Wealth rarely survives 3 generations

helping families succeed

The Statistics

70% of families fail to transition wealth to the 2nd generation and 91% to the 3rd

Children (Gen 2)
70% failure
Their children (Gen 3)
91% Failure
Why this happens – #1

Emotional strain within the family

Families are like a spider's web; they are only as strong as their weakest link.

Families are also emotionally complex and unpredictable; they become markedly more complex as each new generation emerges.

They are made up of individuals who each have their own perspectives, beliefs, expectations, hopes, desires and fears. This creates the constant possibility for conflict to arise as wealth magnifies problems tenfold.

Why this happens – #2

Misdirected Focus

Wealth creators focus the vast majority of their energy on the Financial Capital - they build wealth and then look to preserve it through financial, legal, estate and tax planning.

As a consequence, they often fail to adequately address the family dynamics (the Human Capital) and therefore do not build an effective and harmonious team which can govern and control this wealth inter-generationally.

Why this happens – #3

Overly controlling behaviour

Naturally, wealth creators want to be in control; that's how they created this wealth in the first place. Most are also optimists believing they will live a healthy life into their 90's and beyond.

This often translates into them not sharing important information with key people until it’s too late. This can leave the family and wealth very exposed in the event the wealth creator becomes incapacitated or passes away and result in disastrous consequences.