Most of the business owners and CEOs whom I coach acknowledge the importance of having ongoing meetings with their leadership teams. In these meetings, these executives can clarify their vision for the company, enhance communication, discuss potential challenges, and create tactical plans to execute company goals. Yet many of these same individuals are reluctant to have personal discussions with their families; as a result, they may be leaving their families and their financial futures vulnerable.

With the intergenerational wealth transfer expected to be $41 trillion through 2052, there is a critical need to ensure that members of the next generation are able to sustain their wealth in a responsible manner and maintain healthy family relationships. Unfortunately, research indicates that a majority of families believe that the wealth transferred after a patriarch's death was not ultimately used as he intended, did not last as long as it should have, or created negative feelings within the family.

Thus, there is a need for parents to have conversations with their children about money, family values, and their financial future. In light of the discomfort that many parents experience in discussing these personal issues, financial advisors can add significant value to their relationships with their clients by facilitating these important conversations at a family meeting.

Why a Family Meeting?
A family meeting offers an opportunity to discuss critical issues that can impact future generations. Wealth management will always have a place on the agenda, but when family meetings are expanded to discuss more than money, they can provide an unparalleled opportunity to build stronger family cohesiveness. Once family members are comfortable with the process, meetings can inspire the development of family mission statements, the formalization of family histories, family education projects, philanthropic efforts, and other ventures that reflect established family value.

Preparing for the Meeting
Family meetings are to the family what a strategic planning meeting is to a company. Preparation is the key to ensuring a successful outcome. An important initial decision is determining who will facilitate the meeting. If your clients are not comfortable initiating personal conversations with their children, the family constellation is complicated (for instance, because of several marriages or children from different relationships), or there are current conflicts brewing, it might be a good idea for them to engage an outside consultant to guide the family through these intimate discussions. By offering to be the impartial facilitator yourself, you create an invaluable opportunity to develop stronger bonds with your clients and their heirs.

One important role for a family meeting facilitator is to ensure that all the participants have equal standing. Another is conducting some due diligence before the meeting by interviewing various family members to become familiar with their personal agendas as well as their hot buttons. To be successful in this role, you must be comfortable with an intergenerational dialogue. The key is to ask questions that tap into each generation's concerns and, most importantly, to listen nonjudgmentally to the responses, regardless of your own personal perspective.

These interviews should uncover each participant's views on all elements of the legacy: values, history, family traditions, wishes to be fulfilled, family heirlooms and other possessions of emotional value, and financial assets. The goal is to identify the unique issues that are critical to each person's emotional and financial well-being. The most important question to ask is, "What worries you about your future, for yourself?"

As members of the older generation, your clients need to consider what they want upcoming generations to know about them, their values, lessons learned, and life experiences. Ask them to consider the impact they want their accomplishments and insights to have on future generations. Just as important, ask the younger generation what they want to know and understand about the older generation.

It is critical to enter a family meeting with a goal in mind and minimize surprises that can derail a successful outcome. Typical family meeting goals include:

  • Creating a broad framework for the optimal development of family financial interests.
  • Sustaining the innate value of the family legacy.
  • Keeping the family together.
  • Supporting individual family members in meeting their myriad goals and potential.
  • Setting expectations and responsibilities for family members.

For some families, this type of meeting will be benign, while for others it won't be viewed as positive. One tactic to minimize the potential stress is to connect the family meeting with a social gathering or family getaway. If everyone is looking forward to a trip or activity, it can have a positive effect on the participants' mindsets and result in a more productive session.
Finally, before the family meeting it is imperative that you establish ground rules. Each family should tailor the rules to fit their needs. Some possible rules:

  • Spell out the maximum length of the meeting.
  • Announce the topics to be discussed.
  • Listen actively. If you don't understand something, paraphrase it to the speaker and ask him or her if your interpretation is correct.
  • Make sure one person talks at a time and everyone gets a chance to speak.
  • Keep an open mind.
  • Make "I" statements. Don't blame or attack; talk about how you feel and say what you think.
  • Create an action plan with follow-up for each topic.

Using This Tool in Practice
While being a facilitator of a family meeting can be a labor-intensive endeavor, by being fully engaged in this essential role you can occupy a unique niche for your key clients. Incorporating this essential service into your practice allows you to not only create loyal advocates of your current clients, but potentially to gain their children as clients and retain the family assets.

Therefore, it is critical that you carefully identify families that you believe would not only benefit from this service but be worth the investment of your time. Some criteria that you might consider are your clients' net worth and assets under management, your level of comfort discussing intimate topics with them, and your desire to retain the next generation of the family as clients.

For your clients, family meetings provide an unparalleled opportunity to express their vision for their family, recognize and resolve conflicts, preserve family values, and share family history so younger generations can gain an understanding about the commitment they need to make to the family and prepare for inherited wealth. As facilitator, your willingness and ability to connect with your client's heirs may help to ensure that you maintain a future relationship with them as clients.

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Dr. Denise Federer is a clinical psychologist, executive coach and founder of Federer Performance Management Group. She has been a consultant to the financial industry for 25 years.