First Generation Wealth Family Office

by Richard C. Wilson & Family Offices Group Association Team

I read an interesting story today on the issues that “new money” families face in managing and maintaining their wealth. The article in Barron’s highlights one family office that actually specializes in first generation wealth creators, or families that are newly wealthy as opposed to the more conventional idea of a family office client as a family that has preserved and growth their wealth through multiple generations. The article is worth a read as it sheds some light on the way that family offices can help service first generation wealthy families like Wistar Morris III’s Signature Financial Management family office.

Wistar Morris III is the patrician-sounding Signature principal running his office from Charlottesville, Va., and politely calls his clients “first generation wealth creators.” (There’s even an “instant wealth” client in the form of a big-time lottery winner.) Only 25% or so of Signature’s client base are Old Money, although many of the original wealth creator clients now also have grandkids in the mix. Signature has $2.5 billion under management from 150 families around the country, with clients tending to be in the $10 million to $300 million asset range.

I spoke with Morris hoping to find out if there were any truisms about new wealth that aren’t immediately obvious. Most of Morris’ clients, he says, had their head down working, building wealth on paper, when a sudden liquidity event – a private equity firm bought out their business, a partner cashed out of a big firm – overnight made them cash-rich. Sudden-wealth moments are usually followed by several years of psychological adjustment.

“It’s definitely a shock,” says Morris. “Some overspend in the excitement of it all. They get it into their heads, ‘This is what wealthy people do – buy a couple of homes, get their NetJets card.’”

What inevitably happens, after a couple of years on a spending tear, is that all these acquisitions start eroding their quality of life, heaping on burdens and complexities that come with, say, owning four houses in locations stretching from Hawaii to Paris. Source

tags: first generation wealthy, first generation wealth, first generation family office, first generation wealth creators, first generation money, first generation Signature family office, Signature family offices, family offices, multi-family offices, Wistar Morris III family office, Wistar Morris III Signature Family Office Founder, Wistar Morris III Signature multi-family office

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