Preparing heirs for the responsibilities associated with their inheritance is essential for successful wealth transfer.
Families can use the topic of responsible investing (RI) as an ice-breaker to bring together multiple generations to explore the family values, and to teach about investing and working with family advisors.
- RI provides a topic to develop conversations around values and goals without putting actual dollars and cents around it.
- RI can be used to teach fundamentals of investing, how investments fit in the portfolio, and how to monitor and gauge performance.
- General discussions on asset class, research on particular investments and their impacts, and decision-making opportunities can provide experiences for the younger generation to work together.
- The diverse range of responsible investments helps accommodate various wealth levels and investment goals.
- A review of the different types of RI strategies takes environmental, social, and governance (ESG) factors into consideration.
RI can provide a way to appeal to the next generation’s hearts and minds, creating pathways to explore family values and learn the basics necessary to be successful wealth stewards and inheritors.