By Andrew Fay
With school summer vacations here, many of us are looking forward to spending time with our families. We all face the same challenge: With busy working lives, and kids in school or living across the country, how can we set aside time to have important conversations around future? Twice a year, my family schedules time together—not for vacation, birthdays or other milestones. Instead, we do something that many families might dread: We discuss money.
I’ve supported the family office community for about 15 years. Their work goes beyond just investment management: Family offices can do virtually anything and everything based on the specific needs of a family, and most often, they play an important role in helping family members stay connected.
For example, family offices often help coordinate “family meetings,” which are formal gatherings of family members from every generation in one place to discuss financial matters and estate planning. Years ago, these family meetings got me thinking: Shouldn’t every family do this? It was actually my own children who prompted the idea—and when your kids recommend spending time together, you listen! Our family meetings might last only one day, or even one meal together, but we take time to look back at our year, share our expectations for the future, and—gulp—talk about our finances.
Family offices often ask for advice on organizing family meetings, and I have a few stories and best practices to share:
- Start early. Many people wonder, “When is it appropriate to talk about money or disclose wealth and estate plans to children?” It is frankly never too early to start discussing family finances, but Dr. Timothy Habbershon, who leads Fidelity’s Center for Family Engagement, does recommend age-appropriate transparency instead of waiting to disclose important information only when it is “necessary”—for instance, after an unexpected life event, such as a death in the family. Family meetings encourage transparency and discourage secrecy, while still being able to hold back if appropriate. One best practice? Try to always answer financial questions that your children ask, even if it means that you do not reveal your entire balance sheet.
- Have an agenda. Family meetings are meant to be fun while also accomplishing a set of goals. By setting a formal agenda, everyone can come to the meeting excited but also prepared for the discussions that will take place. Some families invite outside speakers to participate, or moderators to guide the discussion. Others coordinate the agenda themselves.
- Focus on the “how.” The agenda will cover “what” you are going to talk about, but remember to focus on “how” you will talk. It is important to understand how a family communicates, and mostly important, where it breaks down and keeps people from speaking openly. Dr. Habbershon identified several habits to consider. One common problem is “absolutizing”—using words or phrases that cut off the conversation, such as always, never, or forget it. Another is negative “attributions,” which are beliefs you hold about other people: They don’t care, they are selfish, etc. For both, try to allow for the benefit of the doubt, and reframe the conversation to encourage thoughtful questions and feedback.
- Make sure the youngest generations are involved. It can be difficult for families to have these types of open and honest conversations. Dr. Habbershon stresses the importance of “peership,” which means that while not everyone in the group is equal in decision-making, “it does mean that people leave the conversation feeling as if they had an appropriate voice, felt part of the group, and were considered in the outcome.” In other words, give everyone a voice but not necessarily a vote—yet. Children or grandchildren should be part of these discussions early in their lives, even if they are not the ones making decisions, and that is why it is important to have every generation participating in family meetings. One idea is to have the youngest generation decide where the family meeting will be held. Or, put them in charge of the agenda—and that will also ensure the content is relevant and fresh every year.
- Keep the family legacy alive. As the younger generations become more involved, it’s equally important to make sure everyone remembers where they came from. One family created a board game that follows the history of the family and how their business began. Another insists on hosting the meeting in their hometown every other year, forgoing a warm vacation destination. One leaves time during meetings for the grandparents to tell stories, with their grandchildren gathered round, no matter the age. And others take the time to look through old printed photos—not just what is on their cellphone.
- Break the ice. We are probably tired of the same “team building” exercises—trust falls, anyone? Instead, give these exercises a purpose, such as building something together that can be donated. To begin the meeting, one family asks everyone to present seven pictures in seven minutes, which is a thoughtful way to share news from the year while giving everyone an equal spotlight. I personally use the “rose-bud-thorn” framework: Everyone shares something good from their year, something they are working to improve and finally a challenge they are facing.
Those of us who work in the wealth management industry play an important role in helping families navigate these discussions as wealth is passed down to the next generation. I know that summer is a sacred time for families, between summer camp, family reunions and beach vacations. But this year, consider suggesting a new family tradition that will continue to pay dividends on the time families invest together.
Andrew Fay is head of Fidelity Family Office Services. The content provided herein is general in nature and is for informational purposes only. Fidelity Family Office Services is a division of Fidelity Brokerage Services LLC, Member NYSE, SIPC. Fidelity Clearing & Custody Solutions® provides clearing, custody, or other brokerage services through National Financial Services LLC or Fidelity Brokerage Services LLC, Members NYSE, SIPC. © 2019 FMR LLC. All rights reserved. 893115.1.0