Many families struggle with conversations about money. When this includes potentially large inheritances, it can be very difficult knowing when to begin these discussions with the next generation. Do they have the skills to manage large amounts of capital? How will you help them understand this is more about passing on a legacy than money? Will your family understand the importance of charitable giving as much as you do? How do you transition wealth in a way that is beneficial and not destructive? These are all valid concerns and not at all uncommon.
Developing financial literacy for all family members is an important first step regardless of age. In fact, November is Financial Literacy Month in Canada and there are many related events and conferences across the country. As it turns out, Canada is one of the most financially literate countries in the world, according to both national and international measures, but continued development in this area is critical. Growth of personal debt and increased complexities in the financial services sector have resulted in low savings rates amongst most Canadians. In 2021, Canada launched a national strategy, developed by the Financial Consumer Agency of Canada, which is a five-year plan to create a more accessible, inclusive, and effective financial ecosystem that supports diverse Canadians in meaningful ways. Many other organizations offer free educational resources and courses on this topic. One such organization, CPA Canada, offers an annual event called Mastering Money (that will be hosted in YYC next year), an "annual financial literacy conference to learn how to improve the financial health of Canadians."
Once a strong foundation in this area has been built, a bespoke approach that goes beyond basic financial literacy is also an option. Many families like to shift the conversation and focus on other important types of capital, such as intellectual, social, legacy, and human capital.
One of the pre-eminent advisors dealing with this subject is James "Jay" Hughes, a sixth generation family member, who believes the key to success in this area is to "redefine wealth as well-being!” Jay is often referred to as the grandfather of family wealth preservation and stewardship. He has dedicated his career to uncovering how families with significant financial capital leverage all their resources to build a family that flourishes across multiple generations. Check out this short video to hear Jay speak about the five types of capital.
If your family wants to learn more about how to navigate these or other family office related topics, please reach out to the team at Viewpoint and we can connect you with our Family Office Navigation Services team!!
ABOUT THE AUTHOR
Karen is a Director of Viewpoint Investment Partners Corporation (Viewpoint) and provides advisory oversight for all compliance and financial management activities. She is also the Chief Operating Officer of Viewpoint Family Office where she provides management and strategic oversight and leads a team of dedicated professionals who ensure stewardship of private capital.
This blog and its contents are for informational purposes only. Information relating to investment approaches or individual investments should not be construed as advice or endorsement. Any views expressed in this blog were prepared based upon the information available at the time and are subject to change. All information is subject to possible correction. In no event shall Viewpoint Investment Partners Corporation be liable for any damages arising out of, or in any way connected with, the use or inability to use this blog appropriately.