A new study from U.S. Bank has found that 82% of wealthy millennials and Gen Z have had a financial adviser help their family with uncomfortable conversations about money, a percentage nearly twice as high as their wealthy older counterparts.
Among surveyed wealthy individuals from the Gen X, boomer and silent generations (those born between 1928 and 1945), just 45% said a financial adviser has guided their family through uncomfortable financial conversations. U.S. Bank surveyed 1,000 individuals in the general population, 1,000 individuals with at least $250,000 in investable assets and 500 high-net-worth individuals (at least $1 million in assets.)
U.S. Bank executives hosted a media event last week in Manhattan to discuss the study’s findings and other family wealth trends, such as delayed inheritance of trust funds.
“I do think overall, trusts are becoming higher in age to inherit. You don’t see an 18-year-old coming into a good amount of money; you see it at 30, 35, 40 — or if there’s a life event like when you get married or want to buy a house,” said Beth Lawlor, president of private and affluent wealth management at U.S. Bank.
“There are stipulations on it because the parents or grandparents earned the money, and they feel they have the right to dictate when the money gets transferred.”
The study also found that U.S. parents would rather discuss politics with their children than family finances. Among parents surveyed, 76% prefer to talk with their kids about their voting choice for the 2024 presidential election, rather than discuss their financial situations.
Tom Thiegs, a managing director who specializes in working with ultra-high-net-worth clients at U.S. Bank’s Ascent Private Capital Management, advises ultra-wealthy families to begin acknowledging their wealth with their children when they are as young as 5 to 10 years old.
“At that age, [children] will start getting signals and have to field questions from friends that say, ‘Oh, your family’s name is on this building,’ ” Thiegs said. “If that’s the case, then you should absolutely be preparing to handle those questions and those discussions.
“It’s really a balance; you don’t need to disclose every dollar figure, but those families should be preparing those kids to interact in a world where others might know some things about their family.”
When operating a family office, younger generations are more inclined to outsource tasks related to duties such as IT, property management, bill paying and financial reporting.
“Oftentimes, what we have seen is that younger generations are interested in outsourcing more when it comes to the family office and not trying to keep everything in-house with one key adviser," Justin Flach, managing director of wealth strategy at Ascent Private Capital Management, told Crain Currency. “As the family office grows and as you get more generations involved, you do see a greater push for delivery of service and diversification of service.”