— A new breed of wealth consultant to America’s
richest families is doing more than pore over financial
digging into genealogy records and pulling out the
therapy couch to help families avoid frittering away
baby boomers set to power an unprecedented wealth
transfer in the coming decades, financial firms that
cater to the uber-rich are hiring teams of historians,
psychologists and experts in family dynamics as an
unconventional business strategy.
producing family history books that tell the story of
how the family fortune was made and hosting retreats to
help millennials and Gen Xers discuss the emotional toll
of inherited wealth. Skilled coaches tackle personality
clashes and unreasonable expectations that so often
fracture families with bitter infighting.
of the families we deal with realize that the generation
that created the money was so busy creating wealth
through the company that they didn’t have time to sit
down and talk with the children or grandchildren and
have those value-based conversations," said Andy
Anderson, chief historian with Minneapolis-based Abbot
Downing, a division of Wells Fargo that works with those
whose investable assets exceed $50 million.
managers know all too well the truth behind the proverb,
"Shirtsleeves to shirtsleeves in three
generations." Research shows that affluent families
lose 70 percent of their wealth in the second generation
and a stunning 90 percent by the time the grandchildren
some blow inheritances on bad investments and lavish
lifestyles, experts say family fortunes most often get
destroyed because wealth creators fail to teach
successive generations how to build on their successes
or why a lasting legacy is important.
is at stake for banks, estate planners and others in the
financial services industry.
boomers are expected to hand down an estimated $30
trillion to their children and grandchildren over the
next three decades. This inheritance boom will build
sharply in the coming years and peak around 2031,
according to research from Accenture.
estimated 10 percent of America’s wealth is expected
to change hands every five years through inheritances
and gifts, continuing through the year 2045.
services firms are vying for these trillions, keenly
aware that at least two-thirds of children fire their
parents’ financial advisers after receiving an
inheritance. That reality brings urgency to the maxim
that it is much easier to retain assets than find new
clients. Understanding the different needs of each
generation can build loyalty along with financial
skills, wealth managers believe.
generations may think it’s hip to have a family
foundation, but they view it in a different way,"
said Jill Shipley, a family dynamics consultant with
Abbot Downing. "They don’t just want to write a
check. They want to be engaged and actively
books and multimedia presentations on family history are
more than just a fun free perk for the well-to-do,
wealth historians believe. The stories put family
members at the kitchen table during the Great
Depression, document the first sales receipt or bring to
light a harrowing passage to America. The narrative
helps affluent families develop a mission statement as
they pass the torch.
history can help the future generation see a grander
narrative, to see the institutions the family has helped
develop and the impact that it has had on the community
as a whole," said Karen McNeill, director of family
history at Ascent Private Capital Management, a division
of Minneapolis-based U.S. Bank that works with
ultra-high-net-worth individuals and families.
entirely meant to touch personally and emotionally on
who you are, where you came from and where you are
going," said Anderson, who holds a Ph.D. in history
and in a four-decade career at Wells Fargo has built up
the bank’s archives, created several museums and
helped the bank acquire a modern fleet of stagecoaches.
histories can connect the generations to a common theme,
"wealth therapy" can tackle generational
conflicts, such as what is keeping Dad from stepping
aside from the family business.
guide families through tricky ground," said Kristen
Armstrong, a psychologist and strategic wealth coach
their pedigrees in psychology, practitioners such as
Armstrong insist they act more as coaches than shrinks.
able to facilitate difficult conversations around
spending, around loaning money, about borrowing
money," she said. "For most families, it’s a
tremendous relief to deal with issues they’ve only
been stuck on before and not been able to see their
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Downing’s Anderson and his history team research
census data and burrow into family scrapbooks, old
diaries and tall tales. They record oral histories and
produce books and multimedia CDs that trace a family’s
roots back multiple generations if possible, often to
when the earliest members first set foot in America.
end result often includes a presentation at annual
business meetings or family gatherings at the old
homestead in far-flung and remote locales.
maps, genealogy tables, family trinkets, photos and
documents are spread across giant tables "like a
church buffet of colorful dishes," Anderson said.
impact can be profound.
an object lesson in the present about how the fortune
was built on the shoulders of a lot of people who worked
extremely hard — and don’t blow it going into the
future," he said.
can help families arrive at what Anderson calls a
"collective stewardship." By helping the
family rally around a common purpose, upcoming
generations are more likely to see the value of
preserving wealth for the future.
advocates bringing even shameful secrets to light —
children born out of wedlock, riches gained through
slave ownership or family dynasties derived from
clear-cutting forests. An unvarnished history helps
current generations accept the skeletons in the closet
and move on.
also can clear up family myths.
who earned a Ph.D. in history from the University of
California at Berkeley, shared the story of an
environmentally minded fourth-generation family member
who became enamored of a river in Alaska named after his
great-grandfather. The family had long believed the
naming was a trade for permission to open the area to
out the great-grandfather had gone on a six-week journey
in remote regions and roughed it using traditional
ways," McNeill said about her research. "The
indigenous Alaskans were so impressed they named the
river after him."
discovery thrilled her client and further anchored his
desire to support efforts to protect the environment
around the river.
is more than money," McNeill said. "It can
help families do great things."