At Morgan Stanley, This Ex-Teacher Schools the Heirs of Ultra-Wealthy Clients

Learning the “basic building blocks” of goal setting, saving, credit management, taxes and cybersecurity is essential because “they’re needed for everything else,” Burgess points out.

Morgan Stanley makes financial education available to children as young as 6 up to adult children in their 60s. The curriculum ranges from defining spending to investing and philanthropy.

Burgess has experience with the younger set, having been a public school teacher. She started with Morgan Stanley in 2000, working in the institutional equities division. She had a stint as a financial advisor before becoming a specialist in advisor training.

Burgess, who joined the Family Office Resources team in 2018, notes that younger generations are apt to feel “pain points,” such as insecurities about their role as managers of the family’s wealth.

Here are highlights of our conversation:

THINKADVISOR: What’s the goal of your financial education program for ultra-high-net-worth clients’ children? 

CHARLINE BURGESS: We’re focused on helping UHNW families maximize the value of the human capital of their family members.

We believe we’re giving them the foundation they need to have meaningful, fulfilled, engaged lives.

We think this is a critically important service for families. We’re developing the next gen as effective stewards. An effective steward will manage the family’s legacy and wealth so that they’re meeting the goals.

They’ll have a financial plan and money to sustain the family going forward, as well as a family business, if they have one.

OK, but why is there a need for you to provide this?

First of all, there’s a gap in education in the school system because they don’t teach basic financial literacy tools for managing money at all.

We think that having that basic financial knowledge is also an effective conflict-management tool allowing families to have conversations about their finances; or, if they have a business together, having basic knowledge will reduce the potential for conflict around that.

The next gen frequently brings up “pain points,” you’ve said. What are some?

With younger people, we often hear about their desire to have more independence. They share with us their insecurities and doubts, their anxieties.

Sometimes they talk about all the responsibility that comes with wealth and about what’s expected of them in the future.

This is why we have this program — to help the next gen become effective stewards of the family’s value vision and wealth and able to handle with confidence the responsibilities that are going to come to them.

What’s another pain point?

Sometimes how much the family is worth is a question for many, For those who do know the number, understanding the context around what that number means is critical.

You’re referring to a parent not wanting the children to know how much money the family has?

That’s true, depending on where the children are in the learning process and their own personal choices.

Do next-gen children just quietly accept everything you tell them at these sessions?

We’re interacting with them. We’re not just presenting and they’re listening. We’re asking questions of how [issues] are relevant to their situation and how they might have encountered a topic we’re discussing.

The subjects create an opportunity for dialogue between the next gen and all family members, as well as learning how to talk to their financial advisor [who is present at these discussions].

At what age of the next gen do you start to hold these meetings?

We work with all ages. We can start as young as 6 to 8 years old with basic money concepts: What is money, what’s saving, sharing and spending and what that means. The age goes all the way into the 60s.

Sometimes we’ll work with the whole family together: the parents and the children — whatever is comfortable for them.

What else do you teach?

Our broad curricula include financial goal setting, financial planning, saving, debt management — including understanding credit scores and credit history — identity theft, the tax life cycle, understanding what’s involved in buying a home.

In personal financial skills, we discuss what it means to create a budget, how to figure out your cash flow, why does cash flow matter, what’s an emergency fund.

These seem like simple topics, but the management processes that are behind them are really complex and require understanding sophisticated concepts that we believe are going to give the [next gen] the life skills for evaluating every new situation that comes up.

So when they get to the point where they might have to look at an operating budget for a family foundation, say, these basic skills will come into play.

When do you get into more advanced material?

Once we achieve that basic level of personal financial concepts, we expand and focus on deeper topics, such as investing and philanthropy.

We discuss family governance, working with a family business, careers, entrepreneurship, insurance, joint finances and understanding financial wellness, among other issues.

What financial area does the next gen need help with most?

It’s critically important that they understand the impact of the basic financial concepts like goal setting, savings and credit management and how taxes play into their life and about cybersecurity.

These are the basic building blocks they need for everything else.

What do you teach about cybersecurity?

Identity theft and common ways that happens. We discuss tips on how to keep their personal identifiable information safe. We go through a list of how they could be taken advantage of in that area.

In addition to private family sessions, you also have virtual events for a mix of clients, their family members and prospects, in which the advisor isn’t present. What distinguishes those?

We’re able to break the material up into digestible chunks of information at a cadence that works for the family — maybe once a week, every other week, once a month.

By having time in between to process and do experiential learning — learning by doing — and then coming back and discussing what they observed, if they looked at their expenses, say, they can see the impact that would have on their financial plan.

So we talk about practical applications of what we’re discussing and how they can put those into play.

For the virtual events, you primarily target people who are ages 18-35. Isn’t that a little late to start learning about basic financial concepts?

Any age is a great age to start. It’s good to start when you’re younger — but start where you are.

We meet the learners where they are and build from that point. Some of the attendees are with their children and grandchildren. So though we’re targeting the age range of 18-35, that’s not necessarily the age of the attendees per se.

Couldn’t the next gen who attend the virtual sessions already be clients on their own?

Yes. Certainly some are. But that doesn’t mean they understand all the concepts in a deep and meaningful way.

I like to think that watching our webinars together is a precursor to deeper conversations for the family after the session.