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Having created or inherited significant wealth, be it tens of millions or tens of billions, parents inevitably face the issue of discussing and preparing their children or grandchildren for the responsibilities it entails.
Many family members approach this process with great reluctance or even outright dread. However, others view it as an opportunity to instill in the next generation a framework for understanding family wealth, values, and “responsible prosperity,” i.e. the recognition that with great wealth comes both meaningful family and societal expectations.
It is all about ensuring the next generation will live purposeful, healthy and productive lives, becoming responsible stewards of both family wealth and legacy. Simply hoping and trusting that the next generation will successfully navigate the social and psychological forces that will inform their beliefs and actions with respect to family wealth, is leaving far too much to chance.
We believe a comprehensive framework for engaging children around matters related to family wealth, regardless of age or maturity is based upon two foundational precepts:
Admittedly, there are no universal approaches that fit every family. Families are challenged to craft personalized strategies that reflect their unique values, needs and characteristics. Young people, who are grounded in strong values, are self-aware, worldly, challenged and ready to assume leadership roles, possess the ability to create, grow, and transform the family enterprise.
Some will do this on a global stage, others in their communities. Regardless of the nature or scale of their impact, much is to be gained by families who address head-on how they prepare young people for the benefits and obligations of wealth.
There are few substitutes for effective and candid communication when addressing the role of family wealth and its impact on all concerned. Families should avail themselves of trusted advisors when there are meaningful barriers to good communication between couples or with children.
That’s because introducing and preparing young people for the responsibilities and burdens of wealth is a continuing process that begins at a young age and continues well into adulthood. For a more detailed perspective on preparing children and young people for the responsibilities of wealth, read Citi Private Bank’s latest white paper on the subject: When hope is not a strategy: Preparing children for significant wealth.
The white paper was authored by Stephen Campbell, Managing Director at Citi Private Bank and Chairman of the Citi Private Capital Group. He is responsible for advising clients around the world on a range of family succession, next generation leadership development, and family office and investment management best practices. Steve has published widely on these and other topics in leading journals and is the author of The Challenges and Opportunities of Family Leadership (2019).