Reframing Financial Education For Next Gen Heirs

Reframing Financial Education For Next Gen Heirs

By Whitney Webb, Managing Director, Family Governance

Preparing the rising generation for the responsibilities of significant wealth is a process, not an event, and along that journey, the words we use and the mindsets we foster matter deeply. Based on over a decade of experience in working with rising gen members and their families, below are several important reframes and actionable strategies to implement family wealth education today.

  1. From Individual Focus to Family-Centric Learning
    No one likes to be told what to do, even when it is for their own benefit. Effective education, change, and transitions happen with input and buy-in from all generations rather than a top-down mandate. Instead of singling out next-gen members, reframe education as a family-wide endeavor, fostering a culture of shared learning and understanding. By involving the entire family in educational initiatives, such as joint workshops at family meetings, attending conferences together, or participating in parallel coaching and educational opportunities, we shift the focus from individual responsibility to collective growth and cohesion.

    RELATED ARTICLE: Navigating The Complexities Of Being A Next-Generation Family Member

  2. From Financial Fluency to Financial Confidence
    While some high-net-worth family members may be looking to become experts in a space, many only need the financial literacy and confidence to ask the right questions. Keep educational sessions concise to maintain engagement, with a maximum of 20 minutes for lectures or presentations. Encourage hands-on, experiential learning in family wealth education that empowers next-gen members to take action, explore, and learn from real-world scenarios, fostering confidence and autonomy. Examples might include performing a rapid market assessment on a new industry or potential investment or asking the rising gen to help lead the charge in interviewing a new family advisor.

  3. From Financial Responsibility to Opportunity
    Money is anxiety-inducing for most people, regardless of where they fall on the wealth spectrum. While it is important to be financially prudent and plan for future generations, staying in this mindset can feel heavy and sometimes paralyzing. Bring excitement and collaboration to your family by posing questions such as “What is the best impact this money can have on us and those we care about?”

    Use this mindset shift in more specific conversations as well, such as budgeting. In regard to your child’s inheritance money, instead of saying “You need to stop overspending or there won’t be anything left for your children” try, “Why don’t we talk about your financial plans so you can get more of what you really want.”

  4. From Uniformity to Individuality
    Many parents who plan on transferring substantial wealth to the next generation prioritize ongoing harmony and unity. But these priorities can lead to expectations of uniformity that can be challenging to fulfill and may unintentionally add stress to the individuals and/or their sibling relationships. Thriving UHNW families focus on family harmony through the lens of celebrating differing values, priorities, and walks of life. A family discussion on the unique skills each member brings to the table can be a fun way to recognize and celebrate individual strengths.

  5. From Wealth Preservation to Wealth Stewardship
    Moving beyond the traditional focus on preserving wealth, education should emphasize the importance of stewardship. Wealth stewardship entails not only protecting your wealth for the next generation, but also actively managing it with a long-term outlook and a commitment to the family’s core values. Providing opportunities for inheritors to learn about sustainable investing, philanthropy, and social entrepreneurship empowers them to use their resources for positive impact and long-term sustainability.

  6. From Wealth Isolation to Community Engagement
    Wealth is often isolating, as many heirs don’t feel comfortable talking openly about their personal situations. Offer networks and events to help the rising generation find peers and new ways to engage with the world. Some suggested networks and events to explore include: Launch Generation, Nexus, Maverick Collective, and Enclave.

  7. From What Could Go Wrong to What Has Already Gone Right
    When thinking of passing wealth to next generation, it is common for parents to embark on this work from a place of fear: “I’m worried this money will throw them off track,” or “If they know what they are inheriting, they will lose all motivation to find meaningful work.” Instead of focusing on the risks, think about the times your kids have impressed you with their creativity, resilience, responsibility, generosity, etc. How can you create more opportunities for these positive values to shine?

By reframing through these lenses, we empower future stewards of next generation wealth to embrace their roles with purpose, integrity, and independence.

Contact us to learn more about how to prepare the rising generation for the responsibilities that arise from a significant inheritance.

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About Cresset

Cresset is an independent, award-winning multi-family office and private investment firm with more than $45 billion in assets under management (as of 04/01/2024). Cresset serves the unique needs of entrepreneurs, CEO founders, wealth creators, executives, and partners, as well as high-net-worth and multi-generational families. Our goal is to deliver a new paradigm for wealth management, giving you time to pursue what matters to you most.

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