In a particularly competitive job market, employers are working hard to sift through the top talent, especially for entry-level positions, while many college graduates and early-career professionals are looking to find their place in the corporate world. According to the American Association of Colleges and Universities, fewer than half of employers think college graduates are “very well prepared” with the skills they need for career success. Only 62% of employers believe that most or all college graduates possess the knowledge and skills needed to succeed in entry-level positions.

How does this impact financial advisors? There are complex dynamics that arise when ultra- high-net-worth “UHNW” clients with family businesses hire their children for entry-level roles, regardless of their preparedness.

It’s natural for family business owners to want to bring their children into the fold as soon as they finish their education. However, hiring ill-equipped candidates due solely to familial relations can negatively impact a business, and in turn, broader financial plans. Clients’ children need preparation for a smooth transition from academia to the professional world. Understanding the expectations and demands of the workplace, as well as building a foundation for skills necessary to the role, can reduce the learning curve, improve performance on the job, and ultimately benefit the family business overall.

This is where financial advisors can come into play. Encouraging clients to explore career-building opportunities for their children before they dive headfirst into the family business can set a strong foundation, benefiting the family’s financial plan for generations to come.

The Intersection Of Lifestyle And Financial Success
While financial advisors help manage the finances of a family business, what we call “lifestyle advisory” services play an equally important role in the future of clients’ estates. Lifestyle advisory services cover more personal components that are also critical to the success of the family, including unique needs like home advisory, personal security, private health and more. For family businesses, this can include formal career counseling for family members in the early stages of joining a family business. These services address both the needs of the client as an employer who is navigating the challenges of the talent landscape, as well as the client’s child during an important time as they both kick off their career and establish a role for themselves within the family business.

While it isn’t a financial advisor’s role to offer these services in-house, a network of resources that you can defer clients to shows that you have a finger on the pulse of the needs of individual family members. If the client’s family governance structure gives each family member a clear role, they will want to have confidence that each individual is equipped to handle that responsibility. Financial advisors can serve as the connective tissue between the client and the career counseling service provider. This is an opportunity to demonstrate the value proposition of having a financial advisor who is personally connected to the family and understands that wealth management goes beyond numbers.

Direct Impact On Financial Outcomes
The importance of setting up children for success becomes increasingly important when estate planning involves multiple generations. Career counseling can help prepare clients’ children so that they are properly set up to take on responsibilities within the business and carry out their family’s legacy in the way that your client intends.

A lack of preparation for the child can lead to family disputes, which may risk jeopardizing the future of the business. Financial advisors should talk to their clients about their long-term goals and how their children will grow into these roles, asking questions such as: Where are there gaps? Is the client confident that their children understand the family’s values and mission? Unifying the family so that there’s internal alignment on roles, goals and objectives will help lay the foundation for what resources, like career counseling, are needed. 

With Gen Z set to surpass the amount of baby boomers in the workforce in 2024, we expect to see more clients’ children or grandchildren entering the workforce via their families’ businesses. By talking to your clients about their lifestyle advisory needs, financial advisors can help empower family members to utilize resources that will help them fulfill their roles within the family’s business and estate plan in the long-term.

Jerry Garner is senior lifestyle specialist for Morgan Stanley Signature Access Lifestyle Advisory.