ELITE ADVISOR BEST PRACTICES
Eradicating Entitlement - Part Two
How advisors can help clients remedy silver spoon syndrome.
By Randy Fox and Gary Shunk
- Getting affluent children involved in philanthropy can be a great remedy for entitlement.
- Sometimes an intervention is the only way to interrupt the endless cycle of entitlement and privilege.
- Governance is really about shared family decision-making.
In Part one we discussed root causes of entitlement and “trustafarianism.” Here we’ll explore proven remedies.
RF: What about the remedial side, Gary, that once the kids are older and they realize their station in life and they realize they’re going to be big inheritors or they’ve already been big inheritors and they’re just acting as if that was their right and privilege? How do you correct a situation that may already be out of hand?
GS: In some families, children have had access to credit cards and have maxed these cards out. The parents pay off the cards, and this perpetuates the problem, developing a sense of entitlement. Sometimes the children don’t even know the parents are paying off their credit card debt. When I say “children,” it could be 50-year-olds. They don’t even know how much is on the card because they just go and use it without consequences. If they don’t have limits, they will continue to spend.
What is often necessary is an intervention. How do we do an intervention that is respectful but also firm? Maybe not all the family members are involved, but at least one or two are. It is important for them to come together and talk about how uncontrolled spending impacts each other. There is some emotion there and some anger and typically some anxiety, which equals uncertainty. The way for families to name that and to talk about it together in a constructive way is through an intervention. The intervention interrupts what’s going on, because without the situation being interrupted, there are no consequences and the problem continues.
Governance is really about shared decision-making. In this instance, it’s about how we decide together to spend and use the credit cards or use the family homes or whatever else it might be that the family shares.
RF: Yes, often this behavior is enabled for such a long time that it’s hard to put a stop to it, and so sometimes there is no way to stop it.
GS: Sometimes it’s multigenerational. When a family finally says this may be overspending or entitlement, which is a sense of self- righteousness, of abusing what the money is, what the wealth is in the family and is then confronted and named, then we can work with it. It’s not easy, but it’s definitely a great first step.
RF: You earlier mentioned families’ joint philanthropic efforts. Have you seen a big impact that giving has on a sense of entitlement, almost a humbling?
GS: I think that’s very well put—that sense of humility. The idea of spend, save, share. A family can accomplish a lot when it starts to have conversations about sharing what they have. They often end up talking about their values and what it is that matters most to them. It might be the environment. It might be hunger. When they start to talk about those things in family meetings, then what I invite them to do is to talk about what’s rooted in why they care about that. Why does that matter to them? And when individual family members start to talk about that, then they get to the real core values, and what I’ll do is help a family name what those core values are and then define how else those core values play out in their lives. Also how else do they maybe violate some of their core values? Perhaps an entitlement issue can be addressed this way. If they violate it, do they want to continue to violate it or do they want to have a different relationship with that core value? Sharing and charitable giving are great ways for individual members in a family, but also a family collectively, to address, reconcile, name and move in a different direction with the relationship with their wealth. Philanthropy ends up being a great vehicle to talk about what they have, their values, etc. It even impacts them around spending and investing and how they save.
One family I serve started to discover philanthropy individually and also collectively. Several of the family members in the third generation ended up realizing that instead of taking their vacations together, which cost this much, they preferred that their vacation money be given to the cause that they all cared about. That was a way for them to be united around their values and then also be impactful in the world, and subsequently they took another vacation that was not as expensive and they felt really good. Feeling good is a nice thing, but they really were ultimately impactful in culture. That was really a boon to who they are, individually and as a family.
RF: It is really to reiterate that each of the individuals had his or her own vision of what they wanted to give to but they also did something in unity. So you can have different values within a family. Often the younger generation wants to go in a different direction than their giving parents do. In fact, they might be in total opposition to one another. And there has to be a way to honor that to make it work, and it’s also nice to add in unified family elements so that they’re doing something together as a family in harmony.
GS: There are colleagues of mine who worked with a family in which I believe the third and fourth generations currently are the leaders. The wealth creators were their grandparents and great-grandparents, I believe, who created a family foundation. And the foundation was focused on a particular medical issue. By the time the foundation was in the hands of the grandchildren, the illness had been eradicated through the family’s investment and charitable giving to research. The third and fourth generations had to think about what to tackle next, which is really a great sense of legacy. They get to create that now and pass it on to the fifth generation.
RF: Yes, I see where you’re going.
GS: When families come together and they talk about what matters to them and the charitable causes they care about, it is phenomenal.
RF: So those are families that have dealt with the entitlement issue and somehow came to harmony, it sounds like.
GS: Right, right.
RF: Let’s circle back and wrap up this discussion for a final look at entitlement and what it means.
GS: Families of wealth are concerned about their kids’ feeling entitled, because ultimately entitlement isolates heirs. Individuals who are entitled are also isolated. That means they become self-absorbed and cut off and they don’t do well in relationships. Therefore, their primary relationship is their dependency on the money, on the trust or whatever it might be. You don’t have a mature, self-reliant person. That creates a lot of anxiety and worry.
The idea of naming if there is entitlement allows us to begin to talk about what we’re going to do with it, and keeping it in that simple philosophy of spend, save, share as a beginning when the kids are young or even when they’re adults, and bringing in conversations about what we are doing. What does our money mean to us? How are we in relationship with it? For families to address these things and get some help from their advisors, to do that can turn around an overly entitled family or set the course on a good path when the kids are young.
RF: A good and healthy relationship.
GS: A good relationship with their wealth in a positive and mature way.
RF: Great, Gary. Thanks.