiness and engagement needed from the next generation.

But I, I do think education is a big one. I've already said it, but I'm waving the Family Legacy crowd. From what I can tell, it feels like a lot of firms are from a marketing standpoint, we've got it, or maybe they have a person that does it, but I don't know that it's really woven into the DNA, and that's where I feel like we are differentiating ourselves. It's not a separate service offering, but it's part of every client conversation.

R. Adam Smith: Great. That's amazing. Thank you so much, Emily, for today.

I wanna thank you for joining the Family Business Audiocast and also to our audience today. It's really wonderful to have you as a distinguished guest. Thank you so much for coming today, Emily. Emily Barbour: Thank you for having me.

R. Adam Smith: It was great. Today we covered the critical link between wealth and legacy as we were talking, and also thoughtful client engagement. It's great to see your work, aligning people, values, financial strategy and focusing on the multi-generational impact.

And we talked about the longer term relationship with the client. Thank you so much for sharing your journey. Congratulations to you and your family for the continuity of the firm. It's wonderful and I look forward to working with you and talking more about, about it with you in the future.

This is R. Adam Smith, signing off. Please stay tuned for the next episode of the Family Business Audiocast.