Why wealth transfer is also a mental exercise

How do I talk to my children about money? It is a question Prof Maarten De Groot, Chair of Resilient Family Business and Enterprise Families at the VU Amsterdam School of Business and Economics, is asked daily by affluent families around the world. ‘Most families live with an uncomfortable contradiction,’ he explains. ‘Parents tell their children they are special and that success is the result of talent and hard work. At the same time, they say: be modest, do not stand out. That often leaves children confused about their identity and self-worth.’

That confusion can mean, for example, that young people hesitate to invite friends home, out of ‘luxury shame’ about the swimming pool. ‘Global research shows that eight out of ten young people from affluent families experience shame,’ says De Groot. ‘In some cases, that leads to a complete lack of interest in the family wealth—or an outright rejection of it. The ongoing pressure to appear ‘normal’, or to justify the family wealth, can contribute to low mood, anxiety and an unhealthy relationship with money.’

Children who are unsure how to engage with wealth, and parents who are reluctant to relinquish control: the common denominator is often communication—or the lack of it. ‘Talking openly about wealth can be challenging for families,’ says Stefanie Van Waes, Senior Wealth Planner at ABN AMRO MeesPierson. ‘Not because there is nothing to say, but because these conversations touch on sensitivities such as recognition, identity and a sense of belonging.’

Stefanie sees how silence can leave families stuck. Parents may postpone transferring wealth because they worry a child might not be able to manage it. Children may receive a portfolio but hesitate to act, because it still feels like their parents’ money. ‘That hesitation is understandable,’ she says, ‘but it comes at a cost. If you never learn how to deal with wealth, you cannot take independent responsibility for it either.’

Breaking that deadlock can start with a conversation. ‘Not with figures, but with stories. About your own journey with money. About what wealth meant to you, what it cost you, and what it brought you,’ says De Groot.

Stefanie applies that approach in her day-to-day work: ‘I always start by asking how the children are doing. What are they doing, how do they think, what is the relationship like? Only once I know the family do we move on to the technical questions, because even the best wealth planning does not work if the human dynamics are not right.’ ABN AMRO MeesPierson supports families on both dimensions: not only the technical side of wealth planning, but also the emotional side. ‘For example, we sometimes organise programmes where young people from affluent families talk to one another. Throughout the year, we also offer a broader range of training courses and guidance programmes, tailored to participants’ knowledge and needs. After all, great wealth also comes with great responsibilities.’