For years, there was no independent guide for wealthy families on how to set about choosing and vetting family advisors. Even knowing what sort of questions to ask can pose problems. We talk to Dr Jim Grubman, a consultant and senior figure at the UHNW Institute in the US, on the work he's done to carve out a path.

We can probably all remember how nervous we felt in our first serious job interview. For wealthy families, the process of vetting advisors they would like to work with can also be intimidating â€“ it's a task with no instruction manual. 

But help is at hand from Dr Jim Grubman (pictured), an internationally recognized consultant to families of wealth, a published author (Wealth 3.0 and others), and chair of the content and curriculum committee in the nonprofit think tank, the UHNW Institute. 

A recent experience brought home to him how families need guidance on choosing a family consultant.

“I [previously] had no idea that there was a gap in the field,” Dr Grubman told Family Wealth Report in a recent call.

Dr Grubman said that, as he’s been reducing the amount of direct work he is doing with families, one of his current client families reached out to him, frustrated at not knowing what sort of questions to ask potential replacement family consultants. “They needed guidance,” he said.

“I told them I would get them some resources to help. Then I discovered I couldn’t find anything in the literature,” he said. 

To some degree, filling such a void is why the UHNW Institute – with which FWR is exclusive media partner – exists. 

“We need to have a lot more resources to help families and to do so in an objective, unbiased way,” he said.

Dr Grubman has now written a detailed white paper entitled Tips On Choosing A Family Consultant. It touches on three crucial points: Understanding that there is a difference between a family wealth consultant and a family business consultant (most of the focus now is on the business side); a needs assessment before making any search for a consultant; and a discussion by families of priorities for the engagement. The remainder outlines practical elements of the hiring process.

Finding and assessing consultants comes at a time when important parts of the wealth management ecosystem remain unregulated and ill-defined. Now, for example, there are no widely accepted industry credentials for family consultants, Dr Grubman said. Families cannot rely on people having standard credentials to evaluate quality. Families must do their own assessment, he said.

Behavioral Interviewing and other tips
Since interviews are crucial when hiring for any position, Dr Grubman talked about the power of the “behavioral interview” – getting a candidate to demonstrate actual behaviors and actions to illustrate how they would tackle a problem. Lots of consultants can look good on paper or in generalities, but can they really “walk the walk?” For example, a candidate should be asked how they helped manage an intra-family conflict and what lessons they learned.

Interviewing “is reciprocal, too – the consultant is also evaluating the family. The family must be open about there being different views and disagreements and whether there are a lot of red flags,” he said.

A paradox of the environment is that the best consultants tend to be the hardest to recruit because they are so busy, Dr Grubman said.

As a decision point about a candidate’s suitability is approached, their price point can be addressed, he said. “Going for the highest or lowest charging consultant may not be the best approach.” As he added, “price and competence are only moderately correlated.”

Tips On Choosing A Family Consultant is yet another tool that Dr Grubman and the UHNW Institute are developing to help bring some clarity and professionalization to the industry. Dr Grubman said that they will continue to fill gaps in resources and education wherever they may find opportunities.