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Where there’s a will, there’s a fray

Scott McCulloch is editor of Families in Business.

If your family failed to discuss hedge funds over turkey and cranberry sauce this Christmas then yours, say 'financial therapists', was a missed opportunity. Some families would rather engage in collective root canal treatment than discuss money. If the army of family business consultants are to be believed, that could be changing. Money, they say, is the last taboo.
 
Families that regularly discuss finances can avoid the pitfalls of fortune: squabbles, bitterness and, worst of all, lawsuits. An increase in so-called blended families, as a result of second or third marriages, has prompted the proliferation of contested wills. Unfortunately, trust and estate litigation is one of the fastest growing areas of this practice, say legal experts. Perhaps unsurprisingly, this has emerged in the US – a country where, it could be argued, legal proceedings are rarely a last resort in resolving disputes.
 
What to do? Gather the family, early on in life, and frequently. Once assembled, often with an estate planner or financial adviser, family members can discuss a plan for the family's wealth, from charitable gifts to savings programmes. Families that own a business can talk about a succession plan. An older couple might want to review inheritances with adult children to prevent any feelings of inequity. But talk about hard cash and people squirm.

Marty Carter, a 'financial therapist' wants to change all of that. She believes a flaw in many families is their common reluctance to discuss money. "It used to be that we didn't talk about sex or taxes, but now we don't talk about money," she says. In recent years financial planners, lawyers and the like have increasingly turned to psychologists, social workers and counsellors like Ms Carter, who specialise in working with families to confront the potentially thorny and volatile issues that surround money - the sibling rivalries, estrangements and simmering tensions - which may have quietly built up over years.
 
The key is to start soon when the family is young. The wealth management sector evolves, a host of specialist companies and banks are launching programmes aimed at the next generation. Their goal is to teach youngsters about everything from shares and bonds to business start-ups and philanthropy. Some players, like IFF in California, draw on the expertise of trusts lawyers and 'wealth psychologists' to, presumably, soothe fears about discussing money and how to manage it.

Financial advisers, too, may well consider the benefits of counselling – not receiving it, but perhaps mastering its dispensation. A disturbing anecdote currently circulating in family business circles is the one about the Wall Street wealth manager whose firm was dismissed because he could not stop the bickering within his client's family business. Had he worked his calculator to restore harmony to the family, his firm - he was assured - would be retained, even if it produced 'inferior gains'. No doubt this anecdote will have been embellished over time but, even if partly true, it is indicative of what families could really be looking for in a financial adviser. Conversely, it could be argued that the quality of soft skills among financial advisers, at least those dealing with families, cannot be underestimated as a professional asset. Money, it is said, talks. So do we, but why wait till Christmas?

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