Ultra high net worth families have a desire to preserve not just their financial legacies but also their values and goals for future generations. Successful families have a sense of common purpose, a unified vision and an understanding of what goals they are trying to accomplish, built around agreed-upon core values. The process of collaborating and articulating core values to create a family mission statement can be fun and thought provoking.

A mission statement is a document that helps families articulate the goals and aspirations of all family members. A 2016 report produced by Morgan Stanley Private Wealth Management in partnership with Campden Wealth Research, called “Family Decision-Making,” suggests that today’s ultra high net worth families are increasingly using democratic decision-making structures—and finding that this process helps to bring families together and helps to strengthen the bonds between parents and children. Most ultra high net worth families recognize the value of formalizing a family’s guiding principles into a concise statement, as do the advisors who work with them. In fact, this report points out that 65 percent of ultra high net worth families have a family mission statement or are developing or planning to develop one.

The process of creating a family mission statement can be meaningful and powerful, uniting many generations in participation so that the statement that emerges truly reflects the entire family and what they want to accomplish together. All family members should participate so that the statement belongs to everyone and reflects the family’s collective judgment, rather than that of the wealth creators only. With a family mission statement, the family’s culture can be passed on when the wealth creators are no longer able to supervise.

The family mission statement should identify:

1.Core principles and tenets that define the family.

2.Traditions the family wants to preserve.

3. The impact the family wants to have on society.

4. How the family’s vision and values should govern the deployment of resources.

5. The responsibilities of each family member to uphold the core values.

Many families engage their private wealth advisors to initiate the process of creating a mission statement and to organize early meetings. The wealth advisor can help align the family, facilitate difficult conversations and keep the process moving so that all voices are heard. The advisor can also help by sharing best practices, educational materials, and exercises to keep everyone involved and engaged. This process has the added benefit of helping the advisor connect with all members of the family. And, the advisor can help make sure the family mission statement is not just a document that gets tucked away in a safe or a drawer. It is important for families to buy into the family mission statement and return to it periodically to make sure they still align with their stated goals and, if not, to revise them.

At the end of the day, a family mission statement is useless if it is not used or if it does not reflect the family’s core beliefs. It is a framework for collective decision-making and is a path toward smoother generational transitions in the long run, which should complement other planning tools like succession planning, financial planning and educating younger generations. The family mission statement can be a powerful way to express who the family is and what is important to them to preserve; it can give all generations a greater sense of purpose by being involved in the formulation of the mission statement and, ultimately, in the execution and preservation of the family mission.

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Kamesh Nagarajan is a financial advisor with the Wealth Management division of Morgan Stanley in New York, NY. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Smith Barney LLC, member SIPC [sipc.org]. 

Morgan Stanley Financial Advisors engaged Worth to feature this article. Kamesh Nagarajan may only transact business in states where he is registered or excluded or exempted from registration (pwm.morganstanley.com/thevectorgroup). Transacting business, follow-up and individualized responses involving either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made with persons in states where Kamesh is not registered, is excluded or is exempt from registration. CRC 2384395 01/19