Does having more wealth mean having more conversations?
An ongoing study on conversations in ultra-high-net-worth families.
At the Fidelity Center for Family Engagement, we often say that the number of zeros on a family's balance sheet doesn't change how families talk to one another.
Early data from our ongoing study of conversations in ultra-high-net-worth (UHNW) families seems to substantiate the point in part, but there are some differences to explore.
The Generations Project recently published the findings of our Later-in-Life Conversations Study .
The study explored how mass-affluent and high-net-worth (MA-HNW) individuals talk with their spouse/partner and adult children about later-in-life family and wealth transition topics.
In the survey, we presented more than 1,500 participants with a list of 14 topics and asked them to identify the topics that were most relevant to them.
We then asked them to indicate how willing they were to talk or how actively they were talking about these topics.
To understand how UHNW families may be similar or different, we launched a smaller, more personal benchmarking study with families who have more than $20 million in investable assets.
This study currently has 95 baby boomers, including 34 matched sets of couples, who have taken our later-in-life conversations survey and participated in focus groups.
This paper offers a preliminary look at what we are discovering through data and conversations.
In short, there is an overall similarity between UHNW and MA-HNW baby boomers.
Ninety-eight percent of both populations report they are comfortable talking about later-in-life topics, yet neither group is talking as much as their comfort would indicate.
But we did find several significant differences in the two groups' interests and conversations, based on their wealth circumstances.
Ten insights about UHNW baby boomer conversations around later-in-life 1.
Wealth transfer is overall the most relevant topic for UHNW baby boomers, yet it is ranked 10th in relevance for MA-HNW baby boomers.
This large gap in relevance reinforces the relationship between increased wealth and a focus on wealth transfer.
The focus group conversations largely revolved around family concerns about wealth transfer planning.
In general, legal and financial planning is highly relevant to both populations.
It was ranked as the second most relevant topic by UHNW and the top topic by MA-HNW.
But the emphasis doesn't translate into more conversations or confidence in either group.
Although wealth transfer is the most relevant topic for UHNW parents, it is also one of the topics they are most unwilling to talk to their children about.
Fear of demotivating children is a major focus when UHNW parents talk about wealth transfer and planning.
UHNW respondents are actively talking to their spouses/partners about their most relevant topics significantly more than MA-HNW participants (59%, compared with 33%).
Overall, parents in the UHNW study are talking less to their children about later-in-life topics compared with MA-HNW (with 22% of UHNW parents not actively talking about any of the topics, compared with only 12% of MA-HNW parents).
And in both studies, less than a quarter are actively talking to their children about their top-ranked topics (21% UHNW, 17% MA-HNW).
UHNW baby boomers have a significantly higher focus on their future state of living compared with the MA-HNW group.
Three topics in their top five (decision-making and change of control, dependence and dependent living, and roles and responsibilities of family members) do not appear in the top five for MA-HNW baby boomers.
Baby boomers with greater wealth have a more intentional 'succession' mindset in how they think about their future.
Planning for health and care decisions was the second lowest ranked topic of relevance for UHNW but is the third-ranked topic for MA-HNW baby boomers, indicating a different financial focus around health and care needs.
It is not surprising that UHNW respondents have completed more functional planning.
What is surprising is that their level of planning doesn't increase their confidence in having a seamless transition (61% have confidence, compared with 69% of MA-HNW).
Equally interesting, of those UHNW respondents who say they are "confident" or "very confident," 26% indicate that they believe their plans will create closeness in the family (with only 18% in the MA-HNW sample).
UHNW couples have a constant sense that they have not done enough planning and need to talk more with their family.
Consistent with having done more planning, a significantly higher number of UHNW baby boomers are sure they have named a primary beneficiary (76%, compared with 64% of MA-HNW).
At the same time, fewer are sure they have provided the necessary information to their beneficiaries (50%, compared with 56%), and neither population is overly sure their beneficiaries have been updated to reflect their current intentions (50% UHNW and 54% MA-HNW).
There are also several couple findings we want to explore further.
UHNW couples are not always aligned on what it means to be the "primary decision-maker" versus having "shared decision-making" (50% of matched couples gave different answers).
They also have different definitions of what "actively talking" means.
And they have different views on whether they are actively talking about later-in-life topics (three-quarters of couples disagree on three or more topics).
UHNW couples seem to be in a more continuous state of aligning around their planning process and intentions.
Hesitancies to talk are different in families with more wealth When we compare our UHNW focus group conversations with our MA-HNW qualitative research interviews, we can confidently say that the UHNW baby boomers have a more intense interest in later-in-life family and wealth transition topics.
But we would not say that the higher level of interest overcomes their hesitancies to talk about these topics in their families.
Unlike in the MA-HNW interviews, UHNW focus group participants did not push back or question the importance of talking about later-in-life topics right now.
It seemed self-evident to them.
And yet, while they acknowledged the need and importance, there was a significant "Yes...But" mindset around having family conversations.
We might describe this mindset as a "thoughtful hesitancy," mostly due to the amount of wealth they had.
Here's what "Yes...But" sounded like as we listened: "Yes, we should talk to our children about our planning.
I don't want to show them my balance sheet...
I don't want to disincentivize them...
I am worried about conflict around fairness...
I don't want to burden them with our planning...
I don't know what to do about the in-laws...
I'm not sure my spouse and I agree...
There are tensions in our family that make it hard." UHNW parents adopt a 'Yes...But' mindset to explain why they are not talking with their children about their wealth and planning.
Our overall thinking at this point in our UHNW study is that the amount of wealth doesn't change the fact that families have hesitancies in talking about later-in-life topics.
The survey and conversational data make that point.
But greater wealth does change the types of topics people view as important and the reasons why they are not talking about them at a given point in time.
Later-in-Life Conversations Study .
This study was commissioned by The Generations Project , a research and thought leadership initiative sponsored by the Fidelity Center for Family Engagement.
The study was conducted December 15, 2023, through January 9, 2024, via an online survey and in-person interviews by an independent firm not affiliated with Fidelity Investments or the Fidelity Center for Family Engagement.
The study was based on a random sample of 1,539 participants consisting of 784 baby boomers (born 1946-1964) and 755 Generation Xers and millennials (born 1965-1980 and 1981-1996) who were asked about their views and experiences around later-in-life conversations.