A slight majority of those polled said they had firm expectations for how family members should use the wealth they inherit, but only 19% had communicated their feelings about wealth to their families. Just 11% believed that their children had communicated their hopes and fears about the family’s wealth to them.
Families that do discuss their wealth often have positive outcomes. Forty-three percent of respondents described the experience of having their families involved in financial interests as fulfilling or liberating. However, 39% came away from the experience feeling frustrated or uncomfortable.
Sharing information about financial matters usually takes place in informal settings, according to the survey. Seventy-one percent of respondents said financial interests were discussed during general family conversations, while 18% said the conversations took place in formal family meetings, and 11% said these happened during private bank/investor meetings.
To help high-net-worth families effectively communicate on wealth issues with their children, SEI provided tips in its statement:
- Engaging in small conversations about money early will make the bigger talks you have to have later in life less daunting. It is important to show children you are comfortable and approachable on the topic.
- Take the initiative to start a money conversation with your children. Otherwise it likely will not happen, as many children take their parents’ silence on any topic as a sign that it is off limits.
- Talk about what you want your wealth to do and what expectations you have for your children related to it. This will help children embrace their own values and ultimately help create more productive financial behaviors.
- Talk about the issues and implications of money in the context of real life. Using everyday occurrences as teaching opportunities will serve your children better than any formal annual debriefing.
- Wealth conversations or any effective conversation must be two-way. Listen and respond to your children’s questions, thoughts and concerns. If they know you’re listening, they are more likely to open up, making the talks more valuable.