Is your financial future in your DNA?

If you happen to have $5 million or more in net worth, Northwood Stephens Private Counsel will be happy to tend to your every financial need. But once youâ€™ve discussed your investment portfolio and your tax strategies with the exclusive Toronto firm, get ready for some far more personal questionsâ€”like why your Aunt Maggie wonâ€™t speak to her sisters, why there seems to be an unusually high divorce rate among your uncles, and how cousin Ronaldâ€™s drinking problem alienated half the family. Tom McCullough, president of Northwood Stephens, started asking such questions two years ago, when he realized that a potent tool for family therapists called a genogram can also be used for financial planning. A genogram is a schematic diagram of your family history that allows you to see recurring patterns of behavior at a glance. It lets you analyze your financial situation not only in terms of your own life, but also in terms of all the generations that came before you. A genogram looks a lot like a family tree, except itâ€™s packed with all the stuff thatâ€™s usually never talked about. Genograms tell you what a family is really likeâ€”whoâ€™s divorced, who isnâ€™t speaking to whom, who has a history of bad relationships, and who has alcohol problems. Patterns of behavior often recur in families and those patterns can foretell your own financial future. â€œHow you deal with money is a family trait,â€ says Fredda Herz Brown of Relative Solutions, a firm in Cresskill, N.J., that uses genograms to help wealthy families resolve conflicts. â€œAttitudes are taught emotionally, sometimes without words. Kids learn by what they see people doing, so every interaction you have with money teaches your kids your attitude towards it.â€ Sometimes the behavior spotlighted by a genogram can be as simple as a refusal to talk about money. Sometimes it can be as dramatic as a tendency to clinical depression. In many cases, though, the patterns are more subtle. â€œIn one clientâ€™s case, there was a history of strong parental favoritism and conflict in the family,â€ says McCullough. â€œSo whenever a financial issue came up, our client was first and foremost concerned that her children were treated completely fairly.â€ Not all the news thatâ€™s turned up in a genogram is bad, McCullough says. In fact, a genogram can help give your kids a sense of your familyâ€™s accomplishments and build a sense of pride in the legacy theyâ€™ve inherited. â€œImagine if the last three generations of your family were very generous to a particular cause. You may want to expose your kids to that.â€ Creating a genogram is a lot of work, says McCullough. But if youâ€™re willing to go through the process of interviewing family members and inquiring into family history, youâ€™re nearly certain to have flashes of self-discovery. You may realize, for instance, that your tendency to hoard money is a characteristic that has run in the family for generationsâ€”and by achieving that insight, you can gain the power to break the pattern. The goal, says McCullough, is to allow people to lead the lives they want to, rather than the lives their family background has pushed them into. â€œIf there are strong patterns in your family, you may decide to avoid them if theyâ€™re negative, or reinforce them if theyâ€™re positive. But the first step is understanding that these patterns do exist.â€