How to Align Wealth with Family Values

How do I leave a legacy, not just wealth? How do I empower the next generation without enabling them? What’s the right way to introduce my children to our wealth? How can wealth be used as a tool to bring my family together? These are questions we often receive from our client families.

While the questions are different, the root of them are the same – an acknowledgement that for successful families, transferring values is often more important than transferring wealth. We’ve found that early discussions about values can help prepare children to steward their family wealth for generations to come.

The two most common ways our families share values with each other is through philanthropy and values-based investing. Philanthropy serves as an effective means of imparting values, as these values are often inherent to the discussion around giving. The causes you support and your philanthropic priorities provide an effective avenue to convey and instill values with your children.

Philanthropy is also a great way to introduce financial literacy. Concepts of budgeting, stewardship of financial resources, and even investment discussions around asset allocation and investment strategy can all be introduced through the vehicle of a family foundation, donor-advised fund, or charitable giving.

When engaging family members in investing specifically, aligning investments with your family values can educate and engage your children. Younger generations sometimes prefer values-based investing. A recent study found that investors aged 21-43 are more than twice as likely to consider a company’s values, the use of proceeds, and emotional connection when making investment decisions compared to those over 44.¹

When all investments have an impact, either positive or negative, integrating values can be a powerful and rewarding process to create positive change in the world. These investments can aim for market return rates or better while expressing a specific set of values. Examples could range from generating measurable social and environmental impact to socially responsible investing, where funds are selected based on ethical guidelines.

At Tolleson, we’ve found that both philanthropy and values-based investing can be great ways to bring a family together as well as introduce investment discussions with younger generations. Because these topics can be so impactful to our client families, our team guides clients through these discussions and helps them achieve positive, lasting outcomes. Working beyond simply seeking financial gains, we recognize the importance of helping families transition wealth across generations with a values-based approach.