Morgan Stanley
  • Women Financial Advisor Forum
  • Mar 30, 2020

The Two M Words:
Money and Millennials

Lori Sackler shares how hiring the right third-party professionals can help ensure successful familial financial talks.

In the eighth part of the “M Word” blog series, Lori Sackler, Family Wealth Director, Senior Vice President, Sr. Investment Management Consultant and author of two books, “The M Word: The Money Talk Every Family Needs to Have about Wealth and Their Financial Future” and the “ M Word Journal: How To Have the Money Talk,” shares why hiring the right third-party professionals is critical to having successful financial talks and keeping your money and family relationships intact. Given the current health and economic crisis we are facing, it is critical more than ever to open the lines of communication, reexamine your financial plans and make sure you have the right professionals in place.

Professionals can play an important role in your family’s “money talks.” As John Harington, an English Courtier (under Queen Elizabeth I), author and translator from the 16th Century states, “from your confessor, lawyer and physician, hide not your case in no condition.” Harington is clearly highlighting the importance of fully disclosing details to the professionals you work with. In this current modern world of wealth management, I would include your accountant and Financial Advisor as well as other important third-party professionals as needed (family therapist, health care manager, etc.)  These professionals can be helpful in assisting with important money talks with family members around various issues that need to be addressed, particularly as we deal with the current crisis.

Financial Advisors are necessary when money is at stake. Individuals and families with assets need to engage professionals; if they do not, they run a much higher risk of losing money and experiencing a failed transfer of family wealth. In my book, “The M Word”: The Money Talk Every Family Needs to Have About Wealth and Their Financial Future,” I provide examples of individuals and families who did not engage the right professionals and, as a result, experienced significant loss of family assets and trauma to family relationships.

Luckily, more and more people are beginning to understand the benefits of working with advisors and having a team of people they can rely on. However, there are still those who are reluctant to turn to a Financial or Legal Advisor for help. There is no single reason why, but fees can be a reason. Also, many people who have been successful in their own profession or career believe that their intelligence and expertise in one field gives them the knowledge and wisdom they need to do their own financial planning. Unfortunately, those who try to do so without professional financial guidance run the risk of serious potential consequences for their loved ones if they do not get the proper counsel.

There are several different considerations to take into account when selecting your advisors, including major professional designations such as CFP, CPA, Investment Advisor, CIMA., etc. You want to make sure that you also choose the right accountants and estate planning lawyers. Devising  a list of questions you can ask professionals when you are selecting or reconstituting your team is extremely important. Make   sure the professionals ultimately  are  compatible with you and that they have the right character, chemistry and relevant expertise experience for your particular “case.”

How does all this relate to millennials and the money talk? First, millennials are clearly staking out their place in the family unit, the work force and the economy as boomers retire and move on. Additionally, millennials are currently the largest segment of the work force (source: Fact Tank, Pew Research Center,  April 11, 2018) and are creating their own personal wealth. In order to transition wealth successfully to the next generation, boomers are better served by reaching out to the next generation and engaging them in talks early on.

There is a 70% failure rate in transitioning wealth (source: “Preparing Heirs” by Roy Williams and Vic Preisser) – the primary reason is a breakdown in trust and communication. If you want to be a success story and preserve your assets and family relationships, you’ll want to have these conversations sooner rather than later. As for hiring professionals to help with the talk, I argue that the money talk is filled with emotional charge and is best achieved with outside help that you trust, which I illustrate in my book. In an ideal situation, the lead professional coordinates with the other family counsel and helps ensure that all the issues are fully vetted, the financial and estate plan is updated and the right parties to the transition are engaged in the conversations and informed.

Family meetings are typically a good format for these discussions. And the advisor, who takes the charge to lead, must have the requisite abilities, including good communication skills and a strong understanding of the issues and the parties involved. This is not an easy ask, but necessary for a successful outcome.

In my next blog, I’ll help you understand the need to create your own format and process for these money talks. I’ll also share why repeated conversations can ultimately create the best financial and estate plans to help ensure your family relationships and wealth remain intact as you experience life transitions.

About the author: Lori R Sackler is a Financial Advisor, Family Wealth Director and Senior Vice President, at Morgan Stanley Wealth Management and author of the M Word: The Money Talk Every Family Needs to Have About Wealth and Their Financial Future (McGraw-Hill Education, undated 2016) and The M Word Journal: How to Have the Money Talk (2016).