Help clients build family values

With baseball season in full swing, families everywhere know that having the home field advantage creates a greater…

With baseball season in full swing, families everywhere know that having the home field advantage creates a greater opportunity for their favorite players to come together as a team and secure the win.

Teams that play on familiar ground, and with the support of the fans who love them, simply do better. In families, too, a sense of trust and familiarity can create a home team advantage as financial advisers seek to transfer values, strengthen bonds and establish a sense of common purpose.

Advisers can work with wealthy families to encourage teamwork, communication and cooperation so that these families are better prepared to meet personal and financial goals. Clients will learn that the next generation will have important decisions to make together, and advisers will work hard to build practices and relationships that will prepare them for difficult future decisions.

In fact, research shows that wealthy families that work hard at transferring their values have stronger intergenerational ties and are better able to protect their assets. Of course, not everyone has billions of dollars to protect, but everyone can benefit from best practices.

TRY TEAM BUILDING

For instance, team-building exercises are one great way to build family unity. Advisers can work with families that organize team-building activities.

This isn’t a vacation but a controlled activity that the family should organize.

Keep in mind President Dwight D. Eisenhower’s observation that “plans are nothing; planning is everything.”

It is the process that builds the stories, memories and experiences. To design a team-building activity, families can borrow the exercises from college freshman orientations or company management trips, or just Google “team building.”

Remember to help families choose activities that are appropriate and fun for everyone.

Family philanthropy is another best practice we can borrow from wealthy families, who often see charitable activities as a way to communicate their values to the next generation. A family doesn’t have to be the Rockefellers to bring relatives together to discuss which charities are most important to them and how they want to contribute to them.

If money is tight, families can even volunteer together. The critical thing is to make these decisions together and to involve younger family members in the discussion.

Successful families begin exposing their children to the group decision-making process very early on, and gradually increase their involvement as they grow up. We see three main stages of family involvement as children mature.

We call 3 to 13 the dependent stage, a time when families begin introducing concepts and vocabulary that help children make sound decisions. This is the time to talk about saving, spending and giving.

Advisers should get their clients to talk about how their children might want to divide up their allowance to meet needs now and in the future, and perhaps even to give a portion to charity.

THE INDEPENDENT PHASE

From 13 to 23, children enter what we call the independent phase. At this age, families can start building a sense of teamwork among their children and extended families.

Those who want their children and their cousins to be able to make decisions about family issues have to make sure that they know and appreciate one another. At this age, children need to help make meaningful decisions.

Even at 13, a young person can be fully involved in planning a family vacation.

From 23 to 33, children move from independence to interdependence. They begin to have serious relationships with people outside the immediate family: significant others, spouses and their own children.

Advisers can help clients start building a team at any age. But there is one important rule to remember: It is important to have clients delegate decision making to their family members and to live with the consequences.

Ask your clients to start with small decisions such as a weekend outing or where to volunteer as a family. As the “team” becomes better at making decisions and communication, it should raise the stakes.

But in order to build a team, mothers and fathers will have to give up some control. It is the only way that their kids will learn to work together to make the right choices.

Tom Rogerson is a managing director and family wealth strategist at Wilmington Trust Co.