Helping Families Sustain Wealth Across Generations And Manage Its Impact – Financial Advisor Magazine

Jill Shipley is Managing Director, Senior Advisor, and Head of Family Governance and Education at Tiedemann Advisors. She Jill helps families sustain wealth across generations and manage its impact. She has over 20 years of experience and expertise in family systems, preparing next generations, communicating about wealth, navigating family enterprise transitions, family and business governance, and strategic philanthropy.

Russ Alan Prince: What is your role at Tiedemann Advisors?

Jill Shipley: As the head of Tiedemann Advisors Family Governance + Education Practice, my focus is on helping clients navigate the opportunities and challenges that come with wealth, striving to ensure the impact of the money is positive for individual well-being, the family system, and the community. I facilitate multigenerational communication, prepare family members for their current and future roles and responsibilities, design governance frameworks to enable shared decision-making, and help families and foundations engage in values-aligned, purposeful philanthropy.

We are a global firm supporting our clients in optimizing the long-term value of their assets to generate sustainable financial returns with a net positive impact. We believe money is a tool and strive to uncover how it can most effectively be put to work to accomplish clients goals in alignment with their values.

Prince: How do you think financial advisors need to plan for the upcoming largest wealth transfer in history?

Shipley: The greatest wealth transfer in modern history has already begun. Wealth is being transferred from Traditionalistsover age 77and Baby Boomersage 58 to 76to Gen Xage 42 to 57, Millennialsage 26 to 40, and Gen Zage 25 to 9.

Women, in addition to building wealth on their own, will statistically outlive men by 3 to 5 years, meaning they will be the initial benefactors of a sizable share of the wealth transfer. By 2030, American women are expected to control much of the $30 trillion in investable assetsa potential wealth transfer that approaches the annual GDP of the United States.

In addition to wealth transferring to women and the rising generation, trillions of dollars will be transferred to philanthropic vehicles and charitable organizations.

One of the most important things financial advisors can do to plan for this transfer is to ask their clients the question why? What is the purpose of the wealth? The Great Wealth Transfer is occurring because clients have more financial resources than they will spend in their lifetime. Advisors should help clients think about their goals beyond more. Ask, What do you want the money to accomplish during your lifetime and after you are gone? Whom do you want to benefit, and in what ways?

Advisors should encourage clients to engage in a discussion about their values, goals, and plans with whoever will be impacted by their decisions. I have far too many examples of inheritors who are unprepared and filled with resentment and confusion about decisions that were never explained until it was too late.

In addition to guiding the current wealth holder, professionals need to build authentic, trusted relationships with all members of the family. The preferences and priorities of women and the rising generations often differ from traditional senior males. Advisors have a responsibility and opportunity to explore how each individual defines success, focusing on individual and collective well-being.

Prince: Do women have unique needs when it comes to their financial and estate planning goals?

Shipley: Generalizing an entire genders needs and acting off assumptions is a mistake. That said, injustices that have occurred over the last century have had an impact that cannot be denied. Women have had significantly less freedom, decision-making power, access to opportunity, and financial independence than males. Today women are a driving force in the global economy, but we still do not have gender equality. While it is important for financial advisors to not treat women as a homogeneous group, we can learn from research and experience about current preferences and priorities.

Traditionally, women have played the role of Chief Emotional Officer in the family. Today, many are also the Chief Executive Officers at home and work. Women express that they want a financial advisor who focuses on both the quantitative and qualitative aspects of wealth. They seek advisors who cultivate relationships, not just complete transactions. Women tend to be more interested in and comfortable talking about how money can impact identity, relationships, and well-being.

My experience is that both men and women express care and concern about the implications of significant wealth on children and grandchildren. Women of the baby boomer generation are more likely to have been the primary parent in raising children and today express a desire to be more involved in estate planning decisions that impact the next generations futures. Wealth managers need to encourage inclusivityideally including both parents and mature children in transfer planning discussions.

A difference between men and women in regard to wealth is that for women, wealth is a source of empowerment that enables them to achieve goals, security, self-reliance, and independence, and for the most part, it is less of a measure of success, social status or source of power relative to men. Women are less likely than men to be concerned about leaving a legacy, focused more on leaving their family and the world a better place.

A 2022 study found nearly 9 in 10 women believe money is a tool that can be used to help achieve their purpose. This is reflected in the fact that 94% of women were involved with charitable giving and volunteering over the past year.

According to a recent report from BCG, Women are more than twice as likely as men to say it is extremely important that the companies they invest in integrating ESG factors into their policies and decisions. Women and the rising generation are driving the shift away from risk-based portfolio construction to outcome-based planning across multiple dimensions.

The concept of gender identity, the role of women, and the definition of family are evolving. Today less than 40% of American families are a heterosexual married couple with children. Women are starting, and running businesses and men are stay-at-home dads. Thirty-one percent of families are couples without children. Wealth managers and estate planners need to continue to evolve solutions that align with the needs of individuals, single parents, families without children, blended families, LGBTQ families, and much more.

Financial advisors need to build and customize solutions that meet each client's unique needs. It is our responsibility to uncover each individuals values and goals and provide strategic advice in alignment Trends, and research can be informative, but priorities and preferences are constantly changing. Wealth management firms have the opportunity to enable greater inclusivity, diversity, justice, and equity in our talent, our leadership, our client base, how we approach client relationships, our involvement in our communities, through philanthropy, and in our impact investing solutions.

RUSS ALAN PRINCE is the Executive Director of Private Wealth magazine (pw-mag.com) and Chief Content Officer for High-Net-Worth Genius (hnwgenius.com). He consults with family offices, the wealthy, fast-tracking entrepreneurs, and select professionals.

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Helping Families Sustain Wealth Across Generations And Manage Its Impact - Financial Advisor Magazine