Today’s world is one of specialization. More complexity, more innovation – it’s extremely difficult to have a sound grasp of the body of knowledge for a sub-segment of a topic, let alone the field to which it belongs. Medicine is a good example: to understand epidemiology or oncology or neurology you have to start from the same place, but it doesn’t take long before the body of knowledge in any one of those domains is all but impossible for any individual to fully grasp. Information technology is similar: consider semiconductors versus network management versus machine learning. Rabbit holes everywhere. And that’s a good thing, as the collective body of human knowledge and understanding continues to grow at a rapid rate. Specialization will inevitably continue.
Now along comes Bluestone. We help business owner families understand and integrate the many aspects of their financial life, from the business itself to risk management to capital allocation to estate planning to philanthropy. How does that work? Doesn’t the family need specialists with deep expertise to advise them on each of those domains?
Yes, the specialists are very important. The estate planning attorney. The CPA for tax planning. The real estate sponsor/broker/investor. And obviously the business specialists (CPA again + valuation experts + management consultants + bankers). Cannot address any of these critical areas without the specialist.
But who ties together all that activity? Who makes sure the right hand knows what the left hand is doing? Who helps the family to understand the broader implications of key decisions in each domain?
Each specialist has outstanding domain expertise, but they may not fully appreciate the family’s bigger picture. Incentives come into play too, as the compensation of each specialist is often a function of the level of activity the family chooses. In real estate, for example, more buying and selling equals more compensation for the specialist. To paraphrase Warren Buffett, just be mindful of whether you’re asking the barber if you need a haircut.
Supporting business owner families across business, real estate, risk management, estate planning, reserves management, investing, etc., isn’t easy. It requires a certain level of experience and knowledge across those domains. It requires an ability to connect the dots and understand how each area relates to the others. It requires emotional intelligence and a willingness to really understand how the family sees the world and what’s important to them. And it requires a clear sense of when the family needs deep expertise – the specialists.
Bluestone’s generalist approach to supporting business owner families borrows from the investing world. Some of the best investors take a generalist approach to investing – realizing that as helpful as it may be to, for example, understand the technical detail of how one artificial intelligence chipset may be superior to another, it’s also critical to see the entire “forest” (avoiding the “forest for the trees” problem) and compare opportunities across different parts of the economy. In the same way, we seek to make sure that activity in one domain doesn’t create risk or mitigate opportunity in another.
Ours is a rare approach to advice that goes against the trend of deep knowledge and specialization. But done well, it’s the glue that binds together disparate areas and creates real value. Getting the big decision right over the life of a business and family, even if just a handful, can prove extremely beneficial.
Specialization is growing. And success for business owner families invites more complexity and more specialist assistance.
Our Personal CFO service addresses that complexity. In a world of specialists, we’re quite happy to be generalists.