Lack Of Engagement Challenges Families


    Lack of engagement is one of the biggest challenges facing high net worth Americans with regard to family wealth, says data from SEI. Notably, family financial disputes are among the biggest hurdles to achieving financial goals and young family members are in the dark when it comes to understanding and managing the wealth they will eventually inherit. ‘Algorithms of Wealth: Family’ also reveals that a significant portion of survey participants lack confidence about their plan for passing along wealth. Michael Farrell, managing director of SEI Private Wealth Management, says, “Despite viewing the family as an important financial sounding board and being anxious about successfully passing wealth to future generations, high net worth individuals are not consistently engaging with their family members on the topic of wealth.” Nearly half (46 per cent) of survey participants said they would rank disputes with family over financial strategy as a top factor in holding them back from reaching their wealth goals. While the assumption might be that communication leads to friction, it is a lack of clear, consistent communication that results in these disputes. “When wealthy families only convene and communicate regarding finances when an important decision must be made, disagreements follow. While this might motivate some to involve family even less frequently in these discussions, it is a sign that there isn’t enough consistent family engagement. Family should be involved in nearly every step of wealth management, from setting goals to weighing in on major decisions. This engagement also helps underscore family values for the next generation and not strictly the value of a family’s wealth.”