The Six Thinking Hats method, devised by Edward de Bono, is a powerful tool for structured thinking and decision-making. In wealth management and succession planning, this technique can be particularly beneficial.
White Hat
Focus on the facts and data. Gather all relevant financial information, including assets, liabilities, and market conditions. This ensures decisions are based on solid evidence.
Red Hat
Consider emotions and intuition. Understand the emotional aspects of wealth transfer, such as family dynamics and personal values. This helps in addressing potential conflicts and ensuring a smooth transition.
Black Hat
Identify risks and challenges. Evaluate potential pitfalls in the succession plan, such as tax implications and legal hurdles. This proactive approach helps in mitigating risks.
Yellow Hat
Look for benefits and opportunities. Highlight the positive aspects of the succession plan, such as tax advantages and the preservation of family wealth. This optimistic view can motivate stakeholders.
Green Hat
Encourage creativity and innovation. Explore new strategies for wealth management and succession, such as trusts and philanthropic endeavours. This fosters a forward-thinking approach.
Blue Hat
Manage the process. Ensure that all perspectives are considered and that the plan is comprehensive and well-coordinated. This hat oversees the entire process, ensuring clarity and structure.
It's common for individuals to prefer a particular hat, often gravitating towards the thinking style that feels most natural to them. However, it's crucial to strive for balance and develop proficiency in all six hats. This holistic approach ensures that decisions are well-rounded and consider all aspects of a situation, leading to more effective and comprehensive planning.
I recall a client meeting where the Six Thinking Hats method stood out and made a significant impact. A family business was transitioning to the next generation, and emotions were running high. By using the Red Hat, we acknowledged these emotions, which helped in addressing underlying concerns. The Green Hat then sparked innovative solutions, such as setting up an express trust. This structured approach not only eased tensions but also led to an accord and a successful succession plan. It was a testament to the power of the Six Thinking Hats in navigating complex financial landscapes.
By applying the Six Thinking Hats method, wealth managers can create robust and well-rounded succession plans that address all aspects of wealth transfer, ensuring a prosperous future for generations to come.
For sage advice on wealth management, financial planning and or a succession planning discussion, feel free to reach out to me, Bruce Jenks.
With years of experience and a commitment to holistic financial planning, I'm here to help you navigate the complexities of wealth transfer and ensure a prosperous future for your family.
Bruce Jenks is a financial adviser at Stewart Group, a Hawke’s Bay and Wellington-based CEFEX & BCorp certified financial planning and advisory firm. Stewart Group provides personal fiduciary services, wealth management, risk insurance and KiwiSaver scheme solutions. Blog No 12.
The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from a Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz
