Talking about money: breaking the taboo

Study findings from 'Algorithms of Wealth'

Ultra-high-net-worth families can help maintain unity and wealth preservation by simply discussing their financial goals, according to a study, "Algorithms of Wealth." But this means that these families will have to overcome a common taboo: discussing their family wealth.

But what are the key factors in delaying such a discussion? When asked what was the number one hurdle to achieving financial goals, 43% of respondents in the study gave the most common reply: family disputes.

In "Talking about Money; Breaking the Taboo," we discuss the findings of the survey¹ and some practical strategies to help overcome family disputes and promote a positive family engagement.

Some of the top findings:

Ending the conflict loop - While it may seem that conflict is inevitable, the truth is that more engagement, not less, leads to better outcomes.

Under 21 and in the dark - The youngest generation is largely kept out of the conversation until they become young adults. Most receive little formal or experiential education growing up.

Seeking guidance - When confronting difficult financial problems, some wealthy Americans rely solely on themselves. Others turn to family or wealth advisors.

Once the decision has been made to discuss your financial goals with your family, we offer the following strategies to keep the discussion engaging and with a purpose.

Goals-based investing - Focus on identifying clear objectives for individual, family and philanthropic endeavors. This helps improve investing success and promotes better communication and understanding among family members. 

Teach your children well: how to integrate kids at any age - There are three key pillars to prepare the next generation: Choose age-appropriate activities to help kids develop their financial literacy; be mentored (and mentor others); and participate in experiential activities.

A seat at the table: building a personal board - Adopt a “boardroom” approach that includes the entire family in developing shared goals and strategies. A structured approach that combines input from family and professionals leads to better choices and more family unity.

¹ Survey of 275 ultra-high-net-worth investors where average total financial assets of the individual respondents were $18 million.

Legal disclaimer: 

SEI Private Wealth Management is an umbrella name for various wealth services provided through SEI Investments Management Corporation, a registered investment advisor. Investing involves risk including possible loss of principal.