This month Jay sits down with Jeff Savlov, Founder, Blum & Savlov, LLP. The pair discuss Jeff's work in family business and wealth consulting, how he came to this role from personal experience, Metallica, and bread pudding. Read it all below!
JAY: This month, we stray from life insurance a little bit to speak with Jeff Savlov, a national expert on family dynamics and governance work in the family business and wealth consulting space. I say, “a little bit” because the work you perform, Jeff, may lead to either new opportunities for life insurance or the evaluation and re-positioning of existing policies.
Also, on your website, I noticed you were going to be speaking at a conference for a major life insurance producer group and I became fascinated in the different ways you help with family governance and with the decision-making process involving any number of family dynamics.
In the life insurance world, producers are often walking into family situations either too early or too late to be effective and I suspect hearing about your practice will provide some insight into working with affluent families. Tell me about your firm and what you do.
JEFF: Thank you asking me to contribute to the Tier One Interview Series, Jay. In my role, I work with families who have accumulated significant wealth and support them in ensuring that the wealth serves current and future generations in healthy and productive ways. We work with family businesses when the founders are thinking about including the next generation and want to be thoughtful and intentional to try and avoid common family business and family wealth pitfalls.
Often, I am brought in when there is conflict between family members, I work to calm things down and help them communicate and find a path forward. Families with legacy wealth, which is inherited wealth that may not have an operating business and is often based on a successful business which might have been sold long ago, have similar issues to families. When a family shares ownership and management of complex assets like real estate, investments trusts, maybe a foundation, they need to develop leadership and have good communication and come together as a team. And creating a common vision for what they are trying to accomplish is essential. I help with all that.
JAY: You have an incredibly relevant personal story when it comes to family dynamics and a family business. Fill me in on your upbringing and your career path because, to me, it sounds like your education and early work add a lot of value to your current role.
JEFF: I grew up in a family business. In middle school my dad, a blue-collar union guy in the world of lithography, took a home equity loan and whatever he and mom saved and started his own lithography business in New York City. It was a scary time, and I remember mom and dad were really stressed. I went on weekends in middle-school and more in high school. During college, I had to decide if I wanted to enter the family business.
At the same time, the business had really grown, and dad was over his head in terms of leading and managing an organization. He really had a blue-collar mentality and had no experience in management. He got very stressed out and who did he take it out on? You guessed it – me. It became incredibly tense.
My mom, the wise matriarch of the family, found a psychologist who specialized in working with parents and kids in business together. This was transformational. Not just for me and my dad, but for the whole family. Mom and my two sisters did not spend time in the business. They were not interested and/or thought it would be too stressful – imagine that! I decided if I wanted to have a relationship with my father, it would most likely happen NOT working together. Also, I was not all that crazy about lithography – a great reason to not join the family enterprise.
I went into the corporate world of marketing - consumer products and technology - and had a good run at a young age. And the experience we had with the psychologist who helped us kept calling me. I went back to graduate school and studied family and group dynamics and facilitation, became trained as a family therapist, did an additional 7 years of post-grad work and became a certified psychoanalyst. I started a private practice doing talk therapy and by coincidence, several of my early patients had family businesses and/or family wealth. I saw the stresses and strains on families when making decisions about shared wealth, who would be allowed to work in the business, who would get ownership, how to be fair to kids who had no interest in it, communicating with children about the business and wealth and how it might affect their lives.
JAY: Maybe it is my life insurance industry background, but I often assume that a very wealthy family has an existing operating company somewhere in the mix. That isn’t necessarily the case, is it? Can you broadly describe the types of families where you tend to add the most value and what you are usually trying to accomplish?
JEFF: There are three main areas.
Families with operating businesses when things are going well. I can help them to understand the complex interplay of family and business, specific to them, so they increase the odds of avoiding the pitfalls we commonly see. When there is already conflict….and some conflict in families is always normal, I can help them learn to manage it better.
Next, I encounter legacy wealth families who need to work together and develop a cohesive and high-functioning family team. As with operating business families, these families bring me in when things are going well to keep it that way and also when conflict is brewing – or blazing!
Finally, based on my training as a child therapist and having worked with children in play therapy when they were as young as 3 years old, I have expertise in child development and parenting. Many of the painful situations I have seen in enterprising families along the way were a function of missed opportunities during the early years of childhood to teach kids about responsibility, accountability, teamwork, expectations, selflessness and more. I developed the Purposeful Legacy Family Project and I coach couples in the context of wealth on how to get on the same page around parenting in the context of family financial success. I also work with couples whose kids are under 5 years old, often when they are one or two. There are very simple things parents can do to instill values and character in kids this young.
JAY: When it comes to wealthy families expanding through marriage, one potential minefield that has always interested me is the use of prenuptial agreements. In your experience, does this subject come up often?
JEFF: In the field of planning for wealthy families, pre-nups are often thought to be the absolute way to go. The focus is often on “educating” families about the need to go in this direction and professionals often focus among themselves on the best way for a family client to communicate about this to someone marrying into the family. Truth is, there are a number of families who believe marriage is a forever commitment and a pre-nup takes away from this deep commitment by looking deeply at what happens IF the marriage does not work out rather than focusing on how to get through tough spots.
I do not have numbers of percentages of wealthy families who prefer not to have a pre-nup but I have open discussions with family clients and do not push pre-conceived ideas about these agreements, and I find there are families who will be open about their distaste for them and choose to avoid them or admit they felt pushed into them by a professional who made them feel foolish for not going that direction.
JAY: Let me zero in on the subject of families communicating about wealth either between, or across, generations. Most families have fears about telling children about the family wealth and you have a way of thinking about it that eases their fears and opens them up to this communication even with very young children. Can you say more about this?
JEFF: You can talk about family financial success without mentioning money and you can talk about money without giving numbers. Stories about the family’s history are a great way to talk about where the wealth came from, who created it and how hard they worked without getting into the money aspect. The stories impart values.
For example, “Grandma and her sister started baking from home in high school. Their cookies were so delicious, everyone in the neighborhood wanted to buy them. They worked very hard to keep up their grades – their parents required it, or the business would have to end. Education has always been a big priority in our family. They also needed to hire workers to help them as they grew, and they were very generous as a way to express appreciation for how they could not have grown without committed workers. Even to this day, with a much larger baking company than they started, we treat our works generously.”
As for talking about money without mentioning numbers, “The baking business has grown a lot and we have many, many workers. The money from the business allows many of our family members, your aunts and uncles and cousins to receive money each year for their ownership. Our family has always valued using some of the money we make to help others. Dad and I give money to the local cancer hospital each year. And we believe giving money is not enough, we volunteer each month to read books to young kids sick in the hospital. Would you like to come with us next time we go? Or maybe there is a problem in the world you’d like to try and fix, and we can look into how to donate and help in person?”
JAY: Jeff, you have a very positive view of the life insurance industry and planners with integrity who use it creatively. Particularly for someone not directly involved in the industry yourself. Can you say more?
JEFF: “Integrity” and “Creatively” MUST go together. When they do, it is a home run time and again. Sophisticated planners who are willing to listen deeply to what a family is trying to accomplish, and work collaboratively with me in that regard, are a pleasure to work with. From minimizing taxes around a succession or estate plan to trying to be fair to the child who does not work in or own part of the family business, and whose parents do not want them penalized for following their own path, life insurance solutions are often a great fit. “Life insurance” has gotten a bad rap over the years, mainly due to unethical characters who are not the norm in my experience. It takes a special skill set to be able to understand the family’s goals on a deep level and then translate some pretty complex products into language the average non-professional can understand – and patience too. These things can be pretty confusing.
JAY: You told me about your love of speaking to groups about the field of family business and wealth and how it allows you to bring your love of teaching and your creativity together. Can you give an example?
JEFF: Speaking to families and professionals in this space is a favorite aspect of the world I am in. A great example of my desire to combine education with creative entertainment is my most popular talk: “Sex, Drugs & Rock ‘N Roll: Family Business/Wealth Lessons from Metallica”.
A few years back I was watching a Metallica documentary, “Some Kind of Monster”. It looks at a tough time the band had, and they hired a consultant with a background similar to mine and the whole drama was caught on film. While the family is not blood related, they are very much a family and I use about 10 different short clips from the film to demonstrate a variety of dynamics and issues enterprising families face and it opens up great discussion among families and professionals alike. The feedback I get consistently is high marks for education and for fun entertainment.
JAY: You mentioned an upcoming dual business and personal trip on which you plan to take your 24-year-old son to, among other sites, the Grand Canyon. When you are not helping your clients, what do you like to do in your free time with either your family or on your own?
JEFF: I love family time with my wife and two sons, 24 and 21. The trip to which you refer is an upcoming speaking engagement in Las Vegas and my 24-year-old took off work to come along with me and we will drive to the Grand Canyon and another park or two. Also, now that our sons are older and independent, my wife and I are traveling much more.
A recent trip to St. Lucia was amazing. So many islands in the Caribbean are flat and sandy or rocky. St. Lucia is a mountainous rain forest. We visited hot volcanic springs which had two types of mud, light and dark, and body painting each other was a blast! We also climbed one of the pitons which was quite challenging, and we were sore for days. Luckily, we recovered on the beach.
Here is a blog I wrote about family business using experiences from our St. Lucia trip. Also, humor is highly valued in my family – going back generations. I love nothing more than sitting around and making each other crack up laughing for hours. My wife and I have always been active, and both of our boys have made health and fitness part of their lives so many family activities involve being active outdoors.
When Covid hit, my gym closed for a few months and then, in June of 2020, opened only the outdoor lap pool. There was a masters swim class offered to those 18 and older with a coach so I went for it. I loved it more than I could have imagined. There is camaraderie and the technical aspects of swimming properly are a real challenge which I love. Having seen the movie Jaws when I was 10 years old, I always loved the beach but never ventured far past the waves for fear of sharks.
Last summer, 2022, several of my masters teammates supported me to do an ocean swim and I swam a mile and much of it far past the waves – I was hooked. A month or two later, I did my first ocean mile race. I did not care about my time but just wanted to finish it without stopping.
JAY: Jeff, thank you for all the time you put into this interview. I will admit to having learned more about a life insurance-adjacent role this month than in any other interview I have done. Before you respond to the restaurant question, I want to encourage our readers who are in need of your services or might be able to refer you to a family “in need”, to reach out to you.
Now, without naming a steakhouse or a steak dish, tell me about a few restaurants I absolutely have to visit and what I should order when I’m there.
JEFF: 29 years ago, in an effort to control my cholesterol without meds, I started eating less and less animal products. The Planted Plate in Princeton, NJ, is a casual and creative vegan restaurant I love. “The Philly” is a plant-based cheesesteak which helps me mourn the loss of the cheeseteaks I used to get at Daffy’s Deli in Newark Delaware back in the early 80’s at the U of D!
I am an avid lover of bread pudding – when done well, it is so yummy. The Mirbeau Inn and Spa in Rhinebeck, NY, did a chocolate version when I was last there that is worth the trip from anywhere for a bread pudding lover! I am a lifelong NY Rangers fan and my masseur at the Mirbeau spa had recently served Chris Kreider of the Rangers. Somehow, that only added to the bread pudding experience!
Since its inception, Life Insurance Strategies Group has solely focused on the individual high net worth life insurance market. We do not sell products. This allows us to offer unbiased, pragmatic advice. Visit us at www.lifeinsurancestrategiesgroup.com.