Written by: Leon Morales
We’ve previously acknowledged behavioral diversity as a significant topic. Still, behavioral diversity within a family unit might not be what you first think of when considering the issue.
Even so, behavioral diversity is in our homes, in our families and in our intimate relationships. In fact, it remains unknown in many families and can lead to frustration and dysfunctional relationships that take years to repair.
Family diversity + behavior
And, although much progress has been made, we really haven’t even begun to scratch the surface of family diversity in the contemporary context. Just look around your neighborhood and your workplace: There are so many forms of families and family life in society, all with characteristics that differentiate them from one another.
Families can vary according to gender, ethnicity, sexuality, marital status, age, personal dynamics and more. It follows, therefore, that how each views their relationship with money will vary too. And, when you add the element of behavioral diversity – ex: relationship focus v. results focus – it can compound that element of diversity even more.
Parsing money relationships
I was recently approached by Cass, the daughter of a friend, asking me how they as a family could talk about their relationship with money given that there was a family business, aging parents talking about wealth transfer, shared investments and so much more.
Prior conversations were going nowhere. I know this family to be wonderfully diverse both in DEI terms and in terms of behavioral diversity. Let’s take a look:
- Aging parents and founder of the family business; a very successful building business known for its outstanding work building retirement villages.
- Two sons and a daughter. All are married and happy in mixed-race marriages, one in a same-gender marriage.
- Between them, the siblings have five children, all around college age.
- Everyone has an opinion. Everyone has a part to play in some aspect of the family business. None have the same view of either planning for their future or how to work with their parents to transfer their wealth.
- They have “fun” planning days at the family beach house that mostly end in frustration. Nothing agreed, ideas challenged and nothing settled.
Cass recalled that she came to me for career advice some years ago. As part of that process, she completed a behavioral discovery that addressed her approach to life, communication and career, and revealed her financial personality.
Having spoken to the family financial advisors, Cass talked to them about how all the members of her family, including the children, would benefit from completing a similar process. She believed that when each had a deeper understanding of their inherent behavior, they would also have greater insight into behavioral diversity and relationships to money in the family.
More and better information
Fast forward to today, the financial services advisory group used by the family decided to add a personality API to its existing tech stack. One that measures 500+ behavioral insights covering virtually every human habit, the way a person communicates, invests, works, and lives – their complete behavioral financial personality and relationship to money.
Each family member completed the process. According to Cass, the outcomes delivered a range of “light bulb” moments as each began to understand themselves, their relationships with one another, and their responses to the wealth management questions each had been challenged by during family planning meetings.
The family decision-making approach became more inclusive; regardless of other differences, everyone was better able to focus on building meaningful relationships. Older family members welcomed ideas from the younger generation, determined to use their maturity, life skills and wisdom to create a pathway for the family's budding entrepreneurs.
The family approached beach-house planning in a completely different way and, on many occasions, invited their advisors to join them to help underpin the family's goals and plans.
No longer were the parents seen as the key decision-makers since they were all aware of their financial behavior and personality. Other family members also were tasked with decision-making on behalf of the family. Cass says the family now has many more shared goals.
Recognizing the existence of behavioral diversity – and the money behavior that is part of it – and discovering those with the help of a reliable instrument delivers insights with which advisors create an environment where investors feel more comfortable and make better (money) decisions.
The insights include investor strengths and struggles, and communication keys. Having this API at their fingertips enabled Cass’s family advisors to use these insights to get this family’s discussions back on track and keep them there. Bonus: The family (and advisors) have the insight and skills to leverage in other areas of their lives.