The Next Generation of Wealth: Three Tenets of Multi-Generational Planning
A Twenty-Year Drought
Coming into the 2024 Paris Olympic games, the US Men’s 4×100 relay team was looking to end a 20-year Olympic medal drought. Despite that drought, they were the favorite to win gold. And, with four of the fastest men on the planet competing together, the team expected to deliver on those high hopes. Unfortunately, in a continuation of historical mishaps, they were disqualified from the final due to a botched exchange of the baton.
In relay racing, every runner needs to be in top physical condition and know exactly how to work with their teammates. The baton exchange is what makes or breaks the race but is done blindly, so communication is paramount. This communication allows the exchange to happen at the perfect moment so that speed is never lost. Without this communication and coordination, even the fastest individual runners will struggle to win a team event.
Passing the Baton in Multi-Generational Planning
What can we learn from this when working through multi-generational wealth planning? To successfully run their leg of the race, each generation must be communicating, coordinating, and even training together. This builds the intrinsic skills and motivation to not only preserve family wealth but to seek ways to grow it further. To ensure that family legacies and a sense of stewardship survive for generations to come without botching handoffs and succession.
That may sound easy, but surprisingly it happens far less often than it should. More often, senior generations fail to provide the path for junior generations to learn and grow into their seat at the family-wealth table. This can be a result of holding the baton too tightly, distrusting that the next gen is ready for the handoff, and trying to over-protect from failure.
At Truepoint we have developed processes to help families understand how to avoid these pitfalls and set themselves up for the highest likelihood of prolonged, generational success. While we as Wealth Planners do not replace parental guidance, we do help to create a family wealth culture. This requires serious intentionality and prioritization, so our process involves three key tenets, which help form an inclusive family-wealth table:
- Fostering open communication – Creating environments where each generation has a seat at the table. Giving a sense of safety to ask questions and to say “I don’t know.” Recognizing that silence can be destructive.
- Empowering individualism – Allowing everyone to understand their role in both the preservation and creation of family wealth and legacy. Starting with small commitments, and an end in mind. Giving all the trust that a successful journey is not always linear, with the faith to fail but fail forward.
- Ensuring alignment – Stewarding your family’s values and aligning those values with financial strategies to support family harmony over generations.
By putting these tools in the hands of your family, we set each member on a path of self-actualization. A path that avoids the fall from value creators to purely value consumers. A path that allows each generation to look to the next and be proud of the effort being put in.
Finding the Right Coach for You
A great relay coach and a great wealth advisor have something in common: a deep knowledge of both the unique skills and blind spots of each of their coachees—and the ability to strategize around that knowledge.
At Truepoint, we prioritize building a meaningful relationship with every client so we can equip them for their specific path to success. And when it comes to multi-generational planning for families, that means creating a team that coaches each generation individually—while working together to cast a cohesive vision for the whole family.
If you’d like to have a conversation with our Family Office team about your vision for your family’s future, contact us today.