Why Bother with Family Meetings?

Families are often secretive about their wealth, with spouses withholding information from each other and from their children. A lack of reliable information contributes to an environment of mistrust and speculation about the extent of the family’s wealth, who is going to inherit, when and how much.

It could be argued that a more transparent approach where information is shared at age-appropriate times, along with an open discussion about family values regarding the use of its money, has more desirable results. Family meetings provide a structure for sharing information and making decisions in an orderly way.

Why are family meetings important?

Family meetings are a vehicle for making important, often complex decisions affecting the family as a whole and as individuals. They allow families to give thoughtful consideration to issues affecting them now and in the future, and to be proactive rather than reactive in their responses.

Family meetings foster an understanding that a family’s wealth cannot be tallied in financial terms alone, but also encompasses the talents, skills and abilities of its individual members. In order for money to be preserved to nourish succeeding generations, good relationships between siblings and cousins have to be built and maintained; family meetings facilitate good communication, which forms the basis of any relationship. Over time, intergenerational networks of relationships form, which can offer valuable mentoring and connections to family members, and contribute to its increasing wealth.

Family meetings are a good forum to identify what makes your family unique and worth treasuring. Shared traditions and values are strong bonds, so it is important to talk about your family’s history and how your wealth was created. Stories of individual sacrifices and self-discipline build appreciation of the advantages the family enjoys, and can be a source of motivation and inspiration to younger generations. A vision for the family – what it stands for, what it offers each member, and what it can collectively achieve – can be forged and renewed as circumstances shift.

Decisions about money have a direct effect on every family member and often elicit strong emotions. Family meetings are a chance for everyone to be heard and to hear from others, building empathy and understanding for other points of view. In this way, even if key decisions are made unilaterally by the generation that created the wealth, each individual understands how the decisions were made and can put them in the context of competing needs and desires.

Family meetings are a chance to talk about the ‘what if’ scenarios that create anxiety. Family life is marked by transitions and milestones: births and deaths; graduations and career changing moves; marriages and divorces; retirements and successions. Successful families think long-term, as they plan for the expected transitions and make provisions for the unexpected.

It is important that family members understand how the family’s money is meant to be used: for example, to help each individual fulfill his or her potential, to build wealth for future generations, and to make a difference through philanthropy.  Regular meetings which build a clear understanding of the family’s use of money clarify the decision-making process, and reduce feelings of resentment or entitlement.

Who should be included in the family meetings?

Initially, you might restrict the meetings to immediate family members, but some families choose to include in-laws as well. Some include children from the age of ten, reasoning that it is never too early to start learning about money and how financial decisions are made. In attending these meetings, young children are also educated in the family’s values related to money and start to understand their role and responsibilities in the bigger picture.

Sometimes the presence of a trusted advisor or professional facilitator can be useful, if there are complex issues to be discussed or a problematic relationship to be mediated.

Frequency of Meetings

The frequency with which families meet will depend on how many decisions must be made and in what time frames. Families who are running a business involving several family members may have to meet several times a year, and perhaps establish committees which meet more frequently. For families with fewer pressing decisions to be made, once or twice a year might suffice.

Meeting Agendas

The meeting should be organized by a formal agenda, ideally with input from individual family members, which is mailed out in advance with any supporting materials.

As a key objective of these meetings is to get to know each other better and decide how best to work with each other, a good way to start an annual meeting might be to give each family member an opportunity to bring the group up-to-date about significant accomplishments or challenges each has had in the previous year. While a diversity of personalities and characteristics is a good thing in theory, in practice, differences (of opinion or style or values) can be a source of friction, triggering knee-jerk reactions. To build empathy and tolerance, each person might be given a chance to talk about what is most important to them – what drives or excites them. Considering divergent points of view is also instrumental in reaching better decisions.

Agenda topics should include issues that must be dealt with immediately, as well as those that will be important in the medium term, say in the next five or ten years. A key intended outcome of these meetings is to help parents prepare their children and grandchildren to assume stewardship of the family wealth, so it is important to discuss how the family will organize itself to make financial decisions, both now and in the future. For some families, an important topic will be how it will express its values and ties to the community through philanthropy.

Financial literacy is the responsibility of the family, so some families devote a segment of the meeting to formal financial education, with a ‘curriculum’ to be followed throughout the year via websites, sessions with advisors, etc. Equally important as familiarity with technical aspects of finances is learning to choose good advisors and to ask the right questions: guidance can be offered in these meetings, directly and by example. Discussing the business and financial aspects of the family’s philanthropic activities can also contribute to achieving financial literacy.

A family meeting might be combined with a more social family reunion, making it an event to be looked forward to every year.

In Conclusion

Family meetings are important in creating traditions and a vision for the family, a strategy for using the family’s wealth wisely for the benefit of all, and a forum for sharing information and values. A sense of belonging and the satisfaction of contributing to a multigenerational mission builds the respect and appreciation that fosters good stewardship.

This article first appeared in the June 2014 issue of The Business Advisor, authored by Daryn Form.

Daryn Form is a Senior Financial Advisor with Assante Capital Management Ltd. providing wealth management services to principals of family-owned and privately held companies. Assante Capital Management Ltd. is a member of the Canadian Investor Protection Fund and is registered with the Investment Industry Regulatory Organization of Canada.  The information mentioned in this article is for general information only. Please contact him to discuss your particular circumstances prior to acting on the information above.  The opinions expressed are those of the author and not necessarily those of Assante Capital Management Ltd.  Rates are not guaranteed and are subject to change at any time without notice.