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Picking Up on Last Week’s Post
Last week, in On Family Wealth Integration, Revisited, we ran out of racetrack just as I was getting to something pretty relevant.
So I punted it forward a week and will now circle back to an idea I introduced, but then realized that I couldn’t do justice to in the space I had left.
I’ve become enamored with the idea that a big part of the role I play with some family clients is actually all about helping integrate the family’s wealth into their family.
I also understand that for many readers, maybe most readers, this is far from clear.
I’m used to the fact that the work I do is almost never clear, and I’ve been sharing ideas about it on a weekly basis here for well over a decade in an attempt to mitigate that fact.
I’ve also resigned myself to the fact that even if I continue for another decade, more work will need to be done.
But let’s see how much progress we can make on the idea of family wealth integration.
Let’s Check in with Mr. Google Again
My old friend Mr. Google is always very helpful so I’ll call on him once again here.
He now returns not just links, but also A.I. summaries, and you don’t even have to ask for them, they just show up, similar to ways A.I. keeps showing up unexpectedly and often unwantedly, all over our lives.
The A.I. overview of “integration” is “the process of combining multiple elements into a unified whole”.
For our purposes the two elements we’re combining are the family and their wealth.
While simply stated, this doesn’t mean much to most people, so let’s dig a bit deeper.
The family is comprised of several people, and since I typically work with families who intend to have their wealth last for multiple generations, I’m almost always dealing with parents and their offspring.
Talkin’ ‘Bout My Generation
The senior generation leaders have usually already integrated the wealth into their lives, so the challenge is around helping the rising generation(s) integrate the family’s wealth into their lives.
That leading generation, accustomed to the wealth as part of their lives, can sometimes underappreciate how the family wealth can be difficult for the rest of the family to fully integrate into their lives.
The Merrill report I linked to last week (download available at the bottom of that page) breaks down the journey that most rising gen family members go through during this lengthy process.
It begins with what they label as “Awakening”, which is all about when the young (or not so young) person becomes aware of the wealth that the family has, and that they’re now expected to integrate into their lives.
Let’s not forget that in almost every case, this wealth is not a simple drawer full of cash that everyone can access at any time, for any reason.
See Inheriting Wealth AND Structures.
Confusion: The Most Difficult Part to Get Through
The stage that follows Awakening is “Confusion”, which has a sub-title that reads “I’m overwhelmed by what I don’t know”.
We’ll spend the rest of this post on this, but I need to share that the final three stages are Perspective, Learning, and Adaptive Integration.
Part of the difficulty in the Confusion stage is that it can be very frustrating, not just to the rising gen who need to work through it, but also to the leaders who can become impatient with the timeline.
And let’s not forget, we’re not talking about one monolithic generation of homogeneous people, we’re talking about individuals.
Each person has their own strengths and weaknesses, preferences and desires, learning styles and risk tolerances, and desire to do things together as a family (or not!).
When you then layer in a host of new relationships with advisors, it can quickly become a lot to take in, and it often intersects with a busy time in their lives, starting careers and families.
Why Does It Take So Long? Because It Does!
As I wrote years ago in There Is No Destination, this is all about each person’s life journey.
There’s no question that being part of a family with substantial wealth brings with it many advantages, but that doesn’t mean that it’s all rainbows and roses.
This stuff is very complicated by its very nature, and the family relationship aspect makes it very complex.
It takes time to integrate the wealth into the family, but doing things right usually does.
