Voices from our academic community - Money & Generations: Helping Families Turn Financial Disputes into Connection

Listening Beyond the Numbers

Advisors to enterprising families are often asked to weigh in on technical questions: How much should we distribute in dividends? How should compensation be structured? Should we take on debt or remain conservative?

Too often, the focus is on finding the “right” answer. But what makes these decisions so complex is not the math. It is what money represents: security, freedom, recognition, or legacy. It is the emotions the notion of money elicits within individual family members – perceived injustices, favoritism, or manipulation. Family members rarely fight about numbers or money alone; they fight about what it means to them.

As researchers and advisors, we have seen time and time again how underlying beliefs about money shape financial decisions. These beliefs can remain hidden until a pivotal moment, for example, when a cousin objects to an investment or a sibling questions dividend fairness. Helping families bring these beliefs to the surface is often more important than solving the technical problem. We explore these, and other related issues, in detail in our book Money & Generations: A Guide for Enterprising Families and Their Advisors (see www.moneyandgenerations.com). 

Surfacing Family Money Scripts

Imagine this: Tensions run high at the annual family shareholder meeting. Two factions face off. On one side: “We should be getting much more – it’s our right as owners to be rewarded for our investment.” On the other hand, “We have a legacy to preserve: the business is not here to support your lavish lifestyle.”

What looks like a straightforward dispute over distributions is, in reality, a clash between short-term consumption and long-term stewardship, and a reflection of individuals’ money scripts, the unconscious beliefs that shape how people perceive and relate to money. In this example, one group views the enterprise primarily as a financial asset designed to generate income. At the same time, the other sees it as a legacy to be safeguarded for future generations, even if that means sacrificing today.

Money scripts,  a well-established concept in financial psychology[1], can take many forms: “I don’t deserve what I have because I didn’t create it” (money avoidance), “I feel ashamed of our wealth and don’t want anyone to know” (money vigilance), “Money solves most problems” (money worship), or “My life is better if I have more money” (money status), to name a few.

As one can imagine, such deeply held orientations inevitably shape financial decisions, whether setting compensation, approving distributions, or taking on external debt. And even in close-knit families with shared values and histories, individual money scripts can diverge significantly, leading to dramatically different views on what is “responsible” or “fair”. Left unspoken and unknown, these scripts fuel judgment, mistrust, and conflict. 

Advisor takeaways:

• Surface money scripts: Use reflective tools such as questionnaires, conversations, or facilitated exercises to clarify individual money beliefs.

• Storytelling: Encourage families to share how money was discussed in their household growing up. These stories open pathways to understanding.

• Reframe conflicts: often, it is not “about dividends” or “about salaries,” but about fairness, recognition, or belonging.

Mitigating Role Confusion

Imagine this: At a board meeting, a family director opposes the CEO’s executive compensation package. His arguments appear sound on paper: the proposed pay seems to exceed benchmarks for similar companies. A long-serving independent director steps in, reminding the board that this family had a longstanding pattern of underpaying family executives. The rationale was always the same: “They are also shareholders — paying them full market salaries would be double dipping.”

What seems like a disagreement about pay levels is, in reality, a case of role confusion. In family enterprises, individuals often occupy multiple roles simultaneously: they may be shareholders, board members, and employees. Without clarity, responsibilities and rewards get blurred. The “double dipping” argument illustrates a common misunderstanding — that one role (ownership) should offset another (employment). In practice, however, shareholder returns and executive compensation serve different purposes: a return on invested capital and payment for professional labor.

When families conflate these roles, resentment builds. Family executives feel undervalued compared to outside talent, while non-executive shareholders fear favoritism or excess. Left unresolved, such confusion undermines both fairness and competitiveness.

Advisor takeaways:

• Clarify roles and rights. Reinforce that being a shareholder, director, and employee are distinct roles, each with responsibilities and rewards.

• Establish clear compensation policies. Define how family executives are paid relative to market benchmarks and separate this from dividend or ownership policies.

• Educate on governance basics. Help families understand why separating roles strengthens accountability and avoids mistrust.

Embrace Trade-Offs

Imagine this: The Miller family, owners of a third-generation pizza business, faces a once-in-a-lifetime opportunity to acquire their most significant competitor. The founder-CEO urges bold expansion. His daughter fears losing dividends she’s been relying on for her mortgage. His son argues passionately: “Without this acquisition, there will be no dividends in five years.”

This debate illustrates a dilemma that is all too familiar to any family enterprise advisor: How do you explain to family owners and stewards that they cannot have it all simultaneously? 

In this scenario, the family owners must decide whether resources should be invested in growth or distributed to shareholders. One tool we use is the reservoir analogy. Imagine three interconnected reservoirs: growth, liquidity, and control. Filling one reservoir drains the others. For example, more dividends (liquidity) may limit resources for growth, while more growth investment may require external funding, which dilutes family control.

Advisor takeaway:

• Use visual tools like the reservoir model to help families see interdependencies.

• Frame dividend, debt, and reinvestment choices are not isolated decisions but linked trade-offs.

• Facilitate integrated goal-setting sessions: align family lifestyle expectations with business reinvestment needs.

Five Guiding Practices for Advisors

From our research and advisory work, here are five practices to help advisors support families more effectively:

1. Start with values. Ask: “What role do we want money to play in our family’s life and legacy?”

2. Educate owners. Ensure all shareholders — active or passive — understand finance basics.

3. Differentiate roles. Prevent role confusion by clarifying the rights of owners, directors, and employees.

4. Visualise trade-offs. Use tools like the reservoir model to make financial interdependencies tangible.

5. Review regularly. Encourage families to revisit financial policies as ownership grows and generations shift.

Conclusion: From Conflict to Connection

Money will always spark strong feelings in families. It can fuel conflict, but it can also deepen connection with the right tools. By surfacing money scripts, aligning policies with values, and building ownership competence, advisors can help families turn financial challenges into opportunities for unity and resilience. For advisors, the invitation is clear: look beyond the numbers. Listen for what money represents. In doing so, you are not only preserving financial wealth but nurturing the relational capital that allows families to thrive across generations.

Interested in reading more? Please find our book Money & Generations: A Guide for Enterprising Families and Their Advisors in your local bookstore, or online (www.moneyandgenerations.com) 

(Source: FFI Practitioner, October 2025)