New-Rich Seek to Avoid Raising Spoiled Brats
Updated 7:48 AM ET January 12, 2000
By Jessica Hall
NEW YORK (Reuters) - The newly minted multi-millionaires of the Internet gold rush want more from their financial advisors than just estate planning -- they want help in preventing wealth from corrupting their children's values.
In the past two years, Merrill Lynch and Co. Inc. has seen growing demand for "financial parenting" services that help with the problems some families face in dealing with sudden wealth.
"Some clients may be concerned that their children won't grow up with the sensitivities or values they had," said Susan Thomson, a spokeswoman for Merrill Lynch's Private Client Group that serves families whose assets total at least $100 million.
Merrill Lynch's family office helps these clients with everything from paying bills, to finding the best private schools or the best doctors for their children, to planning vacations.
So far, about 10 of its 50 elite clients have used the financial parenting services, but demand has been increasing as more and more families find themselves suddenly enriched by the boom in dot.com shares.
"With the growth of the Silicon Valley gold rush and the long-term bull market, we're doing it more often," Thomson said.
"Wealth can be an enhancement and a peril," said Scott Cooper, who heads Merrill's family office.
Clients want their wealth to give their children opportunities they did not have themselves when they were young.
But they also fear their children will turn into "trust-slugs," who are dependent on family money and have no incentive to follow a career, Cooper said.
"They want to know 'what's the appropriate amount of wealth to leave my children?" he said.
Merrill may work with families directly or may send clients to outside psychologists and other experts as needed. The firm also provides information on volunteering, summer jobs and other "constructive opportunities" for children.
Children of newly-wealthy parents will grow up in a vastly different socioeconomic environments than their parents and may not share the same perspective on wealth and work, he said.
Instilling strong work ethics and values in children must start at an early age and must be reinforced with a consistent message, child development experts said.
Without that effort, parents are going to be disappointed in children they see as self-indulgent, said Dr. Lawrence Balter, a professor of applied psychology at New York University and author of several books on parenting.
Balter's advice to newly wealthy parents: "avoid living vicariously through your children. If you are suddenly wealthy ... you shouldn't give your children everything you didn't have."
Parents also should make a point to show children that many people are not as privileged.
"Go to a food drive. Even if your Range Rover drives you to the shelter, at least they can help dole out food and see people in need," Balter said.
Cooper said wealthy families today are less inclined to leave large chunks of wealth to their children than in the past.
"Families continue to lower the bar on what is appropriate (to leave children) ... we see these families having heightened interest in philanthropy," Cooper said.
>>>A really responsible parent will teach their kids
>>>to set up a b2b web site, hire an investment banker,
>>>and file for an IPO. |
