Mentoring for Wealth Preservation
In The Odyssey, the adventurer Odysseus charged a wise elder counselor to stay home in Greece to educate his son while he sailed the Mediterranean for extended periods of time. The coun-selor’s greatest ambition and contribution was teaching the child, Telemachus, not to follow the traditional Greek learning traditions but to think for himself. The counselor’s name was Mentor. Today, the mentor title is bestowed upon a person worthy of its special meaning. It implies that the mentor will form a bonding, long-term relationship to guide development and growth of someone less able or less seasoned or someone interested in obtaining knowl-edge and wisdom from another. The dynamic of a teaching-coun-seling relationship with a younger generation is uniquely suited to a family that wishes to preserve multi-generational wealth, especially when a family wants to preserve wealth in conjunction with family values for the purpose of passing them to the next generation.
In most family businesses, the challenging goal of building a suc-cessful, lifelong enterprise is not just to work tirelessly through difficul-ties and struggles that may result in financial security one day. The real payoff would be to have an opportunity to include a prepared family member in succession plans for the next generation. The es-sential and often-missing ingredient of a successful family-succes-sion formula is the nurturing contribution a mentor can provide. The mentor-protégé relationship must engender feelings of loyalty and commitment that are rooted in a deep, emotional connec-tion that will foster growth, development, and self-awareness that, when combined, will encourage creative problem solving and promote thinking for oneself that will ultimately result in building self-confidence in the protégé so that she or he will assume a lead-ership role in the future. A mentoring program that is viewed as a crucial day-to-day activity in a family, which is incorporated into a long-term strategic plan, is more likely to be successful.
Mentoring is a much subtler process than parenting and coaching and is usually based on an individual relationship and is thought of as influence-driven. Though the relationship is quite personal, it is not necessarily viewed as a source to provide answers for every challenge but rather as a source to provide open-ended questions with guidance toward assimilating a variety of answer choices. The goal of mentoring is the protégé’s achievement in building con-fidence and capability that will eventually inspire the protégé to assume a leadership position.
Why is mentoring the next generation important?
• It will help the protégé gain an understanding of the family wealth source, family values, and how the family may operate as a team to increase effectiveness as responsible family business leaders.
• It will help the protégé develop communication and conflict-resolution skills essential for working and co-owning with siblings, relatives, and parents.
• It will help the protégé understand unique components of being part of a family enterprise: estate planning; tax, investments, and insurance matters; and family governance responsibilities.
• It will help the protégé improve financial and business acumen to be able to make better decisions.
• It will help the protégé enhance her or his emotional quotient (EQ) and self-awareness through understanding personal strengths and weaknesses as a leader and personal impact on others.
Successful wealth planning includes a combination of heritage, financial, and estate planning that also encompasses a plan for successful continuation of a family enterprise for many genera-tions. Most of us have a desire to pass on a legacy that is more than merely financial assets. The goal is to transfer values, stories, wisdom, life lessons, and intimate family traditions, as well as family assets that may continue to generate wealth. The mentor-protégé ingredient in the long-term formula of building an inheritance can assure that the family’s ideals, values, and assets will not fade away as they pass from generation to generation.
MD Wealth Partners, Inc.: A personal wealth enhancement boutique for select clients. email@example.com. mdwealthpartners.com. 805.402.8642. Copyright © Mark Wendell 2020. All rights reserved.