Practitioners don't appear to be particularly worried about whether social media is a major barrier to families communicating enough.

Wealth practitioners don’t seem to think that social media is mainly the reason why grown-up children and their parents today don’t chat enough about inheriting wealth and philanthropy. Nevertheless, it appears that families do have a communication problem.

A few days ago, two separate reports on inheritance and philanthropy suggested that families are not communicating. At the same time, the air is thick with commentary about how social media is in fact “anti-social media”. 

For example, in his recent book, The Social Media Upheaval, University of Tennessee law professor and famed Instapundit blogger, Glenn Reynolds, argues that these platforms have become toxic and people need to figure out how to adapt and remain mentally healthy, much as urban dwellers had to do when they were confronted with outbreaks of contagious diseases like cholera. When people moved into cities, living close together rather than in small hunting groups, they weren't prepared for the new situation. (Professor Reynolds, more controversially, argues that platforms such as Facebook should be broken up by anti-trust authorities because their monopolistic status is also part of the problem.) It is easy to see why there are concerns over “twitter mobs” and the “echo-chamber” effects of people using platforms all the time. The very language used to describe social media conduct sometimes sounds more like descriptions of viruses.

In any event there is plenty of evidence that families are not talking enough, even though we live in an era where everyone is, according to the standard narrative, supposed to be more open about their feelings and thoughts than would be the case with, say, those allegedly buttoned-up Victorians.

Key Private Bank, the Cleveland, Ohio-based firm, recently reported that HNW parents are not discussing philanthropy enough. It found that one-third of advisors cite lack of child involvement and one fourth pointed to parents not being sufficiently open. The Merrill Center for Family Wealth, meanwhile, produced a white paper showing that an alarming six in 10 wealthy families have no process or structure in place to ensure that they communicate family wealth decisions effectively. At a time when trillions of dollars are due to be transferred to younger adults, the stakes for not making the right decisions over transfers are huge. (The Merrill Center is part of Bank of America.)

With all the worries out there about how technology might be making people anti-social and self-absorbed – the “iGen” phenomenon – should social media be put on trial for being at the root of poor family communication?

Anne Marie Levin, director of family wealth consulting at Key Private Bank, doesn’t think so, although she does not dismiss the idea out of hand. 
 

“Parents are not aware of the importance and benefits of communication about such important issues and the risks of not talking about such issues, so in our busy lives it becomes less of a priority,” she told this news service. “Parents don’t want to talk about money; their parents didn’t talk to them about it; so money talk makes them uncomfortable. Parents don’t want to share financial information with children. They fear the effect it will have on them, and don’t want them to share this information with others,” she continued.

Another problem is that “parents don’t know how or when to start the conversation”, she said. 

“A problem is that parents are concerned about the effect that an inheritance will have on their children and grandchildren: will it do them more harm than good, will they be good stewards of the family wealth so that future generations will have the opportunities that money offers, will the inheritance affect their incentive to be productive members of society? They are also concerned that their philanthropic legacy will be lost when they are gone. But they don’t know how to address these concerns,” she said. 

When this publication spoke to Matthew Wesley, co-author of the report on inheritance at the at the Merrill Center for Family Wealth, he also said that not knowing how to start a conversation was a problem for families.

Judging by FWR’s enquiries, there does not yet appear to be much concern in the industry over whether social media is a big part of the problem. Of course it may be that worries about such channels are just another type of "moral panic", but this is something that advisors and clients should watch.

As this publication has noted at its recent conferences, social media is definitely a concern when it applies to privacy and cybersecurity. The impact on behavior, meanwhile, perhaps requires more attention than it currently receives.