In a recent article in Investor’s Business Daily, WE’s partner and director of Family Education and Governance, Elaine King, shared her approach to conflict resolution for families disputing finances. The article discusses the traps financial advisors can fall into as they attempt to resolve disagreements among quarreling family members. In an attempt to create progress, a planner may inadvertently place blame on a client or evoke their resentment. The article emphasizes the importance of planners to stay impartial and keep the focus on wealth management for the benefit of everyone involved.
Particularly, these neutralizing strategies are necessary for families that own businesses. Cohesive financial planning and investing is the best means of survival for a family business. Only 30% of family owned business survive the transition onto the second generation. Less than half of those businesses survive the transition onto the third generation. In the article, King stresses the significance of ongoing communication among family members. Continual communication among family members promotes the integration of the future generations into the family business and increases the likelihood of a successful inheritance of the family business.
King offers an example from her own experience of diffusing tension while refocusing the energy toward cohesive financial planning for a family. King mentions how she helped the family assign roles for each member to have during conflict resolution. This task gives families a plan to effectively address any financial disagreements. As a result, family bonds are maintained and supported. Conflict resolution strengthens family ties and increases family togetherness, ensuring the future success and wealth of a family.
Click here to read the full article.