Shannon Kennedy on helping families leave a legacy
Shannon Kennedy, global president of the BMO Family Office, understands the ultimate importance of legacy planning, focusing a great deal of time on helping families begin that journey. Here she discusses how hard this process can be for some as well as her experience being a key female leader in the male-dominated wealth management industry.
For families beginning the legacy discussion, where should they start?
Legacy planning starts with purpose of wealth. What is the money for? Families’ main priorities tend to be protecting what they have, minimizing tax liabilities and maintaining their lifestyle. From there, everything that is left over is what can inform how they want to leave a legacy. Our main goal is to educate clients on the importance of building a legacy planning framework as well as understanding options for leaving their money for the next generation, community or passion interests. We try to align their purpose with optimal strategies and solutions to maximize the impact. Most important, we encourage communication with the next generation so they are prepared inheritors.
What are the key considerations in legacy planning?
Legacy planning looks different for different families; what’s important is that it best reflects the wants and desires of the current as well as the future generation. Consider not only what legacy you would like to leave behind externally — i.e., what social or market impact you would like to make — but also what the core family values and morals are that you would like to pass on to the generations to come. This can be reflected in a family coat of arms, mission/vision statement or leaving a plain-spoken family letter outlining the reasons why certain core values are important or why financial decisions were made.
Legacy planning can be overwhelming for some people. How do you help families through the emotional component of that?
It can feel like an overwhelming task for the family to establish just what they would like their legacy to look like, but that is where financial advisers and wealth planners can help. We help facilitate family meetings — mitigating tough conversations, ensuring transparency among family members throughout the decision-making process, establishing trust among all family members, helping the family understand their different learning and communication styles while always keeping the shared vision for the future at the center of the conversation.
Philanthropy is an integral part of overall wealth planning. How does it fit into a holistic picture?
It’s important to distinguish, first, the difference between charitable giving and philanthropy. Most people are more likely to be familiar with the former — writing checks to notable charitable organizations without the expectation of getting personally involved in them. Philanthropy, on the other hand, reflects an individual’s or family’s values, interests and expectations. This can take the form of establishing a foundation, being an active board member of an existing charity, reviewing grant proposals and more. Philanthropy requires more careful attention from the family or individual on how, where and what their money is being spent on.
How can philanthropy and legacy planning come together?
More often than not, the two are intertwined. Families looking to leave behind a lasting societal impact often turn to philanthropy to carry out their vision. Getting involved in philanthropy helps a family reflect their core values in their work and leave a lasting, tangible impression for generations to come, both within and outside their family.
How do you work with women on wealth planning and encouraging them to take hold of their financial future?
I have always stressed the importance of financial literacy with women and encourage them to be involved in the wealth planning and management process from the get-go. At some point, people die, get divorced, pay taxes or make big purchases, and it is important for women to understand the impact of those events to their net worth and cash flow. Women want to be heard and educated, and I have found that female entrepreneurs often look for a financial coach to help navigate business and personal decisions. A very easy thing I tell young women is to maximize as much as they can in savings — especially in a 401(k), where an employer can match, because compounding is a very powerful tool to take advantage of.
You’re a senior woman in wealth management. How do you help other women get started in the business?
During my time as global president of BMO Family Office, I have helped establish and launch the Women’s Advisory Network, which focuses on coaching, mentoring and sponsoring women private wealth advisers at BMO. I’ve also acted as a mentor to a number of young women. When I joined the workforce in 1988, I found that women were very competitive with each other, and I am so glad that has changed. We need to lift as we climb and go beyond mentorship to sponsorship.