You’ve probably heard the phrase “shirtsleeves to shirtsleeves in three generations.” The implication is that the wealth created by one generation is often lost by the grandchildren’s generation. It doesn’t have to happen that way. With some forethought, you can help ensure that the wealth you’re in charge of today carries forward for many generations to come.
In this 4-part blog series, we'll help you with your generational wealth management planning. We’ll share advice on how to create a wealth management team of family members and professionals; how to hold family financial meetings and create a family mission statement; how to build your wealth management plan; and how to prepare the next generation (and the one after that) for inheriting wealth responsibly. In Part One, we'll discuss how to assemble your family wealth management team.
Who is in a family wealth management team?
No two family teams will be identical. In general, though, most families include the current wealth owners and their children. Older grandchildren might also participate. Sometimes trusted friends are included if they’re considered as close as family and are part of your long-term wealth management vision.
Involving these people in the conversation upfront helps ward off potential conflict and friction after you’re gone. When people know what to expect and have a chance to contribute their voices to the planning process, they’re more likely to support the plan and its implementation.
Determining the family wealth management team structure and governance is important for transferring generational wealth. Usually, the current wealth owners lead the team. Over time, you may choose to assign specific wealth management roles and responsibilities based on emerging needs, as well as family member interests, aptitudes and attitudes. For example, one family member may be ideal to establish a family foundation, while another might be well suited to managing the transition of a family business.
Who is part of the professional wealth management team?
Besides a family team, multi-generation family financial planning involves a professional team. This group supports the family team and helps to implement the actual plan, including the various tools that may be required, such as investments, trusts and wills.
The base of a professional team is often a wealth group that might include a private banker who manages the overall relationship and client interactions; a wealth advisor who works on strategy, financial planning, and long-term goals and objectives; a trust advisor and an investment consultant.
Besides this group, the overall wealth management team also typically includes an estate attorney and a CPA. For families that own businesses, other advisors may also be involved, such as valuation experts, growth consultants, or mergers and acquisitions counselors.
Families may opt to add other experts to their wealth management teams. For instance, one Hancock Whitney client used a behavioral consultant. This person helped the wealth owners identify talents and interests among family members, which were then aligned with planning roles and long-term inheritance plans.
How do you integrate the family and professional wealth management teams?
The entire wealth management planning process usually begins when a wealth owner has a relationship with a financial planner. This sets the groundwork, giving the planner an understanding of the wealth owner’s current assets, existing financial tools and strategies, and what they want to achieve.
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From here, the wealth owner and financial planner pull together the rest of the family and professional team members. Typically, the professionals request permission from the family to coordinate with each other rather than each advisor going to a family member directly. This takes work off the family’s plate and creates efficiency within the professional team.
The professional team then develops specific generational wealth management recommendations based on the family’s goals and objectives. This might cover retirement planning, risk management, legacy building and estate planning. At this point, many families will have part or all of their personal team meet with the professionals and review the recommendations.
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At this meeting, the advisors should explain the purpose behind each recommendation, how it will function and what its impact will be for the family. This gives the family a chance to ask questions, make suggestions and discuss options. Having key family team members involved in the process tends to create more cohesion and more overall satisfaction with the plan.
After the meeting, the professional team makes any necessary revisions to the plan. Once the final recommendations are approved, the advisors then execute the plan. Going forward, it’s up to the family to keep their professional team apprised of any life events, changed goals or alterations in family finances that might necessitate updates. It’s also a good idea for the wealth owner, at least, to connect with the professional team on an annual basis to review the plan and discuss any changing laws or regulations that might impact it.
Many families find it helpful to hold a family team meeting at least annually to review the plan, as well. That’s the focus of Part Two of our Generational Wealth Management Planning Series, coming to Insights soon!
Meanwhile, your Hancock Whitney team is here if you have questions or want to get started on your family wealth management plan.
“Generational Wealth Explained: What It Is and How Experts Say You Can Work to Build and Protect It,” Ivana Pino, FortuneRecommends, posted Dec. 14, 2022, https://fortune.com/recommends/investing/generational-wealth-explained/, accessed May 25, 2023
“How to Build a Successful Wealth Management Team,” Russ Alan Prince, Forbes, posted Feb. 2, 2017, https://www.forbes.com/sites/russalanprince/2017/02/02/how-to-build-a-successful-wealth-management-team, accessed May 25, 2023
The information, views, opinions, and positions expressed by the author(s), presenter(s), and/or presented in the article are those of the author or individual who made the statement and do not necessarily reflect the policies, views, opinions, and positions of Hancock Whitney Bank. Hancock Whitney makes no representations as to the accuracy, completeness, timeliness, suitability, or validity of any information presented.
This information is general in nature and is provided for educational purposes only. Information provided and statements made should not be relied on or interpreted as accounting, financial planning, investment, legal, or tax advice. Hancock Whitney Bank encourages you to consult a professional for advice applicable to your specific situation.
Hancock Whitney Bank offers investment products, which may include asset management accounts, as part of its Wealth Management Services. Hancock Whitney Bank is a wholly owned subsidiary of Hancock Whitney Corporation.
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