Probing for the Environmental, Social, and Governance (ESG) issues that are important to your multi-generational UHNW/HNW families will allow you to assist in creating a family wealth vision statement. When families possess significant wealth and already have a history of philanthropic giving, such a statement is meant to guide future gifts.

This isn’t meant to be binding upon the following generations, but it does allow strong suggestions for family support of various organizations to continue from generation to generation. An example might be a city or a town where many generations of the family have lived and where they have always given money to the local library, church or synagogue, or recreational facilities.

Even if all family members move away from the locale as time marches on, continued support of local organizations the family has supported for generations would give a sense of continuity to the new generations.

How to Begin the Creation of a Family Wealth Vision Statement

Creating a family wealth vision isn’t going to happen in one meeting, or even two or three.  The concept itself needs to be introduced at the right moment, and the family needs time to think about it. One of the best ways to begin the discussion about a family wealth vision is during an overall ESG discussion. Indeed, it can be part of your ESG presentation.

What Are the Values of Your UHNW/HNW Families?

Because there are many categories under the ESG umbrella, you will need to guide the family through discussions of what they most value as well as changes in society they would most like to see over time. For you to have a clear understanding of how to invest the ESG portion of their portfolio, the family will have to make choices. Is carbon discharge/climate change the most important issue to them? Or do their interests lie more in the governance area of ESG which encompasses such issues as gender equality in management positions, pay equity, and composition of a corporation’s board of directors?

To properly invest their funds, you need to discover what the family truly values.

Of course, there isn’t going to be general agreement on everything. Yet by guiding the discussion, you can help the family reach a consensus on what matters most to them as a group as well as areas that might matter to different sub-groups of the family.

Further, we believe every UHNW/HNW client relationship should have a written investment policy statement. Introducing the question “Is it important that your investment portfolio reflects your family’s values?” is a great way to get the conversation on ESG started.  If the answer is yes, this leads to adjusting the investment policy statement.  If no, the path to creating a family wealth vision statement remains open as the next discussion is normally centered on “What impact do we want our wealth to have on each other, future generations, and society in general?”

While such a statement isn’t important to every family, it does provide an opportunity for you to meet members from every generation of the family and demonstrate your value as the trusted advisor.

 

To read more about ESG, click here. 

To learn more about this topic, register for our Fiduciary Investment Management course. 

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Contributing Writer: Subject Matter Expert Charles McCain