Pitcairn Update, January 2016
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It’s safe to say that most families want to successfully transfer their wealth or family enterprise to the next generation. Unfortunately, a very large percentage of wealth transfers fail, often because of ill-prepared heirs or a breakdown of trust among family members. We at Pitcairn believe in a three-fold solution for successful transfers: one part education/mentoring, one part planning and one part family decision-making. To help families follow this “recipe,” Pitcairn is focusing on family money and wealth education.
Education is a topic of significant importance and concern for the families we serve and for families of wealth across the country. At the annual Pitcairn Family Wealth and Investment Forum, 94% of participants in our education session said family education was extremely or very important to their family. Even more telling is their assessment of current education efforts. Only one-third thought they were currently effective or very effective in meeting their family’s educational needs.
In response to this great need, Pitcairn is developing a conceptual framework for family financial education. We asked attendees at our client forum to share their life experiences to help guide our efforts. To open the interactive session, Rebecca Meyer, managing director of client strategy, summarized Pitcairn’s research on financial literacy and reviewed our education work with families. She noted that in today’s world of instant internet access, information is easy to come by, but only when Knowledge is anchored to Values and Behavior can families truly achieve the outcomes they desire.
We asked attendees to think about how they had formed their feelings about money – what were some key influences and how did their families instill wealth-related values. We also asked about their goals for financial education, how they would like educational information delivered, and what challenges they thought their own families would face. A lively discussion yielded important insight into families’ educational needs. View highlights from their discussions.
Feedback from our attendees affirmed much of what we had discovered in our educational research. Families have many goals for education, diverse needs, and multiple obstacles. We understand that a ready-made, one-size fits all “education package” won’t meet the very different needs of individual families. Instead, we work with families to identify areas where we can tailor effective solutions to meet the needs of everyone involved. If you would like to know more about Pitcairn’s education research, philosophy, and our preliminary conceptual framework, please take a look at our paper titled “Family Money and Wealth Education.”