Discovering Family Values: A Guide to the Business of the Family A Family Business Magazine Webinar November 3, 2016

Introduction by Peter Begalla Agenda Introduction by Peter Begalla Time for questions (enter them from your computer) during and after the presentation 60 Minutes Presentation and supporting material will be emailed to all participants after the webinar

Today’s Speakers MINDY F. ROSENTHAL Chief Wealth Strategist, Hawthorn, PNC Family Wealth PETER BEGALLA Conference and Education Director, Family Business Magazine

“All happy families are alike; each unhappy family is unhappy in its own way.” -Leo Tolstoy, Anna Karenina

70% Failure

30% Success

Wealthy families want to stay wealthy.

Successful families articulate goals in words as well as numbers.

They work to ease the complexities of wealth.

They build enduring relationships with their families and their advisors.

They seek peace of mind.

The Family Business.

The Business of Family.

A Values Exercise:

Identifying Your Values Leadership: motivating others to achieve a common purpose Power: having the ability to influence change Relationships: caring for and spending time with family and friends Pleasure: seeking personal satisfaction and enjoyment Sustainability: maintaining resources while planning for the long term Community: feeling a meaningful connection to a group of people Risk: taking chances, testing limits, and being willing to fail

Some Considerations: How does this value serve you? How does this value impair you? How do you react when this value is challenged by others? What blind spots do you have because these values are important to you?

Connecting the Generations

The Next Generation may express or “live” shared values differently from the previous generations

External Forces Influencing Millennials Technology 9-11/ this age of terrorism The Great Recession

Committed to Social Responsibility/Philanthropy 96% of Next Generation family members are interested or very interested in philanthropy*   69% are interested/very interested in Socially Responsibly Investing* 64% are interested/very interested in impact investing* Post inheritance, 80% plan to dedicate some of their time to philanthropy/community help** *Campden Research, Proving Worth—The Values of Affluent Millennials in North America **Campden Research, 2014 Next Generation Wealth Report, Next Generation Wealth: Defining a New Direction.

Millennials Have Strong Entrepreneurial Spirits 39% had already created wealth on their own* 45% felt it was important or very important to re-create wealth* 28% said wealth re-creation was of little import* *Campden Research, Next-Generation Wealth: The new face of affluence

Stewardship of Wealth Deemed Central 79% of Next Generation view themselves as stewards of family wealth* 94% said they felt being a steward was important or of utmost importance** This 94% said they felt half of their inherited wealth should go to the generation following them** *Campden Research, Next-Generation Wealth: The new face of affluence **Campden Research, 2014 Next Generation Wealth Report, Next Generation Wealth: Defining a New Direction.

Engagement Strategy: Governance Providing clear pathways for engagement by detailing processes and procedures for decision making surrounding key aspects of the family, its values, legacy and wealth  

Engagement Strategy: Philanthropy/Social Responsibility Include the Next Generation in Gifting Strategy Discuss incorporating Responsible Investments in the foundation or other portfolios or the company defined contribution plan  

Engagement Strategy: Entrepreneurism Create pathways to contribute to new product development activities of the company Consider Creation of a Family Bank Fund entrepreneurial ventures

Conclusion All Happy Families are Alike… Successful families are able to clearly articulate what is important to them and associate those values with long-term goals

A Quick Quiz On a scale of 1-5 with 1 being “Not at all” and 5 being “Completely” How comfortable are you with your wealth? How prepared do you feel for wealth transfer? How well do you feel you understand what is important to you and your family? How important is data when evaluating the impact of your philanthropy; wealth management? How interested are you in Responsible Investments?

Questions?

The PNC Financial Services Group, Inc The PNC Financial Services Group, Inc. (“PNC”) uses the marketing names PNC Wealth Management® and Hawthorn, PNC Family Wealth® (“Hawthorn”) to provide investment and wealth management, fiduciary services, FDIC-insured banking products and services, and lending of funds through its subsidiary, PNC Bank, National Association (“PNC Bank”), which is a Member FDIC, and to provide specific fiduciary and agency services through its subsidiary, PNC Delaware Trust Company or PNC Ohio Trust Company. PNC does not provide legal, tax, or accounting advice unless, with respect to tax advice, PNC Bank has entered into a written tax services agreement. PNC does not provide services in any jurisdiction in which it is not authorized to conduct business. PNC Bank is not registered as a municipal advisor under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Act”). Investment management and related products and services provided to a “municipal entity” or “obligated person” regarding “proceeds of municipal securities” (as such terms are defined in the Act) will be provided by PNC Capital Advisors, LLC, a wholly-owned subsidiary of PNC Bank and SEC registered investment adviser.   “PNC Wealth Management” and “Hawthorn, PNC Family Wealth” are registered service marks of The PNC Financial Services Group, Inc. Investments: Not FDIC Insured. No Bank Guarantee. May Lose Value.