Financial Parenting
Merrill Lynch & Co. knows that
raising kids can be tough. That's why the U.S.-based brokerage house
offers wealthy families "financial parenting."
The service is designed to ensure the
offspring of millionaires grow up to be productive members of society
rather than trust fund babies that haunt New York's society pages.
The fee for the service is generally
included in the parents' financial management package -- typically 3.5% of
their net worth.
It includes psychiatrists,
psychologists and other services the child needs to combat alienation and
depression.
The children are offered a basic
education in investing, field trips to hospital cancer wards (designed to
force them to think about those less fortunate than themselves) and
guidance in how to choose after-school activities that look good on a
college application.
And, if the child happens to cave to
the pressures of his lifestyle, Merrill's Family Office Group will find
him a good drug treatment program.
BMO Harris Private Banking, the arm of
Bank of Montreal that caters to affluent clientele with more than $500,000
in liquid assets, has also established a family education program.
BMO Harris clients and their offspring
can attend seminars in its "salons" on such topics as
"Holding an effective family meeting" or "Security and
privacy concerns in the wake of Sept. 11th."
These services are part of a growing
trend in the private banking field as firms are finding they need to offer
more than investment advice to keep their customers satisfied.
"Our clients get enough calls from
money managers who just want to manage their money," says BMO Harris
executive managing director Graham Parsons. "They're sick of
it."
According to Mr. Parsons, BMO's
programs go a step beyond what Merrill Lynch is offering south of the
border. "[Merrill] says, 'OK, your dad has $50-million. How do we
keep you motivated to go out there and be productive?' We try to get the
children involved in the actual business planning."
The establishment of a charitable
foundation is one way to bring in the younger generation. "Once the
family business is sold, a lot these families stay together around the
family's private foundation," says Mr. Parsons.
"It's important to get the kids
involved in choosing the charities the foundations will give to. And then
you can say to the son or daughter, 'By the way, maybe you should do some
work for these charities as well.' We find it's a way of keeping a family
together, while also giving back to the community."
"More and more clients are telling
their wealth manager, 'I wish I could get some financial education for my
spouse, or for my children,' " says Jeff Marsden, at Taddingstone
Consulting Group in Toronto. "And so many firms are responding to
that need."
For his part, Mr. Parsons says BMO
Harris' salon program has been a roaring success.
"We had 29 families attend the
first salon in Toronto. They learn about the topic, but also to share
their own experiences. Some said, 'We haven't had a family meeting in
three years,' while others were saying, 'We established a private
foundation and it's kept the family together.' "
And while the salons offer helpful
financial advice, perhaps their biggest appeal is their ability to give
the wealthy a sense of community.
"The number of business cards
exchanged at these salons is just incredible," says Mr. Parsons,
"We've created a bit of a network."
- Financial
Post
