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Expert’s Podium

How to leave a financial legacy Add to ...

Let me ask you a question: what does wealth mean to you? What, ultimately, is the reason you’re building and protecting your wealth?

I realize on one level, the answer to this question is very simple. The first and most important reason we build wealth is to provide for ourselves and our families. Food, shelter, health, education and future opportunities for our children: collectively, these goals are the reasons we save and invest. And if they are not fulfilled, there’s not much else to discuss.

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But once those needs are fulfilled, what else?

The fact of the matter is, we spend a lot of time thinking and strategizing about how to build our wealth, without thinking enough about why we’re doing it. Ultimately, what do you want your wealth to “say” about you, and your values? What kind of legacy do you want to leave behind? Perhaps most importantly, how do you intend to communicate that legacy and those values to the next generation?

This is an example of the kind of “soft issues” of wealth and personal finance that a lot of people overlook. But I think these are important questions, not only for those looking to pass on a legacy, but for all of us. Over the next 10– to 15-years, we will enter a time of unprecedented wealth transfer in Canada. Families will be passing on their wealth to the next generation, and a lot of businesses will change hands too. Collectively, we have an opportunity – I would call it an obligation – to pass on more than just money. We need to pass on our values as well.

I’ve noticed an increasing interest in the question of financial legacy and wealth values over the past three– to five-years. Many of the HNW individuals I know (clients, friends, Tiger 21 members) are devoting more time to defining the meaning of their wealth.

Recently I had the pleasure of meeting Samantha Reynolds, Founder and President of Echo Memoirs . For the past 14 years, Echo Memoirs has been creating personal archives or memoirs for corporate clients, and a select group of HNW families.

Most of these are large-format, attractive “coffee table” books, usually over 150 pages long with dozens, if not hundreds of photos. They struck me as an intriguing way for business owners and HNW individuals to define the meaning of their wealth and success, and communicate that meaning to others by way of a story.

As Reynolds explains, this is a big issue for HNW individuals. “They’re able to offer their kids and grand kids so much in terms of experiences and opportunities,” she told me. “But where I find them at a little bit of a loss sometimes is how to impart the values that they have, and that their parents had.”

Instead of a lecture about values, these people build a story that provides history and legacy to family members. “It’s about touching their emotions, and that’s where you’re going to see real results in terms of trying to pass along values,” Reynolds says.

Many of Reynolds’ corporate clients come to Echo at the conclusion of the business – a “turning of the page” moment – the point when the founder is passing on the business and doesn’t want to let the story behind the business get lost. “It’s for the family, but for employees as well,” Reynolds says. “At the end of the day, the stakeholders are not only the pioneering families, but employees, managers, suppliers, and ultimately clients as well. Stories are so much more effective than policy manuals.”

Echo Memoirs is a high-end, “one-stop-shop” type of service; not everyone either needs or wants such detail. But I think the basic idea about creating context and meaning for wealth is relevant to most everyone. And creating a narrative or story is an intriguing way to do it. Yes, it requires a commitment of time and resources. But the rewards are significant, both to you and the next generation.

With that in mind, here are some ideas about how you can pass on your financial values, through a family archive, a business history, or a life story – whether that story ends up being 150 pages long or a single, handwritten letter.

Start with your values
If you’re going to tell a story, don’t think about telling a story. Instead, think about the themes and ideas, such as your financial values. Ask yourself: when it comes to wealth, what exactly do you stand for? What do you believe in? Create a list of ideas, and start to sketch and brainstorm stories and experiences that best illustrate those values.

Talk about the successes and the failures
The best financial education of all comes from the school of hard knocks. Don’t shy away from talking about these experiences. They are often where the most valuable lessons are. There is tremendous power in revealing vulnerable moments.

Find multiple perspectives
Interview multiple family members. Seek out photographs. Talk to stakeholders large and small. These multiple perspectives will add depth and interest to your story, and illustrate how your values can have a positive impact on others.

Be authentic
This is not a public relations exercise. Nor is it a time for make-believe or whitewash. The truth – no matter how difficult at times – will make your story more powerful, and will ensure that it resonates emotionally with your readers. And isn’t that the point?

Storytelling has been an effective means of engaging multiple generations of family as well as within family business. It’s important to “pass it on” the right way, whether it’s wealth, values, or corporate culture.

Thane Stenner is founder of Stenner Investment Partners within Richardson GMP Ltd., as well as portfolio manager and director, wealth management. Thane is also Managing Director for TIGER 21 Canada . He is the bestselling author of ´True Wealth: an expert guide for high-net-worth individuals (and their advisors)’. www.stennerinvestmentpartners.com (Thane.Stenner@RichardsonGMP.com). The opinions expressed in this article are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Richardson GMP Ltd. or its affiliates. Richardson GMP Limited, Member Canadian Investor Protection Fund.

 

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