Investing time in educating the next generation can guarantee that they have a solid knowledge of the principles that underpin your family’s wealth aspirations.
In this article, we will discuss family wealth management and how to engage the next generation.
1. Defining a Purpose
Storytelling is one of the most powerful strategies for creating pride in the next generation. Families can establish connective tissue between generations and underline that the business has a legacy worth keeping by telling the story of the business’s founding, the founder’s vision, and the values displayed in sustaining the business.
2. Expose the Business to the Next Generation
It’s tough to be engrossed in something you don’t understand. It is also vital to create continual chances for the emerging generation to learn about the business. Touring facilities, shadowing executives, mentorship programs, summer employment, and internship possibilities are all learning opportunities that can help decide which members of the growing generation are most interested in the firm and may one day want to work there.
This can help develop a pipeline of future leaders and – even for those family members who ultimately decide not to join the firm – foster a better understanding of the advantages and obligations that come with having a business owner’s family.
3. A New Generation Brings New Perspectives
As adult children take on more responsibility for the family’s wealth, their perspectives on wealth may differ from those of earlier generations. Rather than allowing the gap to widen, we recommend holding a family gathering to discuss any divergent perspectives. Try to understand their perspective and put your questions before them about your queries.
4. Creating Dialogue within Families
A family gathering is an open venue for discussing the fundamental process of how wealth will be transferred. Attorneys and other consultants can attend the meeting with the family, or it can just be the parents, children, and their financial advisors.
There’s a risk of emotional discord if that open forum doesn’t exist. The ultimate goal for everyone involved in the process is to protect hard-earned wealth while also bringing everyone on board to help secure a family legacy.
5. Engaging the Next Generation
It is extremely possible to get the next generation interested and engaged with wealth considerations, and when done right, it may have a substantial positive impact on their attitude on wealth and financial responsibility.
While discussing family trusts can be emotionally exhausting, involving the next generation in philanthropy discussions can introduce them to many of the same types of information and issues while removing the distractions of self-interest and control.
Everyone has learned vital financial lessons by making mistakes, regardless of their degree of wealth as a child. As a starting point, it’s critical to offer the next generation space to learn and make mistakes, as well as some control and decision-making power (with suitable natural implications) over a small number of assets.
