Do you know that….
HNW Families struggle with issues of wealth transfer
Lack of knowledge leads to discontent among next-gen
Many next-gen are creating their own wealth or involved in entrepreneurial ventures
Advisors increasingly serve as “quarterbacks”
In a study released May 7 by Morgan Stanley Private Wealth Management and Campden Wealth found despite their high level of wealth, most respondents said they took an informal approach to educating their children about money, focusing on budgeting, asset allocation and getting to know advisors. The report noted wealthy families frequently use a primary advisor as a “quarterback” to execute plans and coordinate efforts between other advisors.
They noted that philanthropy is a popular way for families to teach their children about wealth. The report found 73% of next-generation parents and 56% of older-generation parents use philanthropy to teach about wealth.
We concur with these findings.
When it comes to managing their wealth, 19% of parents from the next-generation group and 18% from the older generation agree that wealth management should be left to the experts, while their children focus on their careers. Over half of the older-generation parents said their children should find a balance between managing wealth and focusing on their careers. None of the respondents said they wanted their children to focus solely on managing the family wealth.
Nearly half of the next generation will look to advisors for education. What an opportunity!
For those of you who were wondering what other value add services you could add to your clients’ relationships it might be filling the need of basic financial and estate planning educational workshops for adult children and in some instances grandchildren which could include how to buy their first home, the ins and outs of credit cards, how to plan for an inheritance, what is charitable planning, for example. This program series could taught by rotating professional advisors throughout the series so younger generations can get an introduction to several of the family’s advisors over time in turn building trust and relationships.
Educate, don’t sell to a HNW client, by filling the need, doing it with precision and being purposefully collaborative when you execute. You will find the entire process extremely satisfying.
InKnowVision,LLC – Advanced Planning for the High Net Worth
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