Carole Brown
Head of PNC's Asset Management Group


 Julie Williams, EVP, Head of Advisory Services, PNC Bank

Jennifer Lee, EVP, Head of U.S. Markets, PNC Private Bank

Carly Barton, SVP, Wealth Director, PNC Private Bank

Annamaria Vitelli, EVP, Head of PNC Private Bank Hawthorn


Webcast Transcript:

Operator: Hello, everyone, and welcome to today's webinar in our 14th annual Women in Business Week series, titled Planning For Secession. Before we get started, I'd like to acquaint you with some of the ways you can participate today. The on 24 room you are in allows you to adjust and resize all panels that appear on your screen. To resize any of these panels, click the lower right corner and drag to adjust. To move a panel, click the top title bar and drag it anywhere within the console.

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Now, without further delay, let's begin today's Women in Business Week webinar planning for succession. I would like to introduce you to your moderator for today, and that is Carole Brown, Head of Asset Management Group for the PNC Financial Services Group. Carole, you have the floor.

Carole Brown: Thanks, Ian. Thank you so much for joining us today for what we hope will be an informative and insightful conversation about wealth sustainability, more specifically, about key considerations related to the key phases of earning, accumulating and transitioning wealth.

For those of you who don't know me, my name is Carole Brown and I am head of PNC Asset Management Group. PNC AMG is a relationship-based provider of asset management advice and solutions to individuals, families and institutions. We provide insights, guidance and recommendations to help our clients achieve and maintain their financial goals.

Quite honestly, Women in Business Week is the perfect time to be having a conversation about wealth accumulation and succession. As most of you are likely aware, there's a significant transfer of wealth taking place in the US that spans generations. Today, the baby boomer generation controls more than 50% of the household wealth in the country, and as times move forward, that generation will have a majority population of women. As even more women become financial decision makers within their families or inherit the responsibility for their family wealth, the majority of the trillions of dollars of investable assets in the country will be managed and controlled by women. Yay!

As we know, managing family finances and the financial relationships that go along with that is a responsibility taken on by both men and women. Today, many women are the savvy stewards of their family's wealth. So, today, we celebrate this important role as we talk more specifically about being prepared for the accumulation and subsequent transition of personal wealth and business ownership, and some of the important considerations related to both, which are inextricably tied together.

To take this discussion forward, I am so excited to introduce you to some incredible PNC women who are joining me today, all with incredible experience and expertise, and each with a different perspective and insight to contribute to the conversation. Annamaria Vitelli is the head of PNC private bank, Hawthorne, our premier multifamily office serving families of significant wealth.

Jennifer Lee heads US markets for private bank and provides oversight for local delivery of client experience across the country. Carly Barton is a PNC private bank wealth director with responsibility for leading client relationship and growth strategies, specifically in the Pittsburgh market. And Julie Williams heads advisory services for PNC Bank, where she oversees a suite of advisory businesses that provide advice and solutions to public and private companies and business owners. Ladies, thank you so much for joining me today.

We all know, based on our interaction with clients, that this topic is very timely, and I know that you have a lot to contribute to it. So, let's dive in.

I thought that we would kick off the discussion today by talking about the accumulation and transition of personal wealth. Jennifer, let's start with you. In terms of financial planning and goal setting, what are some key planning considerations for those phases I mentioned earlier? Earning, accumulating and transitioning wealth. What are the processes for setting realistic expectations?

Jennifer Lee: So, those are two really important questions. And I think I'm going to ground our conversation in a couple of key points that, while I don't think they actually change, whether you're in the stage of earning accumulation or transitioning, they're clearly quite different as you're moving through and evolving through these phases of your financial life no differently than you're moving through phases of the rest of your life, or the lives we led when we were 20 look really different than the lives we're leading at 40, 50, and even 60 or older.

We've gained experience, and our lives have in some ways gotten more complex and more complicated. So, I have a couple things that I want us to focus on. The first is to really understand what your own personal priorities are. Not the priorities that somebody else set for you, but to truly understand. My favorite question for every client is what is the money for?

For some of us, it's financial freedom. For others, it's leaving a legacy. For others, it's all of the above, but in maybe in different proportions. So, having that conversation of really understanding what your own priorities are and that changes through time, that's part of the conversation we have with clients.

I would say the second is, regardless of where you are, is understanding your own balance sheet. And balance sheet sometimes is a scary word, but all it means is what do you own? What are your assets and what are the things you owe? What are your liabilities and what does that financial picture look like for you? And for most of us, having a balance sheet in front of us gives us the opportunity to have different conversations about what that long term set of priorities and goals might look like.

My third and fourth ones are actually pretty straightforward. It's know what your legal documents are. We run into clients all the time that have a really good sense of those first two. They know what their priorities are. They know what their assets and liabilities are, but they haven't done the work of making sure that they've got the legal documentation or the foundation around them to support their desired outcomes.

And then, the last one I'll throw in there, is understanding risk management. Regardless of where you are in your life, risk management or insurance in many cases fulfills that need. Is understanding the role it plays, understanding what you have and what you don't have and what you might need. And all of those things are things that a good financial advisor, like a financial advisor at PNC, a private bank, financial advisor at PNC, can talk to you about know what you want to do, understand where you are, understand the foundation you've built around your legal structures, and then, think about how you manage for risk around that.

Those would be the four that I would pick. And as I said, I think those are true no matter whether you're in the very early stages of your financial life or whether you're evolving through different financial stages, and I know my colleague, Carly, is going to spend a little bit of time on how she thinks about that with colleagues as well.

Carole Brown: Yeah, I think those are all good points, Jennifer. And I think, it's really important that, you know, kind of where you want to go and know the foundational information about your own financial situation. So, I think those are great points.

Carly, you know, they always say that life is what happens while you're busy making plans. So, can you talk about how the different life events that you can't really plan for impact the process and how it relates to those phases that Jennifer was just speaking about?

Carly Barton: You know, the point that Jennifer made, I agree entirely. You know, I think knowing where you want to go conceptually, is critical at every stage of life. How to get to where you're headed is something that requires a lot of advice. And I often think these life events, this could be marriage, divorce, the acquisition of a business, the sale of a business, the death of a family member. They are really critical life events, but they give us an opportunity to pause and have a better understanding of what's important for this next chapter. Who are the people that I'm going to rely on for advice in these times?

And I think we think a lot about surrounding ourselves with the right folks for the different seasons of life. But often, these life events create an opportunity for us to kind of revisit what Jennifer laid out so well and make sure that we are certain that we've built the right advisory team for what's next.

And sometimes, these life events are expected and they're something to celebrate. Sometimes, they are met with a lot of emotion that can sometimes make decisions more difficult, making it all the more important that we really have the right folks surrounding us. And I think we as women do a good job and can continue to lean on one another to make sure that we're supporting one another and helping one another find blind spots in those moments of transition.

Carole Brown: And I think what we really don't want is to feel overwhelmed. How, Carly, do you help clients figure out where to start?

Carly Barton: Yeah, it's a great question. I think that, you know, as we talked about earlier in the conversation, there are different seasons of your financial life. There're early years where you're earning and you're kind of in the fog of war, if you will. Just kind of getting the plane off the ground. But as you accumulate wealth and you eventually are looking to sustain it, I really think that, kind of, going back to this refrain around the right team of advisors, is what's most critical in the place to start, is with those around you.

You know, we all have strong personal networks. We have strong professional networks, and we might not have clear direction. But I really think tireless advocacy for ourselves and going out and being brave and bold and asking questions, to advocate for what you want next in your life. We as women have incredible intuition, so, there are often times we meet someone who we know is brilliant but are they a fit for us? Right? Are they the right fit in this season of life for us? Can I be vulnerable with that person? Can I share with them the things that I want to achieve? Can I be vulnerable and say, you know, I don't really understand what you're referring to? Our world, our world of capital markets and investment management and tax planning and estate planning, it is full of language and sometimes we need a translator.

So, I really think finding the right folks to surround yourself, it's a little bit of work on your own part in the early stages to do it but then, it's a matter of revisiting it often, you know, get a team in place. You might have made a mistake. Maybe you chose the wrong one. You can make changes, right? But it's really leaning in and constantly revisiting it.

I often use the analogy to water in a marathon. Where you start is you get some water early on and you make sure you continue to drink and do so often. And I really think that, being kind of bold with our personal finances and being committed to them is the way to start.

Carole Brown: Yeah, that financial discussion or even thinking about finances, getting started in that can be a difficult thing for people. Jennifer, what's your view or how have you helped clients who are stuck, who are holding some things, holding them back? They can't move forward on the progress of getting that financial plan going.

Jennifer Lee: So, I love Carly's analogy of water in a marathon, Carole, because by the time you know you're thirsty in a marathon, it's almost too late for the water. And I would say the same holds true in some ways for financial planning, for financial advice, which is by the time there's something that's really pressing, it actually feels overwhelming to Carly's comments to go find an advisor.

So, I would just keep harping on the refrain that it's really never too early to start. You asked what gets in the way or what keeps people from moving ahead with a plan. I find it's a couple things. One is time. I'm guessing that most of the women on this call took a little break from whatever they do 12, 14, 16 hours a day to listen to us. And so, time is hugely important.

So, as they set aside the time, the second is, I'm going to piggyback on something Carly said around language and translation. You know, I think our industry often speaks in its own language as, by the way, every industry does. And so, if you're not comfortable with the way financial professionals talk to each other or the language isn't familiar, it can feel overwhelming. And so, if I can assure everyone on the phone of one thing today, it's that what we do is important in your life, it's critical that you understand it. But I also know that when you're talking to the right professional, that it's it's translatable. You can help create a plan to get you where you need to be.

And frankly, for all of us in the financial services world, we are all better off when we spend the time to work with clients to make sure they're making deeply educated decisions. And so, I would say those are the two big ones. One is time. The second is like, well, this feels, uncomfortable for me.

And in the vein of uncomfortable, I'm going to add a third one, which is I'm a deep believer after all the years I've done this, that most financial decisions that people are concerned about or don't want to make are really emotional decisions masquerading as financial decisions. And so, we don't sign our wills because we're concerned about who actually would be caring for our children if something were to happen. We don't want to talk about having a will with our spouse because it's a, it can be a friction filled conversation if not done with the guidance of some professionals, or with the guidance of those in your life that can give you that perspective.

So, those would be my big three time, just a sort of an industry or a set of a set of language and set of decisions that maybe you're not so comfortable with, no matter how comfortable you are with your own business decisions. And then, the third one is really getting to the core of is this a just a financial decision I'm uncomfortable with? Or is there some other thing that I probably need to have an honest conversation with myself about in order to keep things moving?

Carole Brown: Yeah, I love that perspective. And I also want to say, while it's never too early to start, don't get stymied if you feel like you're starting too late. There's always the opportunity to work with a great advisor and get a plan in place, no matter what point you are in your own personal journey.

I want to get our other two panelists involved in this conversation, and we know that a bunch of times the personal wealth comes from business ownership. So, let's switch gears and talk to Anna and Julie about that component. I'm going to start with Julie, who through our corporate advisory services, you often help our clients with decisions around how to deploy capital to help them grow and optimize value in the business. What are some common themes that you're seeing in today's market for those business owners, for companies who are specifically focused on optimizing shareholder value?

Julie Williams: So, thank you, Carole. Every company who's growing or whatever stage of the business they're in, understands that deploying your capital is one of the key ways to drive value and optimize value in the business. You only have a few number of choices for what to do with that capital. You invest in the business, you invest in efficiencies, whether that be through technology, through process improvement. You invest in growth, whether that be through acquisitions or organic decisions to grow your business, and all of these investments are characterized by the goal to optimize returns while minimizing risk and to strengthen the competitive advantage of the business.

Another alternative for capital, though, is returning value to the shareholders, returning capital and liquidity to the shareholders. And oftentimes, you know, these are in the form of dividends or share buybacks or facilitating a larger ownership transition event. Sometimes, these activities are in sync and sometimes they might conflict with one another. So, it's really important to have a framework that helps you make these decisions, in a disciplined way.

In the last couple of years, we've seen some significant macro trends that have impacted the focus of capital allocation for businesses as well, as, you know, highlighted the importance of each of the opportunities and what that does for the business in terms of growth optimization and even protecting the company from risk. Those macro events, really, dating back to 2022, included an environment, you know, characterized by high interest rates, making that cost of capital ever so more important, uncertain economic outlook and risk of recession has been a threat. High inflation and an elevated level of geopolitical risk has has really impacted the way that companies think about how to deploy their investments.

What that's done for a lot of companies is it's subdued the M&A market, for one. So, investing in growth through inorganic means has meant there's a little bit more risk associated with that. That's because the cost of borrowing is higher, but also, because with all of the uncertainty out there, buyers and sellers have had a hard time reconciling on valuation. Risk, you know, is a very difficult environment to get your arms around when it comes to what you'll pay for an asset and how much risk that entails. So, these shifting what companies have done in this higher risk environment has shifted their focus to internal initiatives. Initiatives that come with a little bit lower risk but also, drive value and return in the business.

Where that's left us after time is, you know, companies that are now very efficient, strong balance sheets with a lot of liquidity and very poised for growth when the economic environment shifts in the right direction.

For us, indications are already out there that this shift is occurring. We have an economy that's proving extremely resilient. We have investors who are having increasing comfort with the outlook for corporate earnings. And we also have investors who are getting a lot more comfortable with the higher interest rate environment. All of these factors, you know, coming together, then that result is headwinds, of the last two years are becoming tailwinds and M&A is cautiously improving. There's more positive outlook for 2024.

Additional tailwinds would be, you know, there's a lot of capital on the balance sheets of corporations as well as with private equity. So, we should expect to see a lot of capital looking for great opportunities. And this will be good for companies looking to grow. Additionally, you have a lot of buyers and sellers who have been sitting on the sidelines waiting for these better conditions. So, we have ample buyers and sellers, ample capital, and improving economic outlook, all which points to the direction of an improvement and the ability to grow and redeploy capital in a way that's more directed towards growth.

Carole Brown: Thanks, Julie. It sounds like we're moving into a really interesting environment for business leaders, business owners. And I was wondering, Anna, if you could take a different perspective and talk about the opportunities that these individual stakeholders, whether they're the owners, the family members or the leaders of the business, have to do and to consider to optimize their own outcomes.

Like, what should they be thinking about as they're thinking about, you know, growing their company, as they're thinking about optimizing the value of their company, what should they be thinking about, also, from a more personal perspective?

Annamaria Vitelli: Thank you. That's a great question. And as you can hear from what Julie has shared, there's just an explosion of wealth that when we think about it, I like to say that we complement Julie, what Julie does with her, the business owners, and we're really the opposite side of that same coin.

And so, for every business action that is made or decision that is made, I often say that there's an equal and opposite reaction that can be occurring on an individual's balance sheet. So, a few things that I think about in terms of how do you optimize these situations and the environment that we're in? And in my mind, there's really three of them.

The first one is, know your number, right? What is it that you will need to be able to meet your goals, your family's goals? And that will allow you to make better decisions, particularly if you are a business owner that is positioning your business for sale. You want to make sure that the proceeds that come from that sale are, in fact, able to sustain the lifestyle that you have become accustomed to, and also, meet all of those goals that you might have in terms of the legacy that you want to provide for your family. So, that's number one. Know your number. It helps you to make much better decisions, and it really helps you, to fulfill those goals and objectives.

The next one is really, in my mind, the most important one. And the one that we see that is missed most often. And that's leverage the opportunities. And what that means is the way that you can be most impactful is to and optimize and amplify your outcome is to leverage the opportunity that is becoming available to you as a result of a business decision that you're making, or an action that's occurring or a situation that's happening in the business.

So, what does that mean? I think people what we have seen often is that people think very sequentially. So, they're dealing with their business. They are looking at a situation, perhaps they're doing some of the things that Julie is talking about and thinking about how to deploy capital, how to grow the business, how to position it, perhaps for the next generation to take over. And as they're thinking about that business decision, they're not necessarily connecting the dots on how that decision can be amplified on their personal balance sheet.

So, what does that look like? That looks like a business that is growing substantially and is also being positioned for sale and not taking the opportunity to put into place a strategy that today will allow you to capture that growth and move that wealth to that next generation in a very tax efficient manner.

So, it's really helping business owners and executives that are growing businesses to think through that whole continuum and connect the dots on what a business decision could mean for me on my personal balance sheet. If I take the opportunity to leverage those those decisions that are being made.

And then, the final one that I know a lot of people often don't think about, but we find is really important, is know your third act. As you think about being successful, a lot of people think that the end of the game is, I had a really wonderful career and I retired very wealthy, or I sold my business and I have a huge windfall.

But what we've found is that about 70% of business owners, in particular, that sell their business, are actually quite unhappy in the first year, and it's because they have a lack of purpose now, right? Every day they were going in and running a business and found fulfillment in their business, and now, the next day has happened and they're not really sure what to fill that time in with.

So, I would say three things. Know your number, leverage your opportunities, and know what your third act is.

Carole Brown: Most of us are still kind of headway into the optimization of our businesses and capitalizing on the opportunities that you talked about earlier from a macro level. Julie, I wonder if you could tell us about some differentiating practices that companies should be thinking about so that they are optimizing the growth opportunity, optimizing returns for shareholders and stakeholders?

Julie Williams: Thank you. Carole. Great question. So, there were a lot to choose from here. Companies are doing a lot of things to react to the current environment. It's really fun to see, you know, the various ways that that companies are working hard to drive value in what's been, you know, quite a more challenging environment than historically.

So, I thought I would focus on two themes that, you know, while these themes have always existed, they're really given the current environment, amplified in a lot of our clients are really focusing on them to try to fine tune and drive value in the business.

The first theme, which is somewhat of a challenge but also, an opportunity, would be talent. For the last few years, we've seen unprecedented levels of competition for great talent in the marketplace, and companies know that they need that talent in order to effectively drive efficiency, you know, cost efficiency, innovation and all the things that we're talking about to drive value.

So, it's become imperative to businesses today to attract and retain talent at the very same time that it's become increasingly difficult to do so. So, many of our clients are just spending time focusing on what are the ways that we can build a winning culture so that we can recruit and retain top talent? A lot of the ways that, you know, we're circling around are to implement employee engagement, sharing and equity, whether that be directly or equity linked programs that help employees share in the success of the business and motivate them to focus on the very things that are strategically designed to take the business forward along the strategic path.

Interestingly, these programs are going broader than they used to. They're not just limited to top leadership in the business. So, that broad-based engagement is really important. Also, companies who are focused on this are amping up the communication with employees, helping employees see that their activities, their commitment and their dedication is important to the success of the business and that they're rewarded for that.

So, implementing the programs is not enough in and of itself, but really helping employees understand the connection between their efforts, the company's success and therefore, the rewards that they hope to achieve through that. So, talent would be my first bucket, of focus. The second is a much bigger, broader category, but really important, especially, again, given the higher rate environment that we've been living in. And that is developing robust governance and decision frameworks that promote the ability to make successful capital allocation decisions. Again, big broad topic, but just for about just every business, you know, you're making these decisions daily.

The role that we have as corporate advisors gives us a special lens into what companies are doing in this regard. And I think that the comforting observation that I can make here is even the most sophisticated companies out there, you know, they're fine tuning this and they're open to ideas because this is a really complex topic and very dynamic.

So, not to be dissuaded by the process sounding daunting. So, to get the best practices, I would say, you know, in line with what Jennifer was talking about, the first, the most important part of a robust process that keeps you in line with your strategic priorities is to identify and define those goals and priorities clearly. And that means for the business, but also, for all of the stakeholders, including the shareholders.

One way to stay disciplined is to know your priorities and measure all of the alternatives that you're looking at against those priorities, to make sure that you're staying in line. It's also important to use a projection model and to quantify various alternatives. And when you're doing that, making great use of data, data about the subject company, data about the market and your peers, the best way to identify the biggest ways or the most impactful ways to impact shareholder value is to really get to know yourself deeply.

Again, similar to knowing your balance sheet, similar to getting educated, it's very similar in the business. Know a lot about you know who you are, where your opportunities are, and how they align with your priorities. Using a projection model just helps you quantify that, and it helps you stay true and objective and disciplined in the process. When you're doing this, I think it's really important to use multiple metrics. One of the simple mistakes that we see a lot are companies looking at too narrow a set of metrics, for example, ROI, you know, we should be looking at how does an action I take impact shareholder value near and long term? How does it impact risk, financial flexibility, cost of capital? All of these things may not align in your comparison, but they're all important to the ultimate decision.

Building this incorporated at the level of the business is really common, but if you can build these comparisons and show the impacts to multiple constituents like the business, the individual shareholders, the employees, all of the stakeholders in the business, understandably, this is where the process gets complex. Oftentimes, you might need to rely on great advisors or multiple advisors to help you do this, but that complexity is what makes it very, very powerful.

Similar to looking at your own personal information, one of the most powerful pieces of of these models are to educate and to illuminate issues that might not be obvious if you don't do this. What we found is that the the governance that comes out of communicating impacts to shareholders, to employees, to boards of directors, it's quite illuminating and educating, and it has a lot of value in and of itself in addition to helping you come to great conclusions.

I read a quote not that long ago that I liked as it relates to best in class capital allocation. And the quote was, looking at the forest and the trees is a requirement. It requires looking at the detail but never losing sight of the big picture, which is something that we see pretty commonly in mistakes. You know, the mistakes have big consequences here. It's investing in value destroying activities or probably more commonly not taking any action at all. I would say that's the most common consequence of not having a robust framework is not being able to take any action at all because you're stuck.

So, I would say, talent and having great governance and a robust decision-making framework are probably the most important themes we're seeing in today's complex market environment.

Carole Brown: Yeah. And you know, Julie, a lot of people don't know how closely Anna and her team work with your advisory team. And drilling in on kind of the talent points that Julie made, I wonder if you could talk a little bit about, as we have that broad-based engagement as we see business owners, executives and families benefit from the best practices that Julie talked about, from a personal standpoint, what are we talking to them about to prepare for when the circumstances change? Where they're building their wealth outside of the business, or in maintaining their wealth outside of the business, that they've been so successful in building inside of the business.

Annamaria Vitelli: That is a great question, and true to form, just like I started by saying, we really are that opposite side of the same coin. So, the framework that Julie lays out for business decisions and how to put best practices into place, then, really optimizes results, I would say, works beautifully in being able to manage one's personal financial affairs, and in fact, it brings a lot of structure and focus and discipline into something that I think not a lot of us, necessarily have the time for or the desire or sometimes even the understanding of what is needed to get us to where we need to be financially.

So, I would say, as I think about how to optimize your personal situation is really thinking about it in the same way, you know, number one, do you have the right talent around you, advising you? And do each of the people that are around you and on your team understand their role and what they are to advise on? And then, really, if you think about what the optimal situation looks like, you can imagine a financial life can be complicated, right?

A lot of us have an accountant. Some of us have an accountant, an attorney. If you have a business, you have lots of other people that are associated with the business. So, you really want to think about what does the team look like? Who's the advisor? Who's going to coordinate and lead the efforts and and do you have the right people that are not only experts, but also are able to speak to you in the language that is one that really resonates with you?

The next one that really talks about is that framework, which I love, because I think it's really important to not only have a really great team around you, but a team that understands where you are, where you want to go during your lifetime in terms of goals and objectives, what that legacy is going to look like upon your passing, and then, really, provide you with that appropriate advice for all of the different categories.

So, investments, wealth and estate planning, insurance and risk planning, taxes, I mean, all of those things are so important and they should also help you to create that performance measurement standard that would really allow you to understand the level of success that you're having against your goals and objectives. And then, you need to routinely review it. Right?

Carly and Jennifer both said the same things. It's sort of not set and done. You have to review it in a routine fashion and then, measure the progress. Where are you? Have things changed? Right. Things happen. Like Carly talked about it. There could be a death. There could be a divorce. Are we still on the path to success?

And then, finally, the one that I think is often least talked about and could be most impactful in undermining your plan, is that sort of corporate governance but put into the dynamics of a family. So, do you have healthy family systems? And this becomes even more important as wealth is being accumulated and there's a lot more wealth and if there's a business.

So, what does that mean? Do you have good ways of communicating with your partner? Right. Do you have good ways in communicating with your family? Is there a dynamic that allows for decision making and a hearing all of the voices at the table so that decisions can be made for the family in a way that is going to be able to be lived with by lots of people, right?

If you have a wonderful plan and your kids aren't in agreement with you, once you're gone, your plan will probably unravel. So, it's really important to have that transparency of understanding about the wealth and feelings about the wealth earlier on in the relationships, and for business owners, it's even more complicated.

We struggle with a lot of concepts around fairness and equity. What might be fair may not be equitable. You might have family members in the business, other family members not in the business. How do people get brought into the business? And so, there's a lot of those emotional conversations that need to occur, so that you don't undermine your own plan.

And I think Jennifer alluded to this, too. A lot of times people don't do things not because it's not financially sound, and they know that they need to do it from a very logical standpoint, but it's that emotional pain that is keeping them from making those decisions. So, you know, talent framework and family dynamics, family governance. I think those are the three important things to really help with success.

Carole Brown: Yeah. And I think back to what you were talking about earlier about business owners, should know their number, make sure they leverage their opportunities, know what their third act should be. And I wonder, Julie, if you have thoughts on when the right time is for business owners to start thinking about succession planning, and what kinds of things should they take into account?

Julie Williams: Thanks, Carole. I view this question a little bit as a trick question. Because of the way that I feel about business succession, you can probably tell from my comments around capital deployment that I intertwine, as does Anna, and I think the rest of the team I intertwine very, very tightly the actions that businesses take to grow shareholder value with the goals and objectives of the shareholder.

I think that's really important. So, when I think about business succession planning, I don't think about exit and transition as if we're there. I think about all of the things we do along the way to help shareholders achieve their goals, as well as helping the business achieve its goals. They're all very intertwined. So, with that in mind, I think it's fair to say that I believe there're a lot of things that you should be doing early and often now and always.

In other words, yes, you might have a traditional transition, whether that be to family, to employees, to a third party at some point. And as you near that point, you might do very detailed analytics around what that succession might look like. But before that, you're building wealth. You have goals, you may know your number. And we want to be helping the business grow to get to that and achieve that number for yourself and for the family. But there's also planning opportunities along the way, which I consider to be important to business succession.

So, unfair response, perhaps, to your question, but I think, early, often, maybe now or already, you know, whether you do this well or not. And circumstances change too. So, you might always want to be revisiting this, but there is no harm in understanding where are your goals and how is what we're doing with the business going to help you achieve those goals? And am I prepared in placing the right plan in place to help me accomplish, you know, what I'm trying to accomplish for the business as well as for the family?

Carole Brown: So, that response in this whole conversation leads me to this next question. And we're doing this for Women in Business Week. But really, Anna, Julie, generally speaking, could we be doing this with any audience? Could we? Are these issues that are specific to female business owners? Do you see any difference in whether or not you would be having a different conversation if you were talking to male business owners?

Annamaria Vitelli: Yeah. You know, that's a great question, Julie, if you don't mind. You know, I'll start and then, you can clean me up or add your thoughts here. I would say as a business owner, the concepts are not different, right. You're running a business. You've got industry indications that you need to understand. You've got all sorts of decisions that need to be made about your talent, about, you know, your capital. So, I don't think that as a business owner there is a lot of differences.

But I will say that on the personal side, a few things that I often think about when I'm advising a woman is that there are a few things that we need to just keep in the back of our minds that we would have to build into the plan to make sure that we get success. And so, a few of those things are, you know, women tend to live longer. And so, the kinds of investments and the kinds of planning that may be needed are perhaps just a little bit different than their male counterpart.

The other thing is that there may be a little bit of a lag or a time, a gap in your time in working or accumulating wealth. Right? So, a lot of times, women do take on responsibilities that take them away from work. Or maybe they started their business a little later because they first had their children, raised their children, and then, started a business. So, there's those time differences and different situations that you would want to account for when doing the personal planning that I think would be just a little bit different.

But as a business owner, I don't think that there's a lot of different decision making that would happen.

Julie Williams: Yeah, I'll echo that. Thank you, Anna, for that because I agree. I think from the business perspective we'll run, you know, the same playbook. Again, I'm a believer in intertwining and understanding the stakeholder impacts of everything that we do. And that stakeholder might be a woman, but the business discipline and the robust frameworks would not, in my opinion, be different with women ownership.

Carole Brown: So, this conversation has been around the importance of whether we're talking from the business or the personal perspective. This whole conversation has been around the importance of planning, of preparation, and how that drives success, whether we're talking about success of the business or the success of the sustainable wealth for our families.

And I was wondering, Jennifer, bringing you back into the conversations, how should our people be thinking about the advisors that they have around them and their team and helping them deal with these really, kind of, heady and complex issues?

Jennifer Lee: Yeah. So, I have an interesting way. Personally, I have an interesting way of thinking about this. I often talk to our advisors who are in our various markets, talking with all of our clients, and I ask them to think about themselves in the same way that clients' personal physician might think of themselves. So, first of all, there are two or three big components of that relationship.

The first is trust, right? There has to be an opportunity to build trust with your advisor. And a lot of that is based on listening and then competence. Right. So, when I go to, I have a fantastic physician, and when I go to him, he does two things. One, he asks a lot of questions. So, if the advisor you're engaging with isn't asking you the questions but is instead telling you about all the ways they do things, you might not be in the initial stages of that trusting relationship.

The second thing he does is he surrounds himself with a web of super competent people, to the point that when he says, I think you need to go see X, Y, or Z about whatever we've just talked about, you know, I don't spend a lot of time on the web researching whether or not that's the right person. I deeply trust the relationship that I've built with my physician over time. And so, I think about a really great advisor, whether it's for your business, whether it's for you personally as playing that sort of general physician role, their job is to really understand the big picture.

It's to ask a lot of really important questions. It's to understand who you are as an individual. It's to make sure that your vital signs are all in check, but it's also to then recommend the right plan of action that's going to help you achieve those goals that we think of as financial well-being.

But I think you can think of, in that same context, the other side of that, Carole, I will say, is that occasionally, my doctor talks to me about things that I really sit there and I'm like, I think I understood about every third word of what he just said. But because I have such a trusting relationship with him, I can say I understood every third word. I want to be making really good decisions about myself and for myself and for the betterment of me as I'm an employee of this fantastic company, as I'm the parent and a spouse and a daughter and all the other roles that women so often play, I want to make sure I'm understanding that so I can make good decisions.

And so, I would just encourage you, one, to think about building that trusting relationship. And Carole, as you said, it's never too late and it's never too early, but also, making sure you're really working with people that you're confident about their competence and that their job is to help you be confident about your competence in making these decisions. And that's the nature of that trusting relationship.

Carole Brown: So, let's build on that response. Carly, I know that you and your team work really hard with our clients to make sure that they have the right team around them. And with that right expertise and specialization. Can you talk a little bit about the framework that you use, and how you kind of approach that real life?

Carly Barton: Thanks, Carole. Referring back to something we talked about earlier in the conversation, life events happen, and we are reminded that to Jennifer's point, our role as advisors is to ask the right questions and bring to bear the right advice to help our clients make informed decisions for the season of life that they're in, for the current objectives that they have. But it's also to challenge them to make sure that we're revisiting those objectives, right?

These life events, the liquidity event that we've been talking about, the sale of a business interest, how does your strategy change? How does it stay the same? How have the goals changed? As Anna said, what's the third act look like? Have we prepared for that? Have we painted the picture from experience with other owners of what's about to come their way and helping them make the decisions?

Are you with the right advisory team? Oftentimes, we see with business owners in particular, there's a certain loyalty to those organizations that gave them their first line of credit, that wrote their first articles of incorporation, that helped them draft a will 27 years ago. And those advisors are critically important to the strength and the creation of their business. But in this new season of life, they may need to bring in some folks as that strategy changes.

And so, we help them revisit their advisors, are they advising clients like you? Right. How many clients in their book have five, ten, $20 million? Do they look like you? How many of them? How often do they meet with them? One question we ask is, how often are your advisors getting together in a room and collaborating on your behalf so that your lawyer talks to your accountant, talks to your investment manager, right? Talks to your business valuation expert, talks to your investment bank.

We believe that if we kind of go off of that theme, that kind of refrain of, we're helping put you in the position to make informed decisions, then, all of those advisors are critically important. And shouldn't they come together to collaborate so that you're not the middleman telling your accountant what your lawyer or your investment manager said?

And so, the framework that we use is really revisiting strategy, revisiting what the season of life is, and helping clients make informed decisions about the people who have the seat at the table, to give them advice for, you know, this next chapter. And we think it's really critically important to the success and longevity of the next act, whatever that act may be.

Carole Brown: Thanks, Carly. Look, I know that we're getting up close to time, and I wanted to make sure we have some time for some questions, but I think it's really helpful to think about the linkage of the professional and the business with the linkage of the personal as we plan for succession. And I loved, Julie, your point that, you know, as you're driving growth, as you're driving success in your company, you've started the plan for the business transition. I was wondering if that guidance, or there was a question here about whether that guidance would be the same for an S Corp business in terms of succession?

Julie Williams: Yeah. You know, I mean, we look at all types of companies, and sometimes, we look at choice of entity and whether or not that's the appropriate choice of entity. As you're thinking about, sometimes, the choice of entity can have an impact on an analysis relating to distributions and liquidity and ultimately, to ownership transition. No question about it.

A few come to mind, you know, tax related considerations. I don't think, though, when you look at the big picture and you think about all of the planning needs that you need to consider and check in on and make sure that you're revisiting with frequency so that, you know, you're building toward the success against your goals and your family's goals. I don't think that would change in my mind when you think about an S Corp entity versus another form of entity.

Carole Brown: Okay, great. So, there's another question here. It says, what advice would you have for someone who's not looking to sell their business in the near term, but kind of later, say, five years from now?

Julie Williams: You know, I'll start this and maybe Anna has some comments to follow, but I think, you know, the longest period of exploration when it comes to transition of ownership happens when you're getting educated on the alternatives as well as when you're formulating and really fine tuning what your own objectives are.

I think the framework for leading up to a transition event has a lot of resemblance to the framework we laid out about capital deployment. It's define your objectives. Know what's important to you. Use those objectives as you think about the alternatives to align and see which alternatives most meet your objectives.

I think there's a thought that maybe maximizing value is a primary objective for everyone. It's not. We spend a lot of time with business owners whose objectives are about community, employees, legacy, and so, learning about the various options that help you achieve those goals is illuminating. And I think a lot of owners don't realize how much is available to them, how many resources are available, and how much you can learn in the process that surprises you.

I think one of the most rewarding parts of doing alternative analysis with clients over time is that illumination, is that realization that there is likely alternatives that meet your objectives that maybe you hadn't considered or had thought about a different way.

So, I think, in five years, it's a great amount of time to get organized around objectives of all of the stakeholders, from family to other shareholders to employees. Get organized. Lay out your objectives clearly. And that way, again, you can stay true and stay disciplined around how you go about evaluating the alternatives and whether or not they achieve those objectives.

Carole Brown: Anna or Jennifer or Carly, anything you want to add?

Annamaria Vitelli: I'd love to jump in here because I will tell you that that is the absolute perfect time for us to be really maximizing your personal balance sheet and thinking about what that transition is going to be looking like for you, in five years. So, in planning, if you are able to plan in advance of a transition, you can really minimize the income tax that is going to be occurring as a result of the sale. You can also minimize those transfer taxes that will likely apply to that second and third generation.

It also allows you to put some structures in place today that will allow you to capture growth, that can completely bypass your personal balance sheet and go to the creation of your legacy for that next generation. So, I would say that it's always better to be planning about your, planning your personal wealth in advance of your sale.

A lot of times, I joke with clients who come to us and say, you know, we're about to sell the business, transaction closes at the end of the year. And I say, you know, it's a pencil, not a wand. If you come to me with a pile of cash, it's very hard for me to help you minimize the taxation outcomes for you. But if you come to me ahead of time, a few years ahead of time, there are so many things that we can do to really minimize the impact of some of those tax issues that you're going to have. So, great question.

Carole Brown: Well, it looks like our time is up. I want to thank our panel for a fantastic discussion today on the importance of planning, whether you're talking about planning for the growth of your business or planning for the accumulation and sustainability of wealth for you and your family. And I also would like to remind people that it's never too early. It's never too late. But it's really important that you are the right team of advisors and specialists and experts around you to help you work through these important decisions.

I also want to thank all of you who tuned in to what is the last of the webcasts that PNC is hosting for Women and Business Week. I hope you found it as informative and interesting as I did. If you'd like to learn more about PNC support for financial decision makers, please visit Replays for this week's Women in Business Week sessions will also be available there. Thanks again for attending and I hope you have a great rest of your day.