Welcome to Wealth of Wisdom: Top Practices for Wealthy Families and Their Advisors, or, as we call it, Wealth of Wisdom 2.0.

Why “2.0”? Because it follows our first book, Wealth of Wisdom: The Top 50 Questions That Wealthy Families Ask. In that volume, we collected essays from leading practitioners in the field of family wealth, each of whom wrote about a question that client families face in managing significant financial wealth or a family business together. Those essays aimed to deepen readers' thinking and their understanding of the complexity of the task of mixing money and family.

This volume now turns that thinking into practice. As in Wealth of Wisdom 1.0, we have gathered insights from leading practitioners from around the world—more than 60 of them. But this time, we asked our authors to share with you, our readers, the tools, practices, or exercises that they had found most useful to families in their many years of advising.

The result is a book that complements Wealth of Wisdom 1.0. A thoughtful plan begins with recognizing the problems or questions to be addressed. But it then moves from that recognition into well-grounded action.

While readers would benefit from exploring Wealth of Wisdom 1.0 first, it's not required in order to use the exercises and practices contained here in this book. In the rest of this Introduction, we will share with you how we created this book and how you can get the most out of it.

To help you orient yourself to the many tools and exercises in this book, after the Introduction we have added a brief section, “Assessing Your Family's True Needs,” which contains an exercise to guide you in your reading. This exercise is based upon Wise Counsel Research's Family Balance Sheet™, an assessment that has been used by more than 200 global families to identify areas to grow their “qualitative,” that is, nonfinancial capital over generations.

Who Are Our Contributors?

Family wealth is as old as families. But the field of professional advice to families with significant financial assets is relatively young. It has grown out of the related fields of law, investments, and psychology. The combination of these different practices reflects the complex and many-sided nature of the work of managing financial wealth over generations of a family.

Even though the field itself is young, there are professionals who have been practicing in it or its predecessor fields for many years. Those are the people to whom we turned to provide contributions to this book. Each of our authors has decades of experience working with wealthy families. They are leading consultants, lawyers, psychologists, investment advisors, teachers, and speakers. We selected contributors who are prominent in the field not only through practice but also through publishing articles, essays, or books of their own. Some are themselves members of families with significant financial wealth.

As mentioned previously, we asked each contributor to write about the one practice, tool, or exercise that he or she found most useful to families. We worked with our authors to make these practices as accessible as possible to readers who may choose to apply them on their own. We also shared our potential list of practices with colleagues to identify gaps in our lineup. The result is, we believe, the first truly comprehensive set of tools offered to general readers and the field.

What Are the Practices?

To organize this book, we have divided the 62 different exercises into nine separate sections. These section divisions are not hard and fast. Since family wealth is an inherently interdisciplinary topic, an exercise that may primarily be about, say, “Planning” may also have great relevance to “What Matters Most” and “Family Dynamics.”

Here is a brief overview of these sections:

1. Thinking through What Matters Most: Chapters in this section help to clarify family members' values and their beliefs about what matters most and fosters well-being. These chapters also draw attention to the different needs of family members at different stages of life, such as managing cognitive decline in family leaders.
2. Becoming a Learning Family: A key strength of families who succeed over time is to become a shared learning organization. Chapters in this section offer ways for families to organize their shared learning (such as creating engaging curriculums) and be sure to benefit, as a whole, from individuals' self-directed learning.
3. Planning Thoughtfully: Planning takes the insights from shared learning and values and turns them into thoughtful action. The chapters in this section offer specific avenues of action from creating a family bank to identifying the family's “infrastructure” needs and much more.
4. Investing Wisely: Wisely investing financial wealth in the context of family takes more than experience with finance. As chapters in this section show, families also need to practice understanding risk, spending, and portfolio construction.
5. Seeking Sound Advice: Since the field of family wealth is so complex, families face a host of advisors to choose from to help them manage their affairs. The chapters in this section offer ways for you to assess the choice of advisors, such as trustees, coaches, or a family office, as well as insights into understanding how much advisors are paid.
6. Raising the Rising Generation: The “rising generation” is the future of the family, whether they are rising in their teens or in their 40s or 50s. Families who succeed over time create rituals to instill a sense of responsibility in their rising generation members; they also, as these chapters show, take specific steps to invite younger members to join the family “enterprise,” to develop effective leadership succession, and to ensure that rising generation voices are heard in the management of the family's affairs.
7. Navigating Family Dynamics: The lifeblood of family is communication, which in turn builds trust and lays the foundation for effective collaboration. The chapters in this section offer means for better understanding the particular dynamics of your family and then enhancing relationships, across generations or within a generation (such as among siblings).
8. Making Shared Decisions: A family that is going to manage significant assets or a business enterprise together must learn to make decisions together. This takes time and practice. The chapters in this section give readers specific practices for becoming more aware of how you are making decisions now and how to provide structure and clarity to your desired decision-making structure, such as in well-designed family meetings with agreed-upon ground rules.
9. Giving Together: Another strength of families that succeed over generations is fostering connections to communities beyond the family itself, often through shared giving. The chapters in this section give you a roadmap for thinking about your philanthropy in a strategic way, as well as for encouraging philanthropy among different generations of the family.

How to Use This Book

As with Wealth of Wisdom: The Top 50 Questions Wealthy Families Ask, this book is a collection of resources. It is not meant to be read straight through, from cover to cover (although that is an option).

To help you orient yourself to the book as a whole, after this Introduction we have provided a section entitled, “Assessing Your Family's True Needs.” This section will guide you through a brief self-assessment of your family to identify your family's needs in a variety of areas. As mentioned, this self-assessment is based on the Family Balance Sheet™, a diagnostic tool developed by Wise Counsel Research that has been used by families around the world who manage significant wealth or operating companies together. This self-assessment can identify areas of opportunity for growth and learning that you may not even have considered. Your results on the self-assessment will then guide you to specific sections of the book to consider more closely.

At the beginning of each of the nine sections of this book, we have provided a brief description of the section and of each of the chapters in it. Let these chapter descriptions guide you to an appropriate starting point.

You can also simply review the table of contents and pick out chapters whose titles sound relevant to the task and challenges that your family is facing at present. As you begin to read, each chapter will also likely raise questions that may direct you to other chapters in turn.

Almost all the chapters also follow a similar format: Each summarizes the recommended practice, tool, or exercise; describes the process for using it with your family; highlights the results or outcomes you can expect from using it; offers a case example of its use; and then suggests additional readings for you to explore the topic further if you wish.

Many of the chapters contain charts or checklists that embody the specific tool or practice whose use they describe. These checklists are designed so that you can use them yourself or with your family members. When in doubt, it's always wise to seek professional consultation or a professional facilitator to help you and your family make the best use of a specific tool or exercise. But with that caveat in mind, these exercises are offered with the hope that you “do try this at home”!

Families are dynamic organizations. They change over time, as members pass away, new members join the family or are born or grow up, and as family members learn and develop throughout their lives. Given the reality of change, our hope is that your use of this book changes over time too. Try the self-assessment each year to see what new needs and what new possibilities have arisen, and what practices or exercises might speak to you with new relevance.

Summary

The task of managing financial wealth together as a family has often been described as a journey. As with any journey, it is crucial to think through where you are trying to get to, based on your desires, values, and needs. It is also crucial to prepare for the journey with the needed supplies. This book aims to equip your family with tools that have passed the test of time. We hope that these practices and exercises contribute to your family's success, as they have for so many other families around the world.