As a family wealth counselor, Doug Hostetler sees a common disconnect between the way business owners manage corporate wealth versus the way they manage family wealth.
“They’ve learned to scrutinize corporate expense accounts, but usually it’s enough for them to just see their family’s investment statement balances at the end of the month and then file them away,” Hostetler said. “They don’t spend the same amount of time stewarding their family wealth.”
In the corporate world, stewardship relies on governance, development tools and guiding principles, he observed. Business owners strive to make employees a part of the process by communicating mission statements and organizational values, and involving employees in meetings, training and team-building exercises. That doesn’t happen in typical family life.
Now in its 35th year, Hostetler & Church LLC, of Clarksville, focuses on helping wealthy families achieve better financial outcomes and family harmony in stewarding their wealth.
“We’re a boutique practice, and my focus is on the ultra-high net worth arena in the mid-Atlantic region,” said owner and founder Hostetler. “I spend about a third of my time working with families in Howard County, and the remainder is spent with clients elsewhere.”
The practice is small, consisting of Hostetler, his partner Laurie Church, who retired last year, and two administrative employees. Its clients typically have multiple millions in savings and investments.
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Hostetler’s counseling covers more than just accumulating wealth and enjoying a high standard of living. “[My clients] want to pass on more than money to their families; they also want to pass on their family values,” he said.
To that end, it’s important that families achieve single-mindedness in terms of financial decisions and long-term goals, he explained. It’s important that families create a family mission statement that clearly identifies their values. Also necessary, he said, is a family charitable plan that reflects and supports those values. Since beginning the practice, he noted, his clients have contributed more than $1 billion to charities.
Part of Hostetler’s duty is to assist families with defining their estate plans: how they accumulate, preserve and ultimately distribute wealth.
“We also address asset protection, risk management and insurance issues relating to the preservation of family wealth,” he said. “I’m shocked at the number of wealthy families that haven’t addressed these issues or even have current last will and testament documents.”
Hostetler & Church doesn’t manage money for clients, but rather works to craft an investment policy statement. Starting with an off-site retreat with family patriarchs (or matriarchs, if that’s the case) to discover their background and values, Hostetler & Church helps families navigate a four-step process addressing clarity, creativity, confidence and coordination.
“We bring an organizational development structure to the family and then help them monitor their performance,” Hostetler explained.
Reflecting his company’s emphasis on the charitable side of wealth, Hostetler has set a quiet example by donating his own time and money to the causes he champions, particularly in the area of education.
A graduate of the Leadership Howard County (LHC) Class of 1994, he received LHC’s 2009 Youth Advocate Award for exemplary service to improve the lives and well-being of Howard County’s young people.
“It was his work in helping to start the Bright Minds Foundation that made him worthy of recognition,” said LHC Spokesperson Sue Emerson, referring to the educational foundation that supports the students within the Howard County Public School System.
Throughout his career, Hostetler also has been involved in a range of organizations that benefit the community, including the Town Center Rotary, The Columbia Foundation, the Howard Community College Foundation and Howard County General Hospital. He also served as chair of the Community Finance Committee for the 2004 “Turn on the Lights” campaign that raised $1.4 million to install stadium lights at all Howard County public high school athletic fields.
“It was so powerful to get to know Howard County through Leadership Howard County,” Hostetler said. “It does what it does very well: It merges all the different disciplines and makes the relationships it touches personable and focused on achieving the maximum benefit for the community.”
The LHC experience was so positive, Hostetler said, that it influenced his decision to attend Leadership Maryland as well.
On the wealth counseling side, Hostetler said families often neglect to take into account that they also progress through an evolution of sorts.
“Parents are actively involved in coaching their children until the children reach a certain age, and then gradually shift to counseling,” he said. “When the children leave the nest the parent’s role becomes more of a consultant, and after the children have established their own careers they are finally at the level of colleagues. Wealth planning should take that into consideration as well.”
Currently, Hostetler & Church works with 40 families of wealth and has worked with more than 200 business owners over its 35 years of service.
“The firm has had up to six employees, but we’ve intentionally positioned ourselves to be a boutique firm to continue offering the best level of service that we can,” Hostetler said.