A purposeful approach for maintaining and growing wealth brings together two of the most emotional subjects in the world: family and money. It’s no wonder only 4% of families regularly hold meetings to discuss wealth matters.1

How families will discuss and implement the strategies that are right for them will vary greatly; intergenerational wealth-planning roadmaps are highly personal. The combination of transferring wealth to the younger generation and teaching issues of money management can raise numerous questions.

By asking the right questions and listening carefully, financial advisors can help families engage in strategic planning and begin to create long-term objectives to their wealth. When family members understand the role of wealth in their lives and discuss money matters openly, they are in a better position to map out and achieve their vision.

Many families spend a great deal of time preparing the money for the family, but very little time preparing the family for the money

Source: State Street Global Advisors’ survey, “Money in Motion,” June 2015. Q: How much is wealth planning discussed within your family?

Money alone does not create ties that bind

Talking about money can be difficult. The way individuals and families perceive their wealth has profound impact on how money is valued and used. Yet, for many families, money remains a taboo topic. However, without communication, misunderstandings can easily occur.

Proactively engaging spouses, children and grandchildren in conversations about key family wealth issues and involving them in the process of wealth management are fundamental components of protecting the long-term financial health of a family. An advisor’s experience and leadership can help establish a plan, integrate education on the topics of wealth transition and prepare heirs to receive and prudently manage assets.

Shared values: A purposeful approach
Encourage clients to think about the long-term goals they have for themselves and their family. When a family works together as a team, they are better positioned for success. Opening up a dialogue about financial and social responsibility is a crucial first step.

Financial maturity: Where is everyone at?
Start early, begin with topics that are general, and ask to bring family members into the discussion to foster inclusion; help the family build a foundation of wealth stewardship. An incremental approach allows for time to process options and improves outcomes.

Money dates: Setting aside time to talk
Use checklists and introduce shorter-term goals with targeted completion dates to help clients feel organized and in-the-know at the same time. Thoughtful communication can help widen frames of perception, which can lead to new and collaborative alternatives.

Charting a purposeful path on their terms

As you educate families on the purpose and meaning of intergenerational planning, you will see the concept of how they define their legacy take on a practical perspective. For example, it’s clear that family comes first when investors think about the objectives for the wealth they intend to pass on. Providing financial security, funding education and covering health care needs are all paramount.

Source: State Street Global Advisors’ survey, “Money in Motion,” June 2015. Q: What are the likely primary purposes of your wealth when you pass it on?

Although each family’s purpose will be unique, the core motivation remains the same: to achieve a sustainable impact. The balance sheet is important, of course, but empowering others has more to do with the qualitative aspects of the family’s wealth. Purposefully navigating wealth requires a framework to help transform ideas into action.

Money taboos often hold clients back. An advisor can help clients reconcile inertia by concentrating on the idea of family legacy and values. From our Money in Motion survey, individual investors noted this as their second most important prompt2 to consider generational wealth planning. This positive life-affirming theme can be a great foundation to work from and can help bridge the gap between aspiration and execution.

A good starting point for many families is the creation of a values statement. It doesn’t have to be overly complex and it is not intended to be a static document. Families should revisit the course they are on and modify as they grow together; family dynamics and goals change over time.

Advisors can coach clients through a structured process designed to meet and realize their goals. For practical steps toward uniting families around what matters most, leverage our investor worksheet: Developing a Family Legacy and Values.

1State Street Global Advisors’ survey, “Money in Motion,” June 2015. Q. How much is wealth planning discussed within your family?
2State Street Global Advisors’ survey, “Money in Motion,” June 2015. Q. What were the primary triggers that made you start thinking about wealth planning? Rank the top three.