1. Start Early
It is most effective to start education sooner rather than later. When family members are exposed to the process at a young age, it becomes part of their DNA. Younger participants may not always be ready to absorb or comprehend the information, but the chance to participate in the process will prepare them for when they are mature enough to do so.
2. Commit to the Process
Education from one generation to the next should be done in slow, yet steady increments. When families view education as a continuous process rather than a single event, the task seems more manageable and less daunting; so positive results can be more easily achieved.
3. Create a Plan
The long-term commitment to education should include an intentional plan. Remember that learning can take place in almost any setting, so plan for learning opportunities in advance, but also be flexible enough to take advantage of unforeseen teaching moments as they arise organically.
4. Seek Input and Consensus From the Participants
Don’t forget the importance of involving the whole family in educational planning. Each generation may have different ideas about how to approach financial education, and sharing ideas may help avoid conflicts and increase participation among all generations. Making the next generation feel involved and taken care of is essential both to the educational process and, frankly, in ensuring that they retain you as their advisor when the previous generation passes.
5. Disclose Financial Information as Appropriate
Being open and forthright with financial information is a key part of the education process. We encourage families to talk openly about financial facts and figures. While certain financial information may be too sensitive to share, working towards transparency with your family is preferable to concealing information.
6. Appeal to the Talents and Interests of Family Members
Remember that each family member has unique talents and passions. Consider ways to engage each family member at a level of personal significance, such as allowing individual family members to direct charitable gifts based on their personal interests. Doing so will not only harness the maximum productivity of the family, but will encourage buy-in.
7. Look for Non-Family Member Mentors
Individuals from outside the family can complement the education process by providing outside experiences and perspectives. Sometimes a family’s view of one another and their holdings can become too insular and they may be blind to deeply ingrained biases that are obvious to any outside party. When such individuals earn the respect of family members, they become a key part of the learning experience.
8. Lead by Example and Admit Your Mistakes
Families can encounter obstacles and challenges in their business ventures, relationships and educational pursuits that can be used as examples to educate the next generation. Those that openly discuss failures, and the lessons learned, are always in a better position to help the next generation avoid repeating unpleasant events or recreating unpleasant circumstances.
9. Document It.
Good recordkeeping is important for tracking the family’s history and values, financial and otherwise. Take the opportunity to engage younger generations in the process, and invite them to bring fresh ideas to the table. New electronic mediums are becoming commonplace, so don’t miss the opportunity to let younger, tech-savvy generations take the lead.
10. Measure Results and Adjust as Needed.
Make sure there is open dialogue among the generations, evaluate and review progress and do not be afraid to adjust course as the next generation provides feedback on areas where they need additional education.