Jewish Communal Fund study identifies gaps and opportunities for successfully advising the UHNW multigenerational family
Jewish Communal Fund has released its comprehensive report, “Bridging the Generational Divide: Advising the Multigenerational UHNW Family and Retaining the Next Generation,” based on surveys and in-depth interviews with advisors who service the single and multi-family office sectors. Almost ninety percent of the professionals surveyed have more than 21 years of experience in their respective fields.
“Bridging the Generational Divide” examines the most significant themes culled from the research—understanding how control, communication, and values impact family dynamics and the client–advisor relationship. Each section details these common challenges and suggests best practices for overcoming them. The report offers wisdom and perspectives from seasoned professionals working inside family offices and external advisors serving multigenerational UHNW families in other capacities. Throughout this report, advisors provide an “in the trenches” viewpoint on how to successfully work with complex multigenerational families and overcome common challenges that affect financial, estate, and succession planning. The report operates as a guide to enhance an advisor’s ability to navigate the generational divide and retain the next generation as clients.
One of the key suggestions for bridging the divide is to helpthe generation in power understand that the family’s success depends on creating a strong plan with buy-in from the heirs and a clear path to leadership transition. In addition, requiring some degree of family participation from the beginning of the advisor-client relationship or in the family constitution is strongly recommended.
Above all, philanthropy emerged as the top area where current family leaders are willing to share and even cede some control. Survey respondents said 98% of the conversations on philanthropy involve the patriarch, 87% involve the matriarch, and close to half (48%) of the families they work with are willing to involve, or are already involving, the children in charitable giving discussions.
“Philanthropy is the place where many clients start the money conversation,” Rashad Wareh, Partner, Kozusko Harris Duncan, points out. He suggests that advisors counsel their clients to engage kids, or NextGen adults, in philanthropy as preparation for handling other assets. “Give them some degree of flexibility to fund issues they care about, even if it is not what parents are interested in,” Wareh said. And, when the interests of the family members are quite divergent, Michael Gooen, Partner, Lowenstein Sandler, suggests that his clients “look for areas of agreement and synergies to focus on, and try to spark interest rather than dictating. Allow for the family to work together where itmakes sense, and use other vehicles like donor advised funds so they can also support their own interests.”
Advisors to UHNW families will find the report most helpful in understanding the best approaches to bridging the generational divide and bringing families together for improved estate and succession planning, wealth management, and family cohesion.
To download the report, visit www.jcfny.org/jcfmultigen.