Indulge us a little as we revisit an important topic covered in a previous post about wealth planning. We view wealth planning as the sum of arrangements to grow, preserve, protect, and transfer your wealth. It comes with legal, financial, and tax planning, but in our modest opinion, the human element for everyone involved deserves at least equal recognition. The entire process is about you and your loved ones' future and should give everyone peace of mind.
But how do you focus on the human element? This post is about some of the design tools we use for individualized human-centered wealth plans. Each situation is unique. Many of the moving parts depend on the wealth owner's family, the involved generations, the type of assets and family businesses, and their location, to mention just a few. We don't intend to provide you with an exhaustive list of tools but to introduce you to concepts that go beyond traditional financial, legal, and tax planning. This is also a call for curiosity and creativity when considering your wealth's purpose in life. Always with your loved ones at the center of your wealth plans.
It all starts with your story: it tells a lot about how you got to where you are now, which obstacles you had to overcome, and what has been significant during the journey. It may already reveal what you stand for, provide clarity on your mission and vision, and which impact you want to make. You are original, and since you are designing your wealth plan, there could be an inspiring story behind it.
Your family's story has the same potential for unique discoveries: maybe you have an ancestor known for exemplary actions and values in your community. Your and your family's story is a great starting point for defining the purpose of wealth and illustrating correlated life concepts that inspire and empower: it represents your family's heritage and culture. It captures the past, present, and future and sets the scene for wealth planning in a human context. If stories don't resonate that much with you, they may still help everyone else in your wealth plan to better connect with your point of view and link your story to their experiences. Your successors are more likely to remember your purpose of wealth based on your history and how it made them feel, rather than a static and generic definition of why it may be valuable to them.
Values are desirable, moral, and ethical character features appreciated by the community surrounding us. Values guide our actions and influence most of our beliefs and decisions. They impact our wellbeing and motivation, and their infringement can be an often-overlooked origin of discontent. Concrete values trigger prioritized thinking, behaviors, and feelings directed to our lives' relevant aspects. They can be the decisive factor towards a unified and robust community alignment in meaning and connection.
Human-centered wealth plans build on values that translate into concrete actions. Based on your story, you should be in a position to identify your most important values. Suppose fairness is one of them: it could then translate into being respectful, standing up for others, and having no tolerance for discrimination. Finally, they should translate into tangible results, such as a culture of respect and accountability.
Wondering what the values' correlation with wealth planning is? Well, we believe that they will help you understand your needs and your ideal environment's requirements. What guides you will determine what you require. And with needs, we don't mean the technical wealth planning tools but the underlying reasons for your wealth plan. We neither refer to asset protection, tax efficiency, or succession planning but to demands beyond mere technical considerations such as peace of mind, providing for your loved ones, controlling outcomes, and making a lasting impact. Such clarity will be most beneficial to design a human-centered wealth plan and will guide you throughout the entire process. If you share your story and values with your advisors, they will hopefully understand your needs much better, and you prevent them from jumping to conclusions.
The ideal environment
The environment we are in has an enormous impact on our wellbeing. When you furnish your home, there's a good chance that you have a vision of the ideal setting, draw inspiration from other houses, magazines, movies, or your spouse's wishes.
You may not easily find such inspiration for your wealth plan, but you can still define your ideal environment. Just list your worst experiences and biggest pains associated with wealth in your business, private, and financial life. The next step is to list them according to your reluctance, i.e., the immense pain goes on top of the list. You can then translate them into the opposite, and there you go with the requirements of the ideal environment for your wealth plan. To make it even more concrete, you can select the top three as must-have criteria and the following two on your list as nice to have.
The interim result
Let's take stock of what we have thus far: a story that may inspire, shift opinions, and get the beneficiaries of your wealth plan to follow your definition of the purpose of wealth. It could include milestones, challenges you had to overcome, and your gain from it. Yes, it's personal, and you may have to show vulnerability, but we are talking about a human-centered approach here. It is supported by a clear set of values that translates into concrete actions, ideally captured in your story and thus in an authentic environment. It further reflects an emotional journey and a strategy. And we have a vision of an ideal environment towards which the various wealth planning tools need to deliver in a human context and shared purpose. Your wealth plan should ultimately support your family's unity, inspire them, connect them on an emotional level, and enable meaning and culture.
Some areas deserve a more specific focus. Clarity on values and needs will lead to goal setting and a family's vision and mission. Various approaches are coming from the corporate world that build on the awareness of objectives. They have in common to imagine where you will get one day by doing things in a specific way every day. Both vision and mission strongly correlate with values, and a values statement may integrate into the family framework for guidance, accountability, and responsibility. If values, purpose, vision, and mission are embedded in your family's story, the narrative will become compelling, memorable, and inspiring.
Let us stress a point here: human-centered wealth planning is inclusive. This post is directed to you as a wealth owner, but we do not advise you to follow your own process without involving your wealth plan's beneficiaries. Only with family members' involvement, you achieve awareness and commitment to preserve a family's heritage over generations. Ensuring everyone is part of the wealth plan will empower them in many ways, and values, identity, and purpose can become their Northstar. We recommend involving third-party advisors and coaches to guide you and your family through a structured approach and overcome eventual barriers to an inclusive dialog. Finally, depending on the family size and generations, a governance framework for collaboration and communication can be designed for a comprehensive wealth plan. Then it's time to challenge it.
The value proposition
Imagine your wealth plan as a product. There's no market to challenge it, and you may not be around anymore to evaluate the final result. There are not too many chances to get things rights, and that's why a value proposition can make a difference.
The value proposition explains how your wealth plan solves problems and improves your and your family's position. In product terms, the value proposition on the customer side (i.e., you and your family) defines needs (rational motivators and the job to be done), pains (fears and undesired outcomes), and gains (wants and emotional drivers). On the product side, it outlines the experience (improvements), the features (services), and benefits (outcomes). You hit the value proposition sweet spot if your and your family's needs overlap with your wealth plan's intended value.
Let's illustrate the concept with a single family office, a service entity for a given family. If it is built merely around the founder, it may not consider the other family members' needs, and they may look for external substitute offerings to achieve their goals. Not a desirable basis for building a legacy over generations. The same may apply to any other arrangement to preserve family wealth over generations and, in particular, if a family business is involved. A value proposition offers the benefit of analyzing your family's needs, the value your wealth plan creates for everyone involved, and defining the connected meaning and message.
Human-centered wealth planning has one objective: putting people first. A variety of tools assist in designing individualized wealth plans rather than an aggregation of legal arrangements. Some of the above can be uncomfortable, reveal vulnerability, and you may even experience tension. However, it's a robust process towards unity, connection, shared purpose, and motivation. Your family members can add stunning views and inspirations, and the dialog will foster an environment of family bonding, ease, and trust. External advisors can assist and guide a family by designing and delivering human-centered wealth plans that empower family members across and over generations.
As we said, you are original, and each situation is unique and deserves a tailored approach. Shared values, vision, mission, and a family's purpose of wealth will not derive from family offices, trusts, life insurance policies, and corporate structures but an open heart and mind in designing wealth plans with your and your loved ones' wellbeing and peace of mind. Your family's collective objectives, roles, responsibilities, and governance will then follow genuinely and guide your family for the future to come.