Strengthening Your Family
At our recent annual client meeting, noted author Dr. Lee Hausner described a number of strategies for effective wealth management that also serve to strengthen families. In Dr. Hausner’s view, family strength comes from active efforts to build and preserve human, intellectual and social capital, in addition to financial capital. This is a comprehensive approach to wealth management, emphasizing communication, personal development and family values, not just investment strategies and objectives. Other leading family advisors support similar ideas. For instance, Jay Hughes, in his book, Family Wealth – Keeping it in the Family, writes, “The wealth of a family consists of the human and intellectual capital of its members. A family’s financial capital is [merely] a tool to support the growth of the family’s human and intellectual capital.”
Raising a strong family is one of life’s greatest challenges. And strong families mean different things to different people. For some, a strong family primarily means the ability to preserve wealth, while for others knowledge of family history or “togetherness” through work and travel is more important. But whatever the goal of individual families, the critical question is, how exactly do you keep the family intact and supportive of the goals? In considering this question, it is helpful to gain perspective on the development of the family and those qualities which lead to enduring strength.
When a family is simply defined as parents and young children, the parents often provide the “stickiness” within the family. In raising the children, Mom and Dad attempt to convey specific values, like respect for others, the need to share and a strong work ethic. In the early years, it’s easier to maintain control and close oversight of children. However, as children grow up, marry and start families of their own, it becomes increasingly difficult to reinforce crucial bonding attributes. In these instances, keeping the family strong requires thoughtful planning and active engagement.
University of Nebraska researchers Nick Stinnett and John DeFrain have identified six major qualities shared by strong families:
- Communication – a constant flow of discussion of both significant and mundane topics is maintained. Because family members spend continual time in conversation, they are better equipped at solving problems and resolving conflicts
- Commitment –relationships to one another come first
- Appreciation – showing daily gratitude for one another is important
- Spiritual Wellness – common ground in spiritual beliefs provides strength, hope and purpose
- Time – strong families spend more time together
- Coping Ability – the ability to communicate openly, adapt quickly and pull together in moments of crisis
As you can see, communication is a key component in the success of strong families. With ongoing, open and regular dialogue between family members comes strength in the family system. Family meetings are one way to formalize a system of regular dialogue around important issues.
In the structured forum of a family meeting, there is common ground for addressing important topics such as:
- Estate plans – how are these developed and subsequently communicated? What are the roles and responsibilities of family members? Does everyone accept the plan?
- Philanthropy – how does the family define and prioritize opportunities for collaboration?
- Wealth transfer goals – what is the vision for wealth preservation?
- Core values – what are the family’s most important pursuits to preserve throughout the generations (education, travel, spirituality, etc.)?
- Family mission statement – what is the mission of the family and how can it help guide the activities and decisions made within the family?
- Education forums – what topics are important for the family to learn about together? Financial, philanthropic, social, etc.?
Beyond assisting younger generations in managing family wealth, family meetings provide several additional benefits:
- Preservation of family traditions and history
- Education on the prior generation’s successes and direction for the younger generation on their own career paths
- Stronger conflict resolution skills
- Establishment of good stewardship practices
- Creation of a “safe zone” for open communication
In our development and facilitation of family meetings for a number of our clients, Truepoint Wealth Counsel has seen these benefits in action for families of many different types and situations.
Strong families are not built overnight. Therefore, it is important to continually nurture your family’s bond. It’s a long-term process and takes a great deal of perseverance. But no matter your family’s values and wealth management priorities, the ideas put forth by Dr. Hausner and Jay Hughes offer solid guidance to increase the strength of the bonds that hold you together.