Intergenerational Wealth

How Insights About Family Dynamics Can Prevent Outflows From Your Business

Maintaining your book of business through intergenerational wealth transfers can be challenging. The secret lies in understanding a family’s dynamics.

As a financial professional, you know that losing assets during wealth transfers is a considerable risk. But meaningfully connecting with family members beyond the existing primary contact—the household CFO—can be challenging. 

Wealth transfer is a key risk for financial professionals

Wealth transfer is the number one reason clients leave

Bar graph showing 53% of client loss occurs due to beneficiaries leaving after client’s death, making wealth transfers the number one risk to client retention.

Source: The Cerulli Report – U.S. High-Net-Worth and Ultra-High-Net-Worth Markets 2021

To find answers to this pervasive issue, T. Rowe Price conducted proprietary research on family dynamics. Our research revealed that family members usually have different views and attitudes toward money. Because discussing money can be taboo, partners and children often wrongly assume that others share their beliefs. This dynamic leads to conflict, misunderstandings, and a lack of communication. 

Thankfully, the research also uncovered patterns in these divergent beliefs about money. Understanding these connections can help you engage with your clients’ families—and help you retain the account assets when wealth transfers occur. Use the Family Dynamics Worksheet to help your clients gain a better understanding of their family dynamics around money. 

As we discuss some key dynamics regarding beliefs about money within families, it’s important to note that these attitudes/beliefs exist along a continuum. While we may highlight some extreme cases, many people naturally fall somewhere in the middle.

Savers vs. spenders

Our research reveals that both spenders and savers commonly label their partners as the opposite. Interestingly, these terms appear to be relative: Even if both spouses save money, one will ascribe the label of “spender” to the other, and vice versa, highlighting this as a significant source of relationship conflict.

It’s important to recognize that certain attitudes toward money may not be inherently wrong. For example, a client who saves in excess for retirement but is reluctant to spend money on important family experiences may need encouragement to spend more freely. There can be validity to both points of view in moderation.


Intergenerational Wealth Transfer

Strong relationships are the key to addressing family wealth transfer. Access tools and resources to help secure business for generations to come.

Differing investment styles

Family members often have significantly different investment styles and risk tolerances. Surveys reveal that, in general, women value security over opportunity. However, our research uncovered that women often are interested in the family’s investments—but are reluctant to share their thoughts with their partners.

Try asking couples:

  • What financial concerns do you have?
  • What does it take for you to feel safe and secure financially?

Encourage them to answer independently. By posing these questions, you’ll learn about their individual money beliefs and help them learn about each other.

Talking about money

Roughly 50% of clients are open to discussing their wealth and financial situation with family members. The remaining 50% (especially high net worth investors) are more reluctant. While there are valid reasons why individuals may be hesitant to talk about money, misconceptions often prevent these critical discussions.

One misperception, particularly among older generations, is that conversations about money must include dollar figures—specifically their net worth. A financial professional can point out that family members need only know where to find information about their loved one’s financial affairs should the need arise.

If a client is exceptionally private, consider asking them if they might share health care directives with their children. It may increase their tolerance of sensitive conversations, ultimately leading to more candid talks about financial matters. 

Interest in financial markets

Your primary client may be fascinated by finance and the markets; other family members may not. They know talking about money and investments is important but view it as obligatory or unpleasant. To engage them, try focusing on the nonfinancial aspects of their plan—whether it’s helping them visualize what retirement might look like or working with them to create their family’s vision statement. 

Members of the same family will approach financial issues differently

Appreciating a family’s varied beliefs toward money is crucial to making strong connections

Graphic shows four lines labelled money habits, risk tolerance, communication style, and financial markets. Points for two family members are plotted along each line, showing where they fall on spectrum between 1 and 10, highlighting differences in beliefs.

While all families are unique, they often share common financial concerns and challenges. In understanding these dynamics, financial professionals can help families stay ahead of challenges, make multiple generations feel heard, and more successfully retain their clients. 


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