Bridging the Gap Between Generational Wealth: How Two Park City Wealth Advisors Are Reshaping the Family Office and Redefining Family Governance

·4-min read

70% of wealthy families lose their wealth by the 2nd generation and by the 3rd generation, 90% of the wealth is gone. This estimate is staggering. Study after study finds more than half of wealth transfers fail, not because of the quality of estate planning advice or structures in place, but instead due to poor communication and inadequate preparation when the day finally arrives.

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The disconnect is between the generation who learned how to manage their assets and the generation who refused to take the lessons of proper management to heart. As shown below, a 2020 Investor Generational Wealth Transfer Study shows the learning disconnect between parents and their children.

Source: Capital Group Practice Lab

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Conversations about wealth are often paired with investment advice, but that’s a narrow-sighted view that often leaves out important factors such as tax considerations and generational planning.

Bridging the gap begins with first understanding the need and benefit of having a neutral third party as a facilitator. This is an advocate that can help educate multiple generations on financial literacy, share investment philosophy, and help echo the family’s core values.

High net worth individuals and family patriarchs have increasingly turned to the services of a Family Office. The Family Office has multiple benefits. To start, with its personal attention to their clients that goes far beyond wealth management, it has the ability to address nearly every specific facet of a family’s financial needs. “Conversations about wealth are often paired with investment advice, but that’s a narrow-sighted view that often leaves out important factors such as tax considerations and generational planning.” said Bruce Greenwald, Co-Founder of Park City Family Office. Generational wealth planning is the ability to navigate a family’s shared long-term vision.

In the late 19th century, the Rockefellers pioneered the more modern

Family Office by incorporating multiple financial services.

In addition, it’s important to have an advocate with the skills to help bridge the communication gap between today’s very distinct generations. When communication is opened, then successful direction can be given. “It’s about the legacy of your family’s wealth and making a difference” added Morgan Irvin, Co-Founder of Park City Family Office. “That means finding the experts in each field and bringing them together for the most effective guidance.”

The concept of a Family Office has empowered wealthy families for generations. Origins date back to the mid-1800s when the three sons from the DuPont family split the management duties of their late father’s business and financial affairs. However, in the late 19th century the Rockefellers pioneered the more modern Family Office by incorporating multiple financial services “all under one roof”, bringing in trusted 3rd party advisors for counsel on the family’s financial affairs. Family offices started gaining widespread popularity in the 1980’s among wealthy families looking to strategically pass on their legacy to the next generation.

Family offices became more common in the years since 2010 after the rapid increase in valuations of technology companies led to many people having newly created wealth. According to a 2015 report by the Financial Times, the label "family office" was increasingly replaced by other business names, such as "private investment office", with services in relation therewith called "private company services" or "strategic philanthropy advice". A report released by the Federal Reserve showed U.S. household wealth had jumped to a record $136.9 trillion by the end of March 2021 indicating that more and more families could benefit from utilizing the resources and expertise of a Family Office.

Bruce Greenwald and Morgan Irvin are the founding partners behind Park City Family Office’s mission to steward families with wealth into establishing a legacy for future generations. Park City Family Office is a multi-family office dedicated to helping families establish a legacy of generational wealth. Similar to the Rockefeller model cited above, Park City Family Office provides a comprehensive suite of experts to meet the needs of their clients. This modern family office model incorporates wealth with values while protecting and preserving family legacies.

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