Perspective : Talking money with family this holiday? Start with values

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The end of year holidays brings many families together. I think that’s a good thing, for all the obvious reasons, but I know perfectly well that some people approach family togetherness with some trepidation, because it can set the stage for uncomfortable conversations about family dynamics, politics, beliefs, and money.

But what if I told you that this might be the perfect time to talk about family money? As CEO of Frontier Asset Management, I spend a lot of time thinking about where money is invested, what impact those investments have, and how the wealth generated affects the lives of investors. I encourage everyone who works at Frontier to see these investments as more than just numbers, and I think investors and their families should do the same.

During the holidays, families have time together that they might not enjoy any other time of the year. Between Thanksgiving, religious holidays and the new year, it’s also a time when people are in a mindset of gratitude, generosity, the future, and what really matters in life. If you can focus on that spirit, the holidays might actually be a perfect time to talk about family holdings, inheritance, and the legacy created by the family’s money.

Before you begin: Do’s and don’ts of talking money with family

There are a lot of big questions to ask when talking money with family, but it goes without saying that this is a situation where how you communicate is as important as what you communicate. I’m not telling anyone to drop a bomb about who is out of the will at a holiday meal.

So here are some ground rules if you do decide to talk family finance this season:

  • Do be respectful: Everyone around the table (or living room) is an individual, with their own life experiences and goals. Acknowledge and respect that. Know their convictions are as strong as yours, even if you have differences, and aim to find common ground.
  • Don’t go in trying to change anyone’s mind: If you go in thinking first about what you want to say, you’re doing it wrong. Focus on what you want to ask and learn about the interests and goals of others.
  • Do your research: This isn’t a conversation to have on a whim. If you are initiating the conversation, know what you want to talk about and what assets are being discussed. And while your goal shouldn’t be swaying the opinion of others, you can lead the conversation in how you express what is important to you.
  • Don’t expect to resolve everything at once: Plan for a series of conversations. The holidays are a good time to talk face to face, but with a lot going on, don’t force decisions or issue ultimatums. Start the conversation, gather insights, then plan to regroup later.

How values can guide financial conversations

Whether you are talking about how a family’s portfolio is invested, how money will be passed down, or planned giving and philanthropy, I firmly believe that it’s easier to start the conversation by focusing on values. What are your family’s values? What purpose does money serve in the world, or in your family? How can that be reflected in the decisions you make?

Here are some jumping-off points for this important conversation:

  • What your family values for its members: Thinking about how money impacts the lives of those closest to you can guide the conversation. Is education a key goal? Home ownership? Comfortable retirement? Raising a family? Each of these can guide how money is invested, distributed and used.
  • What change you want to see in the world: If family members hold common convictions, you may want to direct your investments towards companies that are working towards positive change, or avoid companies that contradict your family’s values. There are many options. Frontier Asset Management offers faith-based strategies, and many firms offer funds with social or ethical guidelines. Just do your research to understand what you are getting.
  • The legacy of a family’s money: Giving to worthy causes, whether through planned giving or tools such as donor advised funds or foundations, provides a way to leave a direct legacy with your money. Again, look for common ground.

In each of these cases, be ready to think long and hard. Some of the answers aren’t obvious. Leaving money to the next generation may enable their success, but too much unearned inheritance has been known to throw some people off track – it can even be seen as a curse to the recipients. Investing in environmental technology may seem a way to express values, but if that technology is manufactured by forced labor, it may not live up to a family’s values on the humanitarian front.

Taking ownership and responsibility

My own grandmother was my first teacher about investing. She bought individual stocks with extra cash, and held them for years. She followed the companies closely, knew them well, and monitored their activity. When she wrote her will, she split the shares among her children – not the value of the portfolio, but the individual stocks. She gifted her family the relationship she had with those companies.

Many people today lack that sense of ownership and responsibility for where their money goes. My grandmother understood that the next generation would do what they wanted with that inheritance, but she still felt it important to hand down that legacy of knowing what impact money has in the world.

This holiday season, you can do the same. These might seem like hard conversations, but if you can talk respectfully about values and seek common ground, it may be the greatest gift you give yourself and your family this year. I wish you well and hope you have a wonderful holiday season, however you celebrate!

The views expressed represent the opinion of Frontier Asset Management. These views are subject to change and are not intendedas a forecast or guarantee of future results. This material is for informational purposes only and is not intended as an investmentrecommendation. Exclusive reliance on the information herein is not advised.

ESG (Environmental–Social–Governance) Investing Risk: The analysis of ESG issues is integrated in our investment process for our Faith-Based (FB) strategies. This means that we consider the risk/return implications of ESG issues when making or evaluating FB investments. We manage our FB strategies with ESG constraints determined by Frontier. We utilize data and screens from third-party service providers in connection with applying the constraints. FB strategies are subject to ESG guidelines and restrictions and could underperform accounts invested in a similar strategy without the same restrictions because the ESG guidelines can force a portfolio manager to avoid or liquidate a well-performing security because it does not meet the ESG criteria.

Frontier Asset Management LLC is a Registered Investment Adviser. The firm’s ADV Brochure and Form CRS are available at no charge by request at info@frontierasset.com or 307.673.5675 and are available on our website www.frontierasset.com. They include important disclosures and should be read carefully.

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