The family office can play an important role in ensuring children in a wealthy family have the “hunger” and drive to succeed, and a healthy perspective about their wealth, according to Pierre duPont, a Partner with HPM Partners. “Raising children with a healthy perspective on family wealth is an ongoing process of bi-directional participation,” he believes.

Pierre duPont is a speaker at the marcus evans Private Wealth Management Summit Fall 2018, taking place in Palm Beach, Florida, December 3-5.

Why do you consider it important for families of wealth to raise “hungry, productive and compassionate” children?

There is no right or wrong way to raise children. However, I believe all children, not just those in wealth, need to be hungry for life, productive and participating in the world. Just as hungry employees help a business succeed, the same is true of children in wealthy families.

Are wealthy children more or less hungry than others?

There is no data that demonstrates this, but I believe wealth can provide influences that lead some people in the wrong direction. Instead of going out and pursuing life, they expect everything to be served on a silver platter. Not all wealthy families have this issue, but it can happen. My goal is to help people recognize the potential negative influences, so their children won’t suffer from a lack of hunger and will be able to get the most out of life.

Lack of hunger or ambition, and a sense of entitlement, are the worst things that can result from a wealthy upbringing. Parents must stimulate confidence, independence and generosity to avoid the worst.

What role could the family office play here? 

A true family office, one which has at least a handful of hired professionals who are not part of the family, can play an important role in ensuring the children in a family have a healthy perspective about their wealth. It can help make sure children are appropriately guided by parents; that they feel comfortable turning to professionals for advice.                                                                                                                  

The same is true for smaller, more “virtual” family offices that may use outside advisors. Those advisors should also be selected with an eye towards the “softer” value-add they can bring to a family.

You want advisors who can communicate well with both the younger and older generations. As the youngsters take on more responsibilities, they and the advisors in the family office can more effectively ensure continuity across the generational change.

The skills and character of the hired staff is also important. Staff and external advisors should have the family’s best interests at heart, and not be self-serving. For instance, you want an investment advisor who provides objective advice that is not driven by their products or commissions. Chosen investment advisors also need to recognize they are just one part of the family’s complete financial picture and be willing to engage with the other pieces to ensure the family office operates as a whole to support the family.

How could parents stimulate confidence, independence and generosity? What have you learned over the years?

Empower your children to participate in decisions. You might not ask them what investments to make, but teenagers or young adults can certainly be part of the discussion and this will help in their development. Whether it is a financial, charitable, staff or business-related decision, have them participate as early as possible.

At home, empower your kids at a young age and engage them in the little things in life. Give them the opportunity to help around the house and to suggest ideas. If the family is involved in charities, get their opinion on which non-profit efforts to support. The non-profit space is an easy way to get kids a little exposure and education on being helpful in the world and to living wisely with wealth.

And finally, what do you think success comes down to?

It is about looking at the family-wealth picture holistically. Doing more with wealth, more than just having it, requires many different pieces to come together. Certainly raising your family and living a productive and compassionate life is important, and to do this you need the right advisors, lawyers, investments, charitable activities, and most of all, engagement with the communities around you.

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