Financial Literacy For The Next Generation with Preet Banerjee | E050

Preparing your children for intergenerational wealth.

In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award–winning financial planner, university lecturer, and writer, interviews Preet Banerjee, a Canadian financial guru who coaches the children of the affluent on how to deal with their money!

Episode Highlights:

  • 1:49 – Preet Banerjee introduces himself and what he does.

  • 3:29 – What is the common motivation of the families that reach out to Preet for his financial workshop?

  • 5:25 – Jason and Preet discuss the wide range of characteristics amongst the children of the wealthy.

  • 6:28 – Preet breaks down what his workshops look like from the inside.

  • 10:35 – Jason and Preet discuss intergenerational family wealth.

  • 13:41 – How does Preet teach individual families to determine their best course of action?

  • 17:27 – Is there a difference in children’s ability to understand financial concepts based on when the family made their money?

  • 19:54 – What information is and isn’t sticking with Preet’s students?

  • 22:46 – Jason and Preet discuss the importance of financial advisors providing service to the next generation.

  • 24:03 – What are the key areas that Preet focuses on in his classes?

  • 25:39 – Preet and Jason discuss Hollywood’s influence on the tensions that surround money.

  • 28:50 – What are the first pieces of advice that Preet gives to his students?

3 Key Points

  1. Preet holds workshops for the children of Canada’s wealthy, aging from 18–24, in which he teaches them the basics of financial literacy, the emotional aspects of their situation, and how to think about money.

  2. The Shirtsleeves to Shirtsleeves in 3 Generations dilemma says that one generation amasses the wealth, the next one wastes it, and the final generation has nothing. Also, it’s more of a warning than a truth.

  3. Many of the preconceptions and tensions surrounding the wealthy come from pop culture, such as pressure to spend money on certain things and how to accept partners into the family.

  

Tweetable Quotes:

  • “Family lawyers and estate lawyers have the best and most tragic stories because they get involved into all the craziness and crazy family dynamics.” – Jason Pereira

  • “A lot of people who came up with nothing want their kids never to suffer that...they realize that the reason they are successful was the struggle.” – Jason Pereira

  • “To say that there’s any one path that works for everyone is naive...A much more gauged process is required to figure out what these individual families need.” – Preet Banerjee

  • “There is a certain expectation being in certain circles how much you spend on things. So, we talk about how they feel about those competing tensions.” – Preet Banerjee

 

Resources Mentioned:

Transcript:

Producer: Welcome to the Financial Planning for Canadian Business Owners podcast. You will hear about industry  insights with award-winning financial planner and entrepreneur, Jason Pereira. Through the interviews  with different experts with their stories and advice, you will learn how you can navigate the challenges  of being an entrepreneur, plan for success, and make the most of your business and life. And now, your  host, Jason Pereira. 

Jason Pereira: Hello and welcome today on the show, I have a friend, colleague, and general Canadian financial  advocate, guru Preet Banerjee on the show. He let it out in one of his podcasts recently that he also  coaches in addition to all the things he does, also coaches the children of affluent families on how to be  responsible with money. Something I did not know because he's always too busy doing 20 other things,  but I thought that would make a very, very interesting topic for us to talk about today because I'm a  little bit obsessed with intergenerational planning and making sure that it actually works effectively. And  this is always a common topic amongst business owners I know, and how they make sure that their kids  are going to be responsible with everything that they're leaving behind. So with that, here's my  interview Preet. Preet, thanks for joining me today. 

Preet Banerjee: Always a pleasure, Jason, thank you for having me back. Actually, this is my first time on this podcast.  I've been on your FinTech Impact Investing or FinTech Impact, is that what it is? 

Jason Pereira: FinTech Impact, yes, exactly. Exactly, and I've been on your podcast, so right now, it's going back and  forth. So you need to start a new one and I need to join it, so we need an excuse to chat. Okay so for  those out there who aren't familiar with you, tell us about who you are and what it is you do without  getting into everything including amateur car racing. 

Preet Banerjee: Oh man, well see, that's the thing. You know why I don't have business cards? I don't know what the hell  to put on them. But all right, here's the Cole's notes. Originally I studied neuroscience in university, my  undergrad, I graduated, I went to auto racing school, as one does, then fell into the world of finance.  And then I hosted a show on the Oprah Winfrey Network. So I hosted that TV show and yeah, I've  bounced around. I've been a wholesaler, a product designer for Kwan index funds. I've been working the  last little while primarily as a consultant to the wealth management industry on focusing mostly on  commercializations of behavioral economics and behavioral finance into wealth management processes.  And then there's a bunch of other stuff, but yeah, I'm in finance. 

Jason Pereira: All around personal finance and auto enthusiast. Okay, let's just say that much, that sums it, up at least  in a nutshell, but the only person with a more eclectic LinkedIn page than myself. So again, that's for the  introduction I brought you on because lo and behold, another skill I didn't know you had, it was coaching  the kids of affluent individuals on responsibility with money. So first thing I want to start off with is a  couple of things. First off, let me just say this much. This is a common topic amongst people that I know  who are successful. And I've seen both successes, successes of intergenerational dynastic fortunes pass down to failures on every level. And I'm not going to summarize this as spoiled kids conversation  because I'm sure you've encountered the breadth of everything from people who've never had to cut a  check in their lives because mom and dad did it to people who were given just the bare minimum. So  first off, when these people reach out to you, where are they finding you? What's the motivation, the  common motivation amongst them, besides just making sure the kids are good with money? 

Preet Banerjee: Yeah, so this all came about with one particular firm that handles finances of families with extreme  wealth. And so we've been running these workshops for a couple of years and it originally started back  when we were doing these things in person, it started as a, "Let's try this half-day workshop and see  what happens, see who shows up." And it was so wildly popular that they actually asked for a part two.  They said, "Is there a follow-up, can we come back next year? And can we do a full day?" And I'm  thinking, "Wow, you want to sit down for a full day to go over a workshop on personal finance and  financial planning for high net worth families?" And they're like, "Yes, absolutely." So it is an insatiable  demand. And from year to year, the families and the kids from these different families, the net worth of  these families range quite a bit. The most recent one we did, I think it was just reserved for children and  families with over 25 million in net worth. 

Preet Banerjee: And to your point, you're absolutely right. There is a whole range of knowledge levels, of values,  different family dynamics. So to say that there's any one stereotype that you've seen out there that  explains families like this. If your North star is the HBO show Succession, that's wrong. That is a very  extreme... I don't know, have you ever seen that show? 

Jason Pereira: First of all, one of my favorite shows, those people who haven't seen it, offensive to no end, and by the  way, I'm not sure people realize this, Will Ferrell is the executive producer on that show. 

Preet Banerjee: I've noticed that when I watched it, and I was like, "The same Will Ferrell?" And it is. 

Jason Pereira: I looked it up and it is, but the thing is, is that I think I caught that about after season one. And then you  go back and it's like, now the jokes make sense because this is totally his brand of humor, but just dirtier  than he normally could because he's doing usually PG 13 stuff. Anyway, so succession is kind of like the  worst case example that some degree of family dynamics. But I always make the statement that family  lawyers and estate lawyers have the best and most tragic stories because they get involve into all the  craziness of crazy family dynamics. And you'd like to have a beer with these people and hear some of  these things, but man, sometimes you want to laugh, but you want to cry sometimes. 

Preet Banerjee: Yeah, well the thing to consider is that in some cases, these families, they have a lot of privilege, a lot of  access to things for their kids, they want the best for their kids. And some of these kids are off the chart  smart type A like you wouldn't believe. And they'd come in with a binder full of questions and they're  prepared. And then you have others where maybe it is one or two generations of wealth and for them,it's relatively new. And maybe it was their parents that amassed the wealth and they raised their kids in  the way that they were raised, which was not without a lot of money. And so they have a different  dynamic, but where things really get interesting is when we actually go through some of these exercises.  So I'll give you a sense of what we talk about in these workshops and these conversations. 

Preet Banerjee: We do some of the bare basics, like what is credit? What is a credit report? And that is actually one of  the sessions where I see them perk up the most because it's also, I should say the age range is 18 to 24.  And so in this particular age range for some of them, this is the first time they've had access to credit.  There's a change in the way credit is made available to people with the buy now pay later versus  traditional credit cards and whatnot. And so we talk about those basics. We talk about how do you  calculate your own net worth? And now that you know how to do that, don't go home and have the  family meeting talking about let's calculate the family's net worth. So we talk also about communication  and the family dynamic. And another section that gets really interesting is communication both with  their partners or potential partners and their family members. And what are those money moments  where sparks could fly. When you're thinking about moving in with someone, and you're surprised to  realize that your parents have an opinion about that. 

Jason Pereira: Yeah, and that goes all to the misconceptions of what a prenup or cohabitation agreement can do are  quite amusing. And I will say, unfortunately, I've seen many that aren't worth the paper they're written  on. And for those of you who want to know more about what they can and can't do, please go back and  listen to my episode with Heather Hansen, where we cover this in depth. Okay, so you're basically saying  now with these people and it's interesting. So you mentioned the one or two generations deep or, or  new. I often find, at least in my history, a lot of people who came up with nothing want their kids never  to suffer that. And I find that that can go a little bit too far. Sometimes it gets to the point of they fail to  realize that the reason they were successful was the struggle. 

Jason Pereira: And by taking away the entire struggle from the child, the child, for lack of a better term, those muscles  are atrophied, they haven't had to worry about that. So you're basically coming in and that's a segue  point. Let's not even go there, but they can agree there. But going back to what you were saying earlier,  so coming in and you're not teaching them how to open up a Robinhood account and start trading, as  we're saying this during the Gamestop fiasco, you're basically teaching about the absolute fundamentals  of financial advice or financial literacy. That's where you're starting? 

Preet Banerjee: Yeah, so that's where it starts. And then it can branch from, "Okay, now that we have an understanding  of these bases," because they have this demand for just the fundamentals. They don't know, and this  applies not only for people in these workshops, but across the board. There's so many people who just  haven't ever been explained the basics. We're starting to see financial literacy programs being rolled out  in schools, but there are so many people who really, they're just so lost. And some of the questions you  hear, I always have to take a step back and realize just how deep inside the bubble I am. Because a  question that I think, "Wow, that is so trivial," is actually quite ubiquitous in society. So it's important to  create that safe space so that they can talk to one another.

Preet Banerjee: It's interesting in that the people who organize the program, they've been really good at making sure  that the age is set between 18 to 24. One year we had someone who they really wanted their child to be  a part of the workshop, but their child was 40, but had no financial literacy whatsoever. And it killed the  dynamic in the room because now you had someone who looked like they were from a different  generation and it caused people to clam up a little bit. So it was very important to create an atmosphere  where people can commute because it's not just a one-way transmission of information. "Here's a credit  report. Here's appreciating versus depreciating assets." We don't really want to talk about what  questions do you have? What bothers you? What are the things that give you anxiety? 

Preet Banerjee: What are the issues that you have that other people don't have? So for example, if you come from a  family with a lot of wealth and you take a look at social media, rightly or wrongly, there's a lot of  opinions out there about eating the rich. And so they wear that and they feel that and they feel, "Listen,  I didn't choose this. I'm not going to say I dislike it. I like it, but I feel attacked." And so we talk about the  emotional aspects of the situation that they are in and who they can communicate to, how to think  about money and their role in society. And I think you'll know when you talk to families with higher  wealth, they tend to start looking at things on an intergenerational timeframe, so it's not just the  individual family units. Sometimes you're looking and you're planning like a 100 year family plan, where  you have governance structures for that family. 

Preet Banerjee: And each generation has a seat at the table and they're invited, the successful ones, the generative  families, they do this, but there's that adage, the short sleeves the shirtsleeves in three generations, that  is a horrible thing to bring up to family. Because first of all, they're sick of hearing that. And for those of  you don't know the shorts sleeves to shirtsleeves in three generations is basically there's a trend where  one generation amasses the wealth, one wasted it, and the third has nothing to show for it. And so  whether or not that exists to a large degree or not, that is something that these families deal with all the  time. And it creates attention right off the bat. If you go in thinking, "We're going to have some  engagement with a financial institution to address the shirtsleeves to shirtsleeves problem," you are  implicitly saying, "Hey, the previous generations did amazing and you guys are going to screw it up. Let's  figure out how to make you less of a screw up." And that is a horrible dynamic to start with. 

Jason Pereira: Yeah, that's a very negative skew to that. It's a cautionary tale more than anything else. And I know you  were coming from on this thing because I've seen a couple of, like I said, dynastic fortunes and what I  find very different about their viewpoint than I would normally have thought early on is they almost look  at the wealth as not theirs. It's this amorphous thing that supports all generations of the family going  forward. And their job is to be a steward, not a user of that money. Is that something you've found? It  sounds like you've found that in the conversations because of the entire board thing. But to me, that's  the counterpoint to the entire short sleeves to shirtsleeves thing. It's like, "We're not going to let this  happen because this is a family apparatus and organization that we are going to bring you in on. And  eventually we're just going to hand the reins over." 

Preet Banerjee: Yeah, and again, it varies by family, huge, huge variance from family to family. Some of them, they're  already thinking like that, they're already communicating and others, it's almost like there are  gatekeepers between the generations and that generally is not a recipe for success. It can work, it may  not be ideal. So there's many different ways for these different families to figure out how do we think  about the family's fortunes over time? Who has a say, and are we going to be grooming kids to be a part  of the family business? Or is there an exit and now we have this money and now we all need to be  basically a family office and think about things that way, as opposed to they're going to be a part of the  business? Are they going to be a part of the the foundation? These can be separate things in these  different families. So to say that there's any one path that works for everyone, that's naive. And that's  why it's a much more gauge process is required to figure out what these individual families need. 

Jason Pereira: So you said there's no one path, but there's clearly multiple paths, but are there a couple that you tried  more frequently, general advice that you give to people in scenario A versus scenario B versus scenario  three? Do you have your bag of tricks that you typically pull out for one versus the other? Or is it literally  got to be figuring out the family dynamics and just working through them? 

Preet Banerjee: Yeah, it's more the latter. So as though my role is not so much to go in and say, "Hey, for these families,  here's what you guys should be doing." My role is to talk to these kids and say, "Here's the basics of  money and how to think about the world. And here are the situations and things that you need to be  able to tackle. So I can't tell you what the answers are going to be, but I can give you a framework for  thinking about how do you tackle these different things." So for example, when it comes to talking to a  partner that maybe you're starting to date someone, and we know that people tend to move in with a  partner earlier, they tend to get married later. And so they may be co-habiting and they may not realize  what that subjects them to in the eyes of the law, when it comes to the breakdown of that relationship. 

Preet Banerjee: And so we talk about how and when do you start communicating with a partner. And everyone's  relationship is going to be a little bit different, but we know that there are these money moments in  time where it can lead to fights, whether it's with a partner or a family member and they can change  your life forever. So these fights that start because there are about some kind of financial aspect can  turn into something so much more than that. So we talk about the importance of communication and  what can you do in these various situations, no matter what those situations are, to prepare you for  that. So think about all the big moments in life that can have an impact on your life, whether it's an  exam, which could determine your grade and where you go to school, whether it's training for a  marathon or preparing for a job, these are all things that you prepare for. 

Preet Banerjee: You don't just say, "Okay, let's have that job interview," and not do any prep. So these big money  conversations or money decisions, you can prepare for that as well. And so we talk about strategies  where you can prepare the person that you're going to talk to you to prepare yourself so that you don't  blow up in the moment and cause irreparable damage or change the trajectory of your life in a negative  way, because you simply didn't prepare. So it's much more general than giving them specific advice.  That's for the advisors of that firm or what the advisors that the family uses. That's not my role. I don't get into the weeds to that extent. It's more about setting them up so that they have a framework for  making decisions and thinking about them. 

Jason Pereira: Yeah, and it's interesting. I've heard all kinds of funny stories from this realm, and actually I'm going to  go back to your thing about moving in with someone or the money moments in life. And I think back to  when I was getting married and being Catholic, we have to go through the marriage classes in advance and there was one session that was particularly about marriage about money. And me and my wife had  always had an open dialogue about this, even when we were dating, just because that's the kind of  people we both are. So they had us do these worksheets and I fill it out. I hand it over to her. She's like,  "Yeah, that's right." And meanwhile, we just overhear everybody else in the room. And it was just like,  "You make how much? I thought you were-" 

Preet Banerjee: You're kidding. 

Jason Pereira: But it was on both ends of the spectrum. And it's like, "Wait a minute, you have how much in credit card  debt?" And I'm sitting there going, "You guys are [crosstalk 00:16:34]." Yeah, that was the one thing that  was missing and quite honestly. And it was like, "You're less than 12 months away from legally being  married and you haven't had this conversation? What is going on?" 

Preet Banerjee: "What do you mean you're not allowed to cross the border?" 

Jason Pereira: Well, I have this one thing. Yes, oh yeah, no, actually there was no session on criminal records, that  would have been amusing potentially. So, yeah. So I think it for granted that this is second nature to me,  but not everybody's raised in an environment where dialogue about money is normal. Here's an  observation or a question for you. Do you find that there is a difference in the children's ability to  understand these concepts based on when the family made their money? If they were born into it and  mom and dad were successful from the day they were born and this money was normal to them versus  they matured into it and saw the evolution of it. Is there any... Have you noticed any kind of difference  between these people? 

Preet Banerjee: No, I can't say that I have. I'm not saying that it doesn't exist. I just have not observed that. I would love  to run some surveys and do some qualitative interviews with them to learn more about their individual  family dynamics. But I think there probably is something to that because in my own research, separate,  when I ask people about the households that they grew up in, the financial security and the impact it has on their financial wellbeing later on in life, there was that negative correlation. So the more  financially insecure people were, the more they wanted to avoid ever repeating something bad  happening. So they tend to be a little bit more vigilant with teaching themselves and whatnot. 

Preet Banerjee: And I do think one of the things that does kind of crop up is when you have families that are able to  support their kids and provide anything that they want, some of them have different strategies as to  how they can prepare their kids. Is it withholding certain resources so that they understand failure? Is it  encouraging them to say, "Listen, you start your own venture. It may fail, but you're going to learn so  much from just going through those processes. So we'll give you a little bit of seed capital here, but  you're on your own." Others are, "Here, here's a project, you do it." So it is quite varied, but it's an  interesting question. I would like to study that, but that's not my latitude for what I'm brought in to do. 

Jason Pereira: Yeah, no, I don't play of anecdotal evidence, but I can't say I can point to it also, incidentally, I'm sure  you've seen this too. There's a disproportionate number of financial advisors in the business who came  from financial hardship for the very same reasons. Most people obsess about it and basically it leads  them to that conclusion. Now let's go back to the financial literacy piece and I want to talk about how  effective you feel it's being. I'm sure it is effective, but to what degree, because one of the challenges  that happens with financial literacy, I have a lot of mixed feelings about this. I'll tell you right now. It  comes down to too often I find that some of these messages come from conflicted parties, big surprise,  the insurance company wants you to buy more insurance. Some of it is just all too geared around the  concept of do it yourself investing, which there's so much to cover before we even get to fundamentals  of investing. 

Jason Pereira: And then the other issue. And this was, I think, Michael Kitces talked about this study that showed that if  people had not used something they learned in a financial literacy class within, I think it was about six  months, it was as if they didn't learn it at all. It's like anything else. You can learn a new skill, but if you  don't practice it, it's going to go to waste. Given that you're doing these sessions, it looks like repeatedly  with people, first off, what's really sticking with them? What's not sticking with them? And how are you  addressing them? 

Preet Banerjee: Yeah, so you're right about the knowledge decay issue. So that was the use it or lose it phenomenon  that was identified. I think that was the Nettermeier paper. 

Jason Pereira: Leave it to the neuroscience guy to know that paper. 

Preet Banerjee: The subsequent studies I'll say that that performed meta-analyses on a much wider range of studies,  and also remember financial literacy implementation in schools is in its infancy. So you do a research  study in 2015 looking at what data you have, it covered, call it, I don't know, 300 initiatives. Three years  later, there's 3000. So there's a lot more data and also fine tuning of what happened in the first round  being adjusted so that it is more effective. So it is getting better. There is certainly a knowledge decay,  but that knowledge decay exists with everything. How many people remember how to do long division?  So that aside, but I agree, [crosstalk 00:20:45], and I agree, financial literacy is far from perfect, but it  doesn't mean you should stop it. 

Preet Banerjee: The questions that these attendees will have after a couple of months, they're not going to remember  the answers that were provided in the fundamentals of financial literacy. But when they walk out of that  room or these days virtual meetings, what I want them to have is the framework for figuring out if I  don't know the answer, what is my first step to figure out how I can solve this problem? And so for  them, they're going to have access to, in some cases, a team of advisors. And I say, "Listen, if you don't  know, if you don't have the confidence in making your decision and being able to explain it to someone  why or what your rationale is for it, you have a lot of resources because of your station in life. So use  them." 

Preet Banerjee: And so for them, it's the confidence to say, "Yes, I can bother my parents' advisor." And sometimes they  think that they are putting them out by contacting them. They feel bad contacting the family's advisor  because they feel like they're putting them out and I say, "No, your family pays for this advice. This is  part of the package. You should be free to avail yourself with those resources." And that comes down to,  again, the dynamics, how the younger generation deals with the world in general, they just don't like  dealing with humans generally. And so getting them and the families to understand that how they  interact is going to be different. So having them sit down with someone for a meeting, it's tough. It's not  as easy as it sounds. They need other means to communicate with the families advisors. 

Jason Pereira: Excellent. Yeah, it's funny. I think that the dynamic of the children reaching out to the families advisors  at that level of wealth is far less contentious than it is a smaller account. Here's the thing, I get this  conversation with other advisors all the time. I'm like, "Oh, my client wants me to take on their kid." And  my response is, "Okay, what's the problem?" "Well they have no money." I'm like, "Okay, but the  parents have money." And they're like, "Yeah, but I'm not making any money off of them." It's like, "But  you're making money off the family unit." And I said, "Besides that, everybody keeps on talking about  this massive intergenerational wealth transfer it's going to happen. And the opportunity for advisors and  everything else. And these people keep on talking about how they're going to retire and sell their book  one day." And I keep saying like, "So you got to sell your book and it's going to be a bunch of seven-year olds and none of their kids." Have you thought about how little I'm willing to pay for that? 

Preet Banerjee: Yeah, exactly. The value of it is very little because the conversion on those or the retention of those  assets is going to be very low if you are not providing service to the next generation as well. And so how  to do that is different as well. But you can't just ignore it, especially if you're your rationale is I'm not  making money dealing with this part of the... That's horrific. If you had a client who had 10 million bucks  invested with you and they had a question about whether they should buy or lease a car, or you can say,  "Well I don't make money on advising on leasing versus financing cars." No, of course you're going to  provide advice. That's what you're being paid to do. 

Jason Pereira: Yeah, some people are saying they're providing advice, but then they frame it within various menial  confines. When you actually do full comprehensive planning, it's a different story. So I'm going to guess  that this has been pretty well received and successful because you keep on being asked to do it. So  that's the best testament you can get there. Just to make sure we cover this before we wrap, up the key  areas. So you already talked about credit, the basics and fundamentals of credit. I'm guessing you've gotten basics and fundamental of budgeting. What specific other key areas that you really hone in on  and really resonate with these kids, young adults, what am I saying? 

Preet Banerjee: Yeah, a couple, one is a framework for thinking about money over a lifetime, their earning potential,  how much they keep, how much they spend, what goes to appreciating assets, what goes to  depreciating assets. There is a certain expectation being in certain circles how much you spend on  things. So we talk about how they feel about those competing tensions. There's certainly a keeping up  with the Joneses phenomenon and there's also the eat the rich messaging that we see a lot on social  media. So how do they deal with that? Another big area, again goes back, it all kind of comes down to  communication, but specific situations when you are maybe dating someone who comes from a family  with either less or even extremely more wealth than you, and the situations that arise. So for example,  your parents give a gift to your partner and they think, "Oh, that's so nice of them to do that." 

Preet Banerjee: And then the recipient is it creates a lot of anxiety because maybe the nature of that gift is maybe they  think is overly generous and it creates some tension there. If you're serious about someone and your  parents, they may, with all the best intentions say, "Oh, maybe we can think of a spot for them in the  family business or nudge them to take more risks," or something like that. And then depending on the  partner, they may say, "Yeah, that's amazing. I would love to be a part of this." And others are like, "No,  no, what do you do? Are you trying to change me? Am I not good enough for your child?" And so there's  all these preconceptions. A lot of it comes from pop culture and whatever those can or can't... Some  people, they don't feel those tensions, but many of them do. And so how do you address some of those  situations? 

Jason Pereira: Are you saying that what we see from Hollywood about money is not true? Really? 

Preet Banerjee: When you look at Succession, which I do love that show, I think maybe one thing that would be  interesting is for people who have seen that show is to say which character are you closest to? Just as a  fun exercise, because there's so many layers to peel with that completely dysfunctional Roy family. 

Jason Pereira: Man, there is no good answer to that question, is there? No matter what, you're just a horribly flawed  human. I feel like, we'll come back to that. I feel like it's like Mad Men how on some level, everybody  was deeply flawed except they turn that up to 11 and then they involve family dynamics and it was just  like, Oh my God, kablamo. 

Preet Banerjee: Let's look at the other side of that. Just so people don't think that that's what we're trying to imply. No, I  mean, there are a lot of families, have you heard of the Polaris project or the family business network  have these groups that they put together and families will think about how they take these resources  that they have, whether they're still involved in their businesses or they've exited the businesses and  now are running essentially these family offices, what can they do with that to improve the lot of the world? What are the causes that they want to focus in on? And philanthropy is a big topic and getting  everyone a seat at that table to talk about what do we, as a family, as stewards of this capital, and also  people who live on this planet, how are we going to use this so that we think about what we want to  achieve and what we can do for other people around us, what problems we want to try and help solving. 

Preet Banerjee: So that's where, when you've gotten to that level, when you are thinking really, truly  intergenerationally, and you're thinking about the family from the aspect of different generations, you  have these governance structures that are in there, and it's amazing what these families can do. So I just  want to say, I know that there's a lot of rhetoric out there that say tax them this much or whatever fine,  but don't just attack people and understand that people who have a lot of wealth, they're not oblivious  to this. And there are many who are doing some really incredible things with their money. 

Jason Pereira: I would agree. And Sam Harris is quite frequently talking about this subject when it comes up, but his  perfect retort is when people make the accusation that the only way they got to a billion, JK Rowling  stole money by creating Harry Potter, give me a break. Let's be honest, there's different ways to make  money and you can have an absolute clean conscious about becoming wealthy. And as for the injustices  in wealth inequality and taxation, those are maybe they're the benefactors of that, but they're not  necessarily the perpetrators of it. So let's cut them a break to some degree. And you know what? It's not  just Bill Gates and Warren Buffet saying, "Yeah, we probably should pay higher taxes." There's a lot of  people out there saying that this ain't quite right. 

Preet Banerjee: Yeah, absolutely. 

Jason Pereira: So great. So I think one of the last things I want to cover, so just assuming this podcast is being heard by  people who are in this situation, wanting to make sure that they set their kids up for the best possible  success when it comes to dealing with the eventual fortune or small or large fortune they're going to  inherit or be a part of, what are the first pieces of advice you give them? So this is your opportunity to  help course correct them right now. How do they get started? 

Preet Banerjee: Okay, so I think the main aspect is you have to have trusted advisors. So take the time to really research  your options and kick the tires. I don't know if you've noticed this, but there are so many people who  end up with an accountant, lawyer, advisor, whatever, because it was the first person that just  presented them to themselves. And really, you need to take these decisions a lot more heavily than  that. And ideally, if you're in a situation where you've amassed a lot of wealth and you're trying to figure  out, "All right, so what do I need to do?" You need to find a team that can support that. So I do think  that there is something to the advisors who work in these niches and they have experience with that  because the nuance, the complicated minutia, the details, cross-border taxation, having assets here.  This is very complicated stuff. You do not need to know how to solve for that as an individual. You just  need to know the people you hire... Yeah, because my God, it takes hours and hours and hours. 

Jason Pereira: Well great. Sell the family business and getting the financial planning at a comprehensive level, because  that's what you're talking about. Yeah, and make less money for it. So focus on continue your little  empire building and let someone else handle it. 

Preet Banerjee: I will say that these families tend to do a pretty good job at doing that because they tend to have  amassed their fortunes through the running of an organization. And so they have some experience in  figuring out all right, who really knows what they're doing, who really doesn't. And so their successes  sometimes, it's through a combination of luck and skill, but they tend to know what they're doing. That  tend to be pretty smart people. So they're pretty good at finding the right people to deal with. But once  you find those people, make sure that everyone in your family knows that they can be a part of that as  well. That's what tends to separate the generative families, the families that continue to grow their  wealth over time, even after the exit of a business, it really comes down to communication. That seems  to be the common thread. 

Jason Pereira: So much of what we do does. And I will say, just to echo that, landing on the first person that you get  introduced to. I've been referred people on several occasions where I'm the first person they've spoken  with and they're like, "Oh, this is great. Let's get started." And my response is, "No, I want you to go to  talk to at least three or four other people." The reality is, is that you need to make sure that I'm a fit for  you. I think we are and it sounds great and whatever, and I'm happy to work with you, but I think you  owe it to yourself to explore this conversation. 

Jason Pereira: Because frankly, if you're making this call and you're specifically dealing with a financial planner who's  going to handle all this stuff for you, this is the decision that hopefully you only have to make once to  twice in your lifetime. So make sure it's the right decision, because this is not the same thing as I'm going  to change dentists to the one down the street. There's a lot more involved in that, and not to demean  dentists, I have many dentist clients who might be listening right now. 

Preet Banerjee: That reminds me, I'm due for my cleaning. I haven't been in like a year because of the lockdowns and  stuff. 

Jason Pereira: Mine is actually now just up the road from you in case you need referrals. So that's the first piece. And I  will say that very often, I think a lot of these families do end up in situations where it seems to happen  with accountants quite frequently. And it does most certainly happen with financial advisors, but I'll  often get clients I bring on board where they'll say, "Listen, I've been with this guy since I started out.  You let me know if they're up to snuff or not." And that's 50/50. And unfortunately I will say this much,  very few advisors or accountants have I ever seen who will say your needs have gone beyond my  capacity to address them. So the reality is, there's a lot of faking it until they make it. And there's an  incentive to keep people around. So be cognizant, make sure that the people you are working with are  up to the task. So this has been great, Preet. First of all, it's always amusing catching up with you and  talking about television and-

Preet Banerjee: We really have to start recording our pre-interview chats. I think those are fascinating. 

Jason Pereira: We may have to start talking about a podcast where we just talk about random stuff. 

Preet Banerjee: There you go. 

Jason Pereira: There you go. So with that, where can people find you? 

Preet Banerjee: Preetbanerjee.com is the best place to go. Website, I'm revamping it because I looked at it six months  ago. I realized, "Wow, I haven't updated this in years." It still sucks. But I'm eventually going to put  everything onto that one page. So the podcast, the YouTube channels, because there's multiple. The  people who are interested in the consulting I do for the wealth management companies, people are  interested in money gaps, which is a financial planning platform for advisors. So everything is just going  to end up there. So preetbanerjee.com is the best place to be. 

Jason Pereira: For the record, no one's ever satisfied with their website. I constantly want to pull my hair out over  mine. Thank you so much for your time. 

Preet Banerjee: My pleasure. 

Jason Pereira: So that was this week's episode of Financial Planning for Communion Business Owners. I hope you  enjoyed that. And if you're in a situation where you are looking to make sure your kids basically are  going to be set up for success as they eventually become stewards of the family wealth, make sure you  have the right people in place to help coach them through that and make sure that they are engaging  those kids, teaching them about everything from the fundamentals to the role they're going to take in  the company. And also, as you heard, watch Succession. Great show. And until next time, as always, this  has been Jason Pereira at Financial Planning For Canadian Business Owners. Take care and I'll catch  you next time. 

Producer: This podcast was brought to you by Woodgate Financial, an award-winning financial planning firm  catering to high net worth individuals, business owners, and their families. To learn more, go to  woodgate.com. You can subscribe to this podcast on Apple Podcasts, Stitcher, Google Play, and Spotify,  or find more episodes at jasonpereira.ca. You can even ask Siri, Alexa, or Google Home to subscribe for  you.

FPCBOJason PereiraFinancial Literacy