The CPA Desk

A Thought Leader Production by PKFTexas

Crystal & Company Looks to a Bright Future Through Client Care and Relationship Building

Russ:  This is PKF Texas Entrepreneur’s Playbook, I’m Russ Capper, this week’s guest host and I’m here at the Gulf Coast Regional Family Forum and my guest is Jonathan Crystal with Crystal & Company; Jonathan, welcome to the Playbook.

Jonathan:  Thank you, Russ, for having me, I appreciate it.

Russ:  You bet.  So interesting conference going on here, I got to watch you up on the stage conduct a real cool panel I might add.

Jonathan:  Thank you.

Russ:  but I felt like you probably could have been on the panel as well as moderating it.  So tell me about Crystal & Company.

Jonathan:  So Crystal & Company is a national insurance brokerage firm, it was founded by my grandfather Frank in 1933 so we’re about to celebrate our 85th year – and we don’t celebrate anniversaries until we actually complete the year.

Russ:  That’s good.

Jonathan:  We are as I said a national firm, we’re headquartered in New York with 11 offices across the country including here in Houston.  I have the great pleasure of working not just with my father and my two brothers, but about 450 colleagues across the country and we serve and advise a wide variety of financial institutions, nonprofit organizations and corporations and addressing the kind of full needs of their full scope of their insurance needs.

Russ:  And that might also include family-owned businesses.

Jonathan:  We’ve built quite an expertise and specialty in working with families in business together.  Part of our business is advising families and protecting themselves and their personal assets and the greatest portion of our business is addressing the corporate needs, but when you put the two together you’ve got an interesting opportunity to think more holistically about risk and what you can do to protect not just the family itself but all of their assets and think about what it takes to perpetuate that strength and resilience of the family over time.

Russ:  So let me make sure I’ve got this right, so you do obviously family owned businesses, their businesses, their personal at work too, but you also do just commercial businesses right?

Jonathan:  Absolutely, absolutely.

Russ:  So is there – do you have different people who call on just commercial people than family or do you overlap?  Because there’s a difference isn’t there?

Jonathan:  It’s a little bit more in terms of temperament and thinking about style.  We also work with a lot of financial sponsors, private equity firms, and sometimes the difference is really one in terms of time horizon.  If you’re a private equity firm and you’re looking about 3, 5 years out how do we validate our investment thesis; make sure we have a successful exit?  Well, then you’re thinking about risk in a very specific way.  What are the things that could actually impact or really realize your investment on the exit side?

When working with families the time horizon might be a little bit different.  You might have other considerations in mind in terms of thinking about the reputation and the name brand associated with the business.  You’re also thinking about how do you help those families succeed over time if they’re entering into a new geography?  Maybe they’re divesting a business or maybe they’re investing in new business and  if you really care about the families that are in business really understand what makes them tick and where they’re values are you can sort of think ahead and start to ask questions

Like I see you’re thinking about making investments here, we’re talking to you, have you thought about these other risks that might come into play?  Me as a third generation family member myself and getting to work with my brothers and my dad, I’m just fascinated by the dynamics of families and getting to see Founders and incredible entrepreneurs and them grappling with these questions of how to perpetuate their wealth and their expertise to the next generation.  Seeing sons and daughters, cousins and aunts and uncles all trying to work together and collaborate for the success of the family and maybe sometimes not so carefully collaborate.

Russ:  Right, real interesting.  You sound though like you really like what you do too though.

Jonathan:  I do.  It’s something particularly special and gratifying to be part of really building on a legacy.  I’m very fortunate to have my grandfather start the company, my dad really builds it and take it where it is today and I just look out ahead and see such tremendous opportunity for our business and for our colleagues.  I’m very fortunate to work among some of the most talented professionals in our industry and look, we’re in the risk business and I think we’re in a risky world.  We’ve got technological change going on, we’ve got all sorts of other factors that affect every single business and if we can be a partner to them and help guide them, advise them through kind of navigating these tricky, rocky waters then I think we can sustain what’s been the bedrock of our business which is relationships and the relationships with the owners and the executives of the companies we work with.

Russ:  It’s interesting to me that you brought up the risk taking place these days.  Of course insurance company but I mean even the geopolitical risk these days is extremely high.  The technology thing, the disruption that’s happening too, it’s getting harder it seems to me to predict the future.

Jonathan:  Well I’m not sure it’s ever easy to predict the future but I think that we do live in a world where there’s so many different moving pieces and understanding how they play into one another – if you’re running a business you’re very focused on taking care of your clients, understanding where you can take it.  And the insurance world is about the very, very unlikely things that could throw everything out of whack and so if we can give a little comfort to our clients in saying hey, have you thought about if you’re in the product business what your supply chain looks like and how a disruption in your supply chain may affect your overall business.  Or hey, you’re an investor and you’ve set up all these different entities and legal structures to be able to make investments, how might there be a liability associated with all those investments?  And really kind of just help your clients not just think about the things that they know but anticipate the things they may not be thinking about.

Russ:  It’s interesting you’re also the third generation where everything I know about family business is the third generation is supposed to be where the greatest fallout happens I think and so did you know that when you showed up?

Jonathan:  Well I think when I walked in the door someone reminded me or familiarized me with the phrase shirtsleeves to shirtsleeves in 3 generations and I asked them is that destiny or is that a prediction?  I’m not sure I like either one but at least I can prove the prediction wrong.  The reality is that is very, very difficult for families to be successful over generations and there’s a lot of statistics that bear that out and so I’ve framed that a little bit into how we think about our business, how we can make it resilient, how we can succeed and perpetuate our values over time of both unifying our own family.

And then also thinking about from a risk standpoint what are the reasons these families aren’t successful over time and the themes are pretty common; you might find them in the bible, you might find them in Shakespeare.  They’re kind of all out there and if we can bring some of that expertise to bear and say hey, let’s help you and take some of the experience we’ve learned – and we’ve certainly made our own mistakes along the way – and incorporate our own advice to our clients.

Russ:  I’m curious about the spectrum of your clients and customers from finance to nonprofits to family businesses; certainly it wasn’t like that when your grandfather started it was it?

Jonathan:  Absolutely not.  My grandfather started as an insurance agent in Wall Street in the 1930s and was one among hundreds, but I think there’s always been a continuity which was working with smart business owners and executives and helping them solve their business problems and that understanding that when you’re side by side with your clients helping them solve their problems coming up with a creative solution you’re not going to be just there as their insurance broker, but you’re going to be there as their partner for the long term.

Russ:  Well Jonathan really it’s a cool story; I really appreciate you sharing it with us.

Jonathan:  Thank you so much, Russ, it’s been a pleasure.

Russ:  You bet.  And that wraps up my discussion with Jonathan Crystal.  And this has been another Thought Leader Production brought to you by PKF Texas The Entrepreneur’s Playbook.