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Wealth and Family: How Your Wealth Advisor Can Help With Family Dynamics

BY Spectrum Wealth Management | Sep 2, 2021

When it comes to family wealth advisors, they exist in several professions such as accounting, banking, financial planning, and law.  Their professional skills are focused on the services and advice they provide for families, not the family unit itself.  However, your financial advisor needs to have the skills necessary to deal with complex financial issues that arise in high-net-worth and ultra-high-net-worth families. 

While they are not likely trained as a family mediator or counselor, your wealth advisor should possess the ability to bring family members together to address important issues and differences, resolve disputes, and help with family governance.  Being so close to the family, a trusted advisor observes several types of personal family issues.  While a wealth advisor’s primary duties revolve around business and financial issues, their profound evaluation of the family’s needs often uncovers problems that the family members may not have considered.

Although each family is unique, they share prevalent problems that family wealth advisors can recognize and assist.  Some common family issues include conflict between family members that prevent them from taking action, families that have differences between members yet deny any disagreement, and past hurt feelings preventing family members from making reasonable compromises.

Families typically have existing differences between generations, especially regarding life experience, different perspectives, intergenerational culture, and values.  At times, the older, wealth-creating generations have become successful in their career or family business and are used to doing things in a specific way.  On the other hand, the family’s younger generation may not be motivated to create their own wealth. Or, if they do, they may want to try new, innovative, and potentially “risky” ventures and the older generation may not agree. 

It is up to the wealth advisor to negotiate between both sides: helping the older generation understand their children and preparing them adequately for the future, and helping the younger generation develop the mindset needed to create and manage wealth accordingly throughout their lives.  Many older generation members are often unaware of what other families are doing, do not want to face unavoidable life changes, and are often uncomfortable understanding new possibilities.  Those who are part of the family’s younger generation may be accustomed to having been raised in an affluent environment and don’t feel the need or desire to acquire their own revenue to grow wealth throughout their lives for the next generation.

Our advisors at Spectrum are experienced in dealing with complicated family issues and obstacles that interfere with financial decision-making and planning processes.  They commonly encounter situations that require a delicate touch, knowledge, and creative problem-solving skills.  Here are some common areas we assist family clients with:

Clarify values and shared visions

Every family has a set of unique values that determine how they conduct as a family and a business.  A great way to encourage everyone involved starts with putting the spotlight on what matters most. Values and visions for the future need to be clearly defined, confirmed, and properly implemented.  Our experienced advisors can help start the process with a positive focus on what family members agree on before diving deeper into conflicts.

Gather pertinent information to understand the “Big Picture” in the family business

At Spectrum, we want to ensure we have all of the information needed to help simplify your financial life and help you deal with complexities as they come.  Our advisors seek to get client perspectives via interviews and documents to learn about the business itself, how different family members view the family, family business, and learn more about each individual’s agenda.

Encourage transparency

Family conflicts regularly emerge due to a lack of communication between family members.

Often, family members do not have the correct or adequate information.  Our team of advisors can help appropriately and cohesively bridge the gap in communication so that all involved have the core facts and accurate information.

Bring everyone together

Our advisors are talented when it comes to encouraging open communication between family members and bringing everyone together to discuss future goals.  While every single family member may not have a say in the decision-making process, they can still help family members discuss intentions and help navigate through areas of differences.

Help clients live life by design and move towards their financial goals with confidence

Clients often think there is only one way to get the desired outcome regarding financial goals.  Our advisors can tactfully address family members from all generations and challenge families to reconsider decisions that will help them achieve their goals by taking action in areas that may be new, uncomfortable, or unexpected.

Creating a plan of action for the best future possible starts with establishing objectives that align with your long-term values and moving toward taking proposed steps to reach your goals.  Contact us today to get in touch with one of our wealth advisors and start your journey towards a simpler financial future.

This content is developed from sources believed to be providing accurate information, and provided by Spectrum Management Group. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.