Some private banks are finding that it's not enough anymore to merely do a good job managing the assets of their clients.
That's why many banks call on Peter A. White, the president and founder of Washington-based Skye International Associates Inc.
Mr. White's firm helps banks by acting as a nonfinancial consultant to their clients.
In its 10th year, Skye advises a core of about 40 wealthy families on issues arising from what Mr. White calls the "experience of wealth." Often, his work entails resolving family conflicts.
The firm also counsels clients about philanthropy and ethical issues in the uses of wealth.
We recently caught up with Mr. White at the headquarters of Bankers Trust New York Corp., where he can often be found advising some of that bank's affluent clients.
Q.: Why did you start the firm?
WHITE: What I have discovered is that there is a dilemma that grows out of money that takes on emotional, spiritual, and psychological significance - completely outside of the realm of money.
Ten years ago, when I started the firm, the issues around private wealth were highly unexplored. The private wealth area was more focused on service and on what was then known as wealth preservation. There was no global experience. The ideas of asset allocation, of a diversified portfolio, of risk management were quite unexplored.
Now those areas have been fully explored. People generally understand them. The race in private banking now is not so much to set boundaries in terms of how to manage money, but rather how to deal with the experience of wealth.
Q.: What to you mean by "the experience of wealth?"
WHITE: There is this idea that wealth has some influence on people's happiness. Some say that wealth makes you miserable, and most of us act as though it does, given that we spend most of our lives pursuing it.
But I don't subscribe to either school of thought. I think people are unhappy based on how they lead their lives, what kind of parents they have, what kind of people they are, what kinds of values they have, how they take care of themselves, how they have grown up.
Are they people who can love, people who can be loved - regardless of money? To a large extent, the work that I do involves emotionally separating people from their money. It involves helping people see that money is not the root of the problem, nor is it the source of their happiness, but that money is a medium of exchange that needs to be dealt with rationally.
Q.: Do wealthy people have more problems than the rest of us?
WHITE: No, I haven't observed that. They do, however, have some special problems.
They have the problem of isolation . Many wealthy people are taught never to reveal that they have a problem. When your whole life is spent proving to the world that you have no problems, it's difficult to solve your problems.
Q.: Which banks have you spent most of your time helping?
WHITE: Although in the past I've probably worked with 15 private banks and family offices, I'm vastly more engaged with Bankers Trust now than with any other financial institution.
Q.:Tell me about your most recent project?
WHITE: We recently got about 45 of our wealthy clients together and we went up to Portland, Maine, for two weeks to build a Habitat for Humanity house. We cooked our own meals, we ate in a church, we slept in a dorm - and it didn't have a thing to do with money.
It was all about people working with their hands and working together, creating a sense of community. Also, every summer we take a group of about 50 younger people to a ranch in Wyoming for four days.
Some of the time at the institute is spent teaching skills, but most of it is spent creating energy and awareness and interest and enthusiasm for growing up and taking charge of one's life. Assuming greater responsibility.
We create a community within the context of teaming - we create a sense of mutual dependence, openness, and mutual responsibility within the confines of the experience. And experience is by far the greatest teacher.
Q.: What is achieved for your clients who attend your projects or your sessions?
WHITE: Our clients afterwards feel that there is less tension in their relationships, greater ability to communicate, greater understanding of their shared vision of where they're going.
They have a greater moral awareness of how things are done, rather than what is done. I cannot really advise my client on whether to sell his company or not, but I do know a way to reach that decision in a way that makes everybody a winner in the process.
Q.: Is it difficult to deal with someone else's problems?
WHITE: There are times when you deal with someone who's worth $1 billion and you have to take the risk of losing that client, because you're going to tell them the truth, and not what they want to hear.