Wealth Managers Bring Values into Family Investment Discussion

Advisers supporting the needs of the ultrawealthy are getting generations to explore their families’ legacy, financial and otherwise.


Traditionally, a wealth manager’s key job function is to help families preserve and manage money for future generations. This task is not simple. According to studies by the Williams Group, a San Clemente, California, wealth advisory firm, as little as 10 percent of multigenerational wealth reaches the third generation. But an even more difficult task than preserving capital, say advisers, can be holding on to the values of prior generations to ensure that the family legacy remains as the wealth creators intended. Multifamily offices are accordingly offering more advisory services intended to help the heads of ultrawealthy families build a philanthropic mission that will carry out the family’s legacy, both in terms of wealth and values.

“We have client families who are already in the fifth generation, preparing for the sixth and seventh,” says Ted Cronin, chair of the investment committee and CEO at Manchester Capital Management. Based in Manchester, Vermont, Manchester Capital started as a single-family office and grew into a client-owned firm that manages multigenerational wealth and institutional investments with more than $3 billion in assets under advisement. According to Cronin, exercises such as writing down family history as well as a mission statement or statement of values to pass down can help a family develop a sense of connectedness between generations.

Some advisers who are focused on preserving legacy and values expand the conversation beyond individual families. Threshold Group, an organization of family offices and private foundations based in Gig Harbor, Washington, launched an initiative in 2011 called “Community Square” that brings clients together to share stories and ideas about how to manage family wealth. “Our clients are focused on raising children to be smart, educated, self-sufficient stewards of wealth and on a conscientious approach to philanthropy and investing assets with a mission purpose,” says Kristen Powers Bauer, executive director for the initiative and senior managing director of the Western region for the firm.

The Threshold Group began as the private investment management arm of the Russell family, creators of Russell Investments, before expanding to manage the wealth of other families. Today the firm has 58 client families in more than 30 states and $3 billion in assets under management. To date, Threshold has found the response from clients to this peer-driven approach to be overwhelmingly positive.

Still, no matter how much advice a client can get from chatting with those in a similar situation, it is up to each family to develop its own decision-making process for creating a lasting legacy. And discussions about family values are not always easy, according to Bauer. Many times, she says, difficult conversations have to happen in the process, as patriarchs and matriarchs consider what the future may have in store as the dynamics of the world and within their own families are wont to change. “We like to say that we have courageous relationships, and we pride ourselves that we can have hard conversations if it’s in the best interest of the family,” says Bauer.

Independent wealth advisers are not alone in helping clients map out plans to create a lasting legacy. Increasingly, private banks are also getting on board. “We talk with our clients about not only what options exist to preserve wealth but also what is the purpose of that wealth,” says Erich Smith, executive director of family office and charitable solutions for BNY Mellon Wealth Management in Pittsburgh.


Smith’s firm has $184 billion in customer assets and is a division of New York–headquartered BNY Mellon, which oversees $1.6 trillion in assets globally. A key focus for it is to help clients create charitable vehicles to be managed in parallel to family wealth. Family foundations have been part of wealth management for centuries but typically with a single family member making the decisions about the organization’s purpose. According to Smith, the involvement of younger generations in the creation process is an ideal way to reinforce values with them and their descendants. Ultimately, he says, any exercise relating to values is about ensuring that young people find the right life balance as they mature and take charge of family responsibilities. “We like to say that it’s not about preparing wealth for the kids; it’s about preparing the kids for wealth,” Smith adds.

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