We constantly hear from parents, advisors, and family offices that they struggle with preparing the rising generation. That’s because there are a multitude of nuances and issues to address in order to raise thriving, gracious, and productive members of society.
Since we have the humble privilege of working with the rising generation, their parents, and knowing their advisors, we wanted to share what we’re seeing. Often, people who are working with someone in the rising generation come to us and say:
“Hey, we’re worried about the trajectory of the children in the next generation. We don’t want them to be entitled and taking money from their trusts. Therefore, we’re planning a financial education program to empower them and ensure that doesn’t happen.”
The vast majority of the time, they schedule some sort of incentive for these young adults. It usually goes something like this: “We’re planning a session for ‘Next Gen Education’ as part of this upcoming Family Retreat.”
What they’re really saying is: “We’re going to schedule four hours in a dark, dimly-lit conference room, where you’ll be force-fed sterile information from someone droning on about trusts, estates, stocks, bonds, etc. But it will be an all expenses paid ‘vacation’ otherwise—sounds great right?”
Why This Doesn’t Work
When this happens, the rising gen members feel like they’re being forced to listen to this information; they half-heartedly show up and get little out of it. Essentially, they’re doing it in exchange for a free vacation or access to the beach house.
When we speak to them about what they experience, many tell us they’d rather have less money spent on a plush four to seven day retreat and instead use that money to pay for groceries throughout the year.
Now, this doesn’t represent every family, but it definitely represents a number of rising gen members that we talk to.
What’s crazy is that no one is actually asking these young adults what would make a difference for them. It’s always—or almost always—being conceptualized by the parents or advisors who think financial education is the panacea for fixing how we empower and create good stewards of wealth.
It’s Not Only About Financial Education
While financial education is great—and we’re not advising against it—it shouldn’t be the only pillar of a family’s rising gen empowerment program. Nevertheless, it still seems to be the default for how to address any worries about how the rising generation will lead and steward wealth.
We Need to Focus on Impact Too
Additionally, there’s not enough focus on contribution or impact. While we think these terms can be defined quite broadly, the idea of impact should answer questions like:
- What does success look like for you?
- What could you do as a good steward of this wealth?
- What could you create for yourself?
- What could you create for your future family?
- What could you create for the world?
This helps inspire the rising gen to do something bigger instead of making them feel controlled by or responsible for someone else’s definition of success.
Financial Control Isn’t a Proxy for Good Decision-Making
Advisors in particular, but parents in general, are too focused on risk control and minimizing bad outcomes. But it’s time to pivot away from using fear as a tool to attempt to prod, push, or move people along.
More often than not, the next gen is actually looking to establish some type of contribution back to the family, freedom, autonomy, and respect in their own path. But, unfortunately, they’re rarely being asked what they want and aren’t being incorporated into the family business in a meaningful way.
The Path Forward for the Rising Generation
Here are some ideas on how to fix the disconnect, as well as some questions you could start to ask to develop deeper relationships with the rising gen in your family or client base. These are specifically for members of the rising gen that are actively disengaged, aren’t participating, or aren’t being labeled as high-potential performers or leaders:
- If the family could help you solve one personal challenge this year, what would it be?
- What’s your dream for the future?
- If you knew you couldn’t fail, what would you try?
- What does it mean to you to be a good steward of wealth?
- Why is it important for you that this wealth lasts generations?
Ultimately, we have to address these two very different, competing perspectives if we’re going to allow for a new conversation to emerge and a legacy that is sustainable over time. This will help us stop feeling like we’re talking from two different planets and actually move to the same side of the table in order to effectively plan for family gatherings, family events, and/or family education.
Instead of being stuck on the one pillar of financial preparation, such conversations can help us expand our capacity to incorporate the things members of this rising generation feel like they need, whatever stage of life they’re in.