Blog The Importance of Family Engagement
October 30, 2024Family engagement plays a crucial role in a family office, particularly for high-net-worth families, by fostering unity, shared purpose, and alignment around financial and non-financial matters. For families with significant wealth, the complexities of managing assets, philanthropic endeavors, and legacy planning demand a holistic approach that includes the voices and perspectives of multiple generations. When done well, family engagement strengthens intergenerational bonds and ensures that all members—whether actively involved in wealth management or not—feel connected to the family’s mission and vision.
How Family Engagement Brings Families Together for a Shared Cause
High-net-worth families often have diverse interests and roles, making it essential to align everyone around shared goals and values. Family engagement helps achieve this through intentional practices such as:
- Collaborative Wealth Planning: Involving multiple generations in the planning process gives family members a sense of ownership and fosters mutual respect.
- Philanthropic Collaboration: Engaging the family in charitable activities or impact investing provides a unifying mission beyond wealth, encouraging family members to work together on projects that reflect shared values.
- Legacy Planning: Family engagement ensures that the story and legacy of previous generations are honored, helping descendants feel connected to their roots and guiding future decision-making.
Through these collaborative efforts, family engagement not only unites the family around a common cause but also builds a shared identity and a roadmap for sustainable wealth stewardship across generations.
The Role of Education in Three60’s Family Engagement Approach
At Three60, we believe family engagement should also focus on educating younger family members about
financial literacy, preparing them for the responsibilities that come with wealth. Many families experience wealth dissipation within a few generations, often due to a
lack of preparation or knowledge. To address this, Three60 emphasizes structured, age appropriate, learning opportunities for the younger generation.
- Teaching Financial Fundamentals: Introducing young family members to essential financial concepts—such as budgeting, saving, investing, and understanding taxes—lays the foundation for responsible financial behavior. Early exposure builds confidence, encourages healthy money habits, and reduces anxiety about financial management.
- Preparing for Inheritance and Wealth Stewardship: For young adults, education also focuses on understanding the mechanics of wealth transfer, estate planning, and legal structures such as trusts. By demystifying these topics, Three60 helps younger family members feel equipped to manage their inheritance effectively when the time comes. This preparation mitigates the risks of financial mismanagement or reliance on outside advisors without adequate oversight.
- Hands-On Learning Through Professional Involvement: Three60 encourages young family members to actively participate in meetings with the family’s key financial partners—such as accountants, investment professionals, tax advisors, and estate planners. This hands-on exposure provides invaluable learning experiences, helping them understand the decision-making processes behind wealth management. Engaging with professionals directly allows younger members to build practical knowledge, ask questions, and develop relationships with trusted advisors. These interactions foster confidence and familiarity with the complexities of wealth management, ensuring they are well-prepared to take on more responsibilities in the future.
Benefits of Family Engagement for Long-Term Wealth Sustainability
When families are engaged and younger generations are educated, the result is stronger alignment between family members, fewer conflicts, and better decision-making. Families that practice active engagement:
- Avoid misunderstandings by fostering transparent communication.
- Encourage continuity of family values, ensuring that wealth is managed with purpose.
- Mitigate risks related to succession planning, as younger members are more prepared to step into leadership roles.
Ultimately, family engagement ensures that wealth management becomes a collective journey, rather than an individual responsibility borne by a few members. By combining education with structured collaboration, Three60 supports the family’s vision of sustainable and meaningful wealth, ensuring that both the legacy and relationships within the family endure for generations to come.
Authored by: Jason Nagel, Director of Advanced Planning at Three60 Wealth