There’s a saying I’m sure you’ve heard: shirtsleeves to shirtsleeves in three generations. Translation? The first generation builds wealth, the second maintains it, and by the third, it’s gone—usually faster than a college kid burns through a DoorDash gift card.
I was reminded of this the first time one of my kids got a car. My daughter had saved up some of her own money, I chipped in the rest, and together we got her a decent used car. She babied that thing—washed it every weekend, parked in the farthest corner of the grocery store lot to avoid dings, and kept the inside spotless. A year later, her younger brother inherited it. Let’s just say the car didn’t receive quite the same treatment. Fast food wrappers piled up like an archaeological dig, oil changes were “optional,” and one day I discovered he had actually used duct tape to “fix” a side mirror.
That car became my own mini case study in generational wealth transfer. The first owner respected what it took to earn it, the second took it for granted, and by the time it might have made it to a third sibling, the “asset” had all the value of a soapbox derby car.
Families, unfortunately, often do the same thing with real wealth.
The statistics are sobering: 70% of family wealth is gone by the second generation, and 90% by the third (CNBC). And while CNBC might not always be gospel, this one checks out. The problem isn’t usually bad investing—it’s bad governance. Families who focus only on passing down money without passing down values are basically handing their kids the keys to a Ferrari without ever teaching them how to drive.
Here’s where the cracks usually show:
- Without governance structures, families fragment. Decisions get made in silos, biases fester, and conflict brews.
- Values fade when they’re not articulated. If they’re not written down and embedded in planning, they’re gone faster than last year’s TikTok trend.
- Heirs are unprepared. They know how to spend money but not steward it.
- Advisors stay silent, focusing on investments while ignoring the bigger picture. That silence doesn’t just hurt families—it eventually erodes AUM when wealth dissipates.
So what’s the fix? Enter you, the advisor. Not just as portfolio manager, but as legacy architect. The families that survive the “third-generation curse” aren’t the ones with the fanciest trusts or the flashiest portfolios. They’re the ones that pair financial structures with intentional values and governance.
Learn how to double or triple your revenue in one year with Financial Gravity's Turnkey Multi-Family Office Charter
That means facilitating family meetings where mission, vision, and values are articulated. Encouraging written legacy statements—family constitutions or mission documents—that serve as guiding stars. Leveraging trusts, foundations, and charitable vehicles to embed values into the financial plan itself. Preparing the next generation through education and mentorship so they’re not blindsided when they inherit responsibility along with assets.
And here’s the kicker: families want this kind of help. They just don’t always know how to ask for it. If you’re the advisor who steps up, you shift from “the person who manages our money” to “the person who protects our family.” That’s a career-defining distinction.
As Campden Wealth put it, “Family wealth without family values is like a tree without roots; it may grow quickly, but it won’t last.”
So yes, you can manage money. But can you preserve identity? Can you protect unity? Can you help a family embed its purpose into its planning so that its wealth is a tool for growth, not division?
That’s the hidden calling of our profession. When you do it, you don’t just preserve assets—you preserve families. And in doing so, you build relationships that transcend market cycles, fee compression, or whatever new robo-platform Silicon Valley rolls out next year.
Money alone rarely lasts. But money paired with values, governance, and education? That’s the kind of legacy that survives the shirtsleeves curse.
And if you need proof, just ask my daughter about that first car she cared for like it was gold—then ask her brother what happened when he got it. That’s the difference between stewardship and entitlement, and it’s the same difference you can create for your client families.
Don’t let your client’s legacy stop at the second generation. With the right tools and the right thinking—family office thinking—you can design a plan that aligns their wealth with their values, and ensures future generations are prepared to steward it. The family office approach combines proven tax and estate strategies with structured family governance, mission-driven planning, and next-generation education, so your client’s legacy grows stronger with time instead of fading away.
