Setting New Year’s Aspirations for Your Family

January 27, 2023

The turn of the calendar presents an opportunity to reflect and plan for your family's wealth, in more ways than one.

New Year’s resolutions often focus on personal health and habits, but can extend to the holistic well-being of families as well—which can foster preserving and growing wealth across generations. Here is a framework for optimizing potential opportunities in the new year for your family.

Start With the Big Picture

Wealth management traditionally concerns a family’s financial capital, generally consisting of equities, fixed income, private equity, private credit, real estate, interests in operating businesses, residences and tangible assets such as art. However, a family’s wealth can consist of other types of capital, which we believe also deserve cultivation and attention:

Human capital. We believe family members constitute the most important assets on the family “balance sheet.” Each has unique gifts and experience, and each can serve as a resource to others. The compromised physical and/or mental health of a family member can significantly affect the decision-making and focus of a family in navigating its future. Focusing on members’ physical, emotional and mental well-being remains critical to many families, particularly during a pandemic. Understanding the diversity and strengths of this reservoir of talent helps families maximize their potential. Just as importantly, proactively addressing harmful behavior, mental illness and substance abuse can also protect and nurture a family’s human capital.

Intellectual capital. Families often benefit from a solid baseline of financial and investment literacy. In addition, a family’s wealth of knowledge may extend beyond financial or business topics. Many families benefit from exposure to other subjects (e.g., philanthropy) and a global perspective. Regularly sharing personal and professional lessons can accelerate the whole family’s collective learning curve. This also extends to the practical wisdom acquired by family members in a wide range of areas across generations, for example in family history and lessons learned.

Social capital. A family’s formal and informal connections within and outside the local community may also constitute valuable intangible assets—sometimes the most important ones to legacy-minded founders. Prominent families often leverage significant visibility and influence as philanthropists, community leaders and role models. A family’s positive image and reputation can benefit all of its members.

Cultivate Your Family Capital

In addition to reviewing some of the ways to help grow your family’s financial assets, you may wish to consider the following actionable steps in the new year to cultivate the other “assets” of your family:

Human Capital

Start with small steps. Prioritizing your family’s wellness can help anchor resiliency and cohesion, and position members to protect and steward the family’s wealth for years to come. Healthy habits that families can enjoy together (versus those taken on individually) have a greater chance of incorporation into daily life, and begin with the examples created by parents. Deliberate adjustments, even if minor, in sleep, physical activity, stress management and dining have the potential to inspire other household members and can also foster lifelong habits.

Regularly eat meals together. Research has shown the connection between children having frequent dinners with their parents and a decreased risk of their smoking, drinking or using other substances; it has also been suggested that parental engagement fostered around the dinner table can be a potent tool to help parents raise healthy, substance-free children.1 Family dinners can be a valuable opportunity for teens to talk to their parents, where parents can listen and learn as well. Teens who have frequent family dinners are more likely to say that their parents know a lot about what’s “really going on” in their lives; such parental knowledge is associated with decreased incidence of teen substance use. While family members often maintain busy schedules, committing to certain regular meals together, at a realistic cadence, may yield a distinct benefit.

Plan family recreation. Families that play together stay together. Whether incorporating a game or movie night into regular rituals, or gathering for an annual ski trip, these activities strengthen the neural family connections that create lifelong memories and ties. Better yet, incorporating children into vacation planning with a fixed budget can help them optimize their spending within a set framework—a critical financial skill.

Consider mentorship across the extended family. While parents often initially serve as the primary counselors to their children, their grandparents, aunts, uncles and older cousins can emerge as influential mentors as well. Wisdom can travel across family branches and generational lines, and may be accepted more readily than if provided directly by parents.

Strengthen your family’s contingency planning. While investors commonly focus on market disruptions and other external factors, internal disruption through death, incapacity and/or divorce can have an outsized and disorienting impact on the family. Our Wealth Planning Checklist can help your family navigate the shock of such unplanned events.

Intellectual Capital

Families readily acknowledge the need for educating future generations on responsible wealth management. In our view, wealth education should be a long-term process of cultivating financial awareness, responsibility and self-sufficiency.

Financial literacy entails the financial knowledge and behavior to confidently pursue individual goals. Our articles on the following topics may help family members identify areas of further interest and learning. Please connect with your NB Private Wealth team for information.

  • Finances and Budgeting for Teenagers
  • Planning in Your 20s and 30s
  • Prepare for and Identify Income Opportunities
  • How Does Your Credit Score Impact You?
  • Financial Lessons Every Adult Should Be Aware Of

Investment literacy includes the ability to understand the suitability (or non-suitability) of investments and the potential opportunities they provide. Our ongoing podcasts, white papers, blog posts and client events may broaden family members’ awareness on a wide array of topics. We urge you to visit the News and Insights page of our website regularly for perspectives.

Social Capital

A family represents more than just its financial assets and extends to its influence, impact and very reputation. Flexing social capital through philanthropy has the potential to enhance a family’s connection to its communities and society at large.

Discover Your Family’s Interests

A family conversation often begins with a spirit of curiosity. In charting the new year, you may ask family members the following questions to help focus time and resources:

  • If you could change one thing about the world, what would it be?
  • How could you make an impact in this area?
  • Where would you like to focus your efforts?

This dialogue may also provide an opportunity for you to share your own charitable giving history, to further demonstrate your values within your family.

Volunteer as a Family

Volunteering opportunities are, of course, not limited to Thanksgiving or other year-end holidays; they exist year-round, and can provide a chance to bond as a family and further develop community ties.

Doing so on a recurring basis can also help to incorporate philanthropy directly into the family's culture of giving and service.

Consider or Optimize Nonprofit Board Service

As nonprofit boards benefit from the resources and social network of its members, family members may play a significant role by serving on boards in advancing the visibility of the organization.

For those who do not yet serve on boards, family members may consider how their talents could align with the causes they care most about, and become further acquainted with organizations they know well and respect, to ensure a mutual fit.

Those already serving on boards may review their roster of commitments to see if they still want further engagement, for instance in heading a committee.

Finally, to begin the path of community engagement, younger family members may wish to explore junior board service in the areas that most interest them.

Integrate Wealth Planning Into Your Family Goals

Cultivating your family’s human, intellectual and social capital can involve spending financial capital—for education, travel, residences or philanthropy, to name a few examples. In addition, your own lifestyle may have spending peaks and valleys.

For instance, in philanthropy, you may decide to donate a certain amount now and more later, or donate now and retain a certain income stream, with the remainder ultimately passing to charity.

Our wealth planning team can model various scenarios to review and test your comfort level. We believe doing so at the start of the year, before anticipated large expenses, can enhance clarity and confidence in your family’s future.

Working With Us

At NB Private Wealth, our team of planning professionals recognizes that there is no one-size-fits-all approach, and will work with you to design a wealth plan aligned with what matters most to you. We will take the time to evaluate how to build on your current resources to support your lifestyle, enhance your wealth and fulfill your purpose. By partnering with you and your various advisors, our team can provide insight into your total financial picture and create a plan that can evolve and change as your life does.

1 “The Importance of Family Dinners 2012,” Partnership to End Addiction, September 2012; “Why the Family Meal Is Important,” Stanford Medicine Children’s Health, 2022.

This material is provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Information is obtained from sources deemed reliable, but there is no representation or warranty as to its accuracy, completeness or reliability. All information is current as of the date of this material and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Neuberger Berman products and services may not be available in all jurisdictions or to all client types. Investing entails risks, including possible loss of principal. Investments in hedge funds and private equity are speculative and involve a higher degree of risk than more traditional investments. Investments in hedge funds and private equity are intended for sophisticated investors only. Indexes are unmanaged and are not available for direct investment. Past performance is no guarantee of future results.

Neuberger Berman Trust Company (“NBTC”) utilizes the Neuberger Berman investment platform of equity, fixed income and alternative products and strategies as its primary investment option. Non-Neuberger Berman products and strategies are also available on a limited basis and generally as a complement to Neuberger Berman offerings. NBTC’s preference for Neuberger Berman products and strategies may result in incremental benefits to NBTC, its affiliates and their respective employees.

Tax planning and trust and estate administration services are offered by Neuberger Berman Trust Company. “Neuberger Berman Trust Company” is a trade name used by Neuberger Berman Trust Company N.A. and Neuberger Berman Trust Company of Delaware N.A., which are affiliates of Neuberger Berman Group LLC.

Affiliated investment products and services are available through the various investment advisers that are subsidiaries of Neuberger Berman Group LLC.

Neuberger Berman Investment Advisers LLC is a registered investment adviser. The “Neuberger Berman” name and logo are registered service marks of Neuberger Berman Group LLC.