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A Further Look | Sep 21, 2022

Facing Uncertain Times? Rely on Family-First Thinking

David B. Root, Jr.


“There is no doubt that it is around the family and the home that all the greatest virtues…are created, strengthened and maintained.” – Winston Churchill

We’ve all heard the saying that when someone is near the end of their life, they don’t look back and wish they had worked more, but rather they wish they had focused on how they tended to their family. It has also been said countless times that when you die, you can’t take your money with you.

With all the uncertainty in the world surrounding financial markets, spiraling inflation, global leadership questions, taxes, health issues, and labor shortages, among others, it’s easy to let emotions drive a lot of what we do, especially when it involves family finances. Imagine owning a family business today in the UK where firms have experienced a 424% rise in gas costs and a 349% increase in electricity prices since February of 2021¹. That’s when the strength of family values is tested most. But strong families don’t let emotions get in the way of a balanced and healthy approach to financial security.

As financial advisors, our focus needs to be on taking care of:

  • Our clients’ family needs
  • The need to care for others
  • The need for security
  • The need for freedom
  • The need for life balance
  • The need for peace of mind

To meet these needs, financial discipline should be taught and encouraged. Firms specializing in multi-generational family wealth services should be experts in family dynamics and in many cases, should understand their private businesses. The biggest job creators in our country are small businesses. Who starts small businesses? It is often families. 62% of the US workforce is employed by a family-owned business and they are responsible for creating 78% of all new jobs in the United States². With a fundamental grasp of family intricacies and business assets, financial advisors can better equip themselves to educate not only the family’s current matriarchs and patriarchs, but also succeeding generations who will one day step into leadership positions.

Business icon Lee lacocca may have said it best: “The only rock I know that stays steady, the only institution I know that works, is the family.”

Successful business leaders focus on the next generation, not the next quarter. More than 90 percent of private businesses feel they stand apart from non-family firms due to a long-term investment philosophy and personal commitment to employees and suppliers according to Family Enterprise USA.³ Even so, only 30% of family-owned businesses last until the second generation, and only 12% will survive into the third generation according to the Family Business Center⁴.

Sam Walton started a small business in Rogers, Arkansas in 1962. Now, ten thousand stores later and with $240 billion in net worth, the Walton family is still the largest shareholder in Walmart with a stake of just under 50%⁵. Sam Walton believed in leadership through service and worked that concept into the corporate structure of the business. Subsequent generations of Waltons carried this philosophy forward and it is reflected in the enduring success of the company and the family.

Contrast this with the Standard Oil breakup in 1911. John D. Rockefeller, the company’s majority shareholder and founder, had an estimated net worth of $400 billion in today’s dollars. Today, there are more than 170 living heirs with a combined net worth of $11 billion⁶. A princely sum, yes, but one that supports the belief that it’s not what you earn, but rather what you get to keep. Maybe the Walton family learned a thing or two over the years.

People and businesses are complex and require specialized financial advice. That’s why firms like ours that provide services for families with wealth intended to span multiple generations include CPAs, trust attorneys, insurance specialists, and other experts as part of a financial team. To help our clients build their family’s legacy, the approach requires a whole new level of service and delivery, optimizing everything we do in financial planning. Advisors must be excellent in all aspects including investment planning, cash and debt management, retirement planning, risk management, tax minimization, tax return preparation, and estate planning. Each element is critical to ensuring that a family’s hard-earned capital is not only preserved across generations, but also grown as successive ones join the family.

Importantly, a firm that serves the needs of families must embrace the unique values and virtues held dearly by each family—respecting others, espousing kindness, having a family-first attitude, making sacrifices, working hard, and giving back are a few values that are shared by many families. Our Generational Wealth team includes experts that can not only help create a clear, concise plan to meet one’s financial, personal, and charitable objectives, but also help families think through their own core values and memorialize them in a manner that allows the tenets remain part of the family’s ethos for generations.

A family office environment brings individual thinking from experts who also support others within the team. Disciplined and diverse, all parts come together to support clients’ needs in a holistic fashion. Beyond having two generations of our family within our firm, the whole team exercises family first thinking in serving our clients.
Providing for our families and others we care about is a responsibility we should all embrace. Pursuing excellence results in exceptional service and a promising future for everyone.

Like you, we believe in the words of George Bernard Shaw: "A happy family is but an earlier heaven."

Thanks for reading.

This material has been provided for general, informational purposes only, represents only a summary of the topics discussed, and is not suitable for everyone. The information contained herein should not be construed as personalized investment advice or recommendations. Rather, they simply reflect the opinions and views of the author. D. B. Root & Company, LLC. does not provide legal, tax, or accounting advice. Before making decisions with legal, tax, or accounting ramifications, you should consult appropriate professionals for advice that is specific to your situation. There can be no assurance that any particular strategy or investment will prove profitable. This document contains information derived from third party sources. Although we believe these third-party sources to be reliable, we make no representations as to the accuracy or completeness of any information derived from such sources, and take no responsibility therefore. This document contains certain forward-looking statements signaled by words such as "anticipate," "expect", or "believe" that indicate future possibilities. Due to known and unknown risks, other uncertainties and factors, actual results may differ materially from the expectations portrayed in such forward-looking statements. As such, there is no guarantee that the expectations, beliefs, views and opinions expressed in this document will come to pass. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. All investment strategies have the potential for profit or loss. Asset allocation and diversification do not ensure or guarantee better performance and cannot eliminate the risk of investment losses. The impact of the outbreak of COVID-19 on the economy is highly uncertain. Valuations and economic data may change more rapidly and significantly than under standard market conditions. COVID-19 has and will continue based on economic forecasts to have a material impact on the US and global economy for an unknown period.

David B. Root, Jr.


Founder & Chief Executive Officer

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