A valuable chat
Most wealthy families believe that their legacy of wealth will ensure the success of future generations, but they dawdle in talking to their children about how to manage it
Most wealthy families believe that their legacy of wealth will ensure the success of future generations, but they dawdle in talking to their children about how to manage it.
A survey of more than 100 parents with an average net worth of more than $20 million found that most parents wait until their children are firmly into adulthood to discuss how they should use their future wealth.
Fully 36% of the respondents had spoken with their children about their family wealth before they turned 21, and only 16% had broached the topic before their 16th birthday.
“It’s not that families aren’t talking about money; it’s that they aren’t talking about the values associated with money and their recipes for success,” said Jeff Ladouceur, director of SEI Private Wealth Management. “What the current market’s done psychologically is to increase the need to understand what is noise or reaction in the market and what is a real business opportunity.”
According to the survey, conducted by SEI Private Wealth Management and Scorpio Partnership Ltd., about half of the parents have strong ideas about how the next generation of family members should use their inheritance, but only 19% have actually communicated them to their kids, and only 11% said their children have taken the initiative to talk with them about the future of their wealth.
When parents do engage their children in a discussion about wealth, the results are mixed; 43% report a satisfying and liberating experience, while 39% find the task frustrating or uncomfortable.
Of those who choose to discuss familial wealth, 71% relay ideas through casual family conversations, while 18% choose formal family meetings and 11% communicate through private-bank or investor meetings.
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