Why wealth often fails by the third generation | the advisory

Peter Leggett from Arrow Private Wealth states that managing wealth across generations extends well beyond financial numbers, encompassing family dynamics, shared values, and a long-term vision. Leggett observes an evolving trend among affluent families, describing a shift to “living legacy” conversations, where wealth transfer is no longer reserved for end-of-life but actively discussed with children and grandchildren. In his view, this transformation is partly a reaction to the record sums, estimated at over $4 trillion, moving between generations in Australia.

Leggett highlights that preserving family wealth sits at the top of concerns for many affluent families. He points out the importance of providing guidance and security while family members are still present, rather than simply leaving inheritances. Philanthropy and education increasingly factor into these wealth management conversations. Leggett emphasises the need for setting boundaries and clear expectations—empowerment, stewardship, and a focus on family purpose are key, rather than a sense of entitlement.,

Leggett warns that miscommunication and poorly managed succession planning can erode wealth more rapidly than market downturns. Drawing from experience, he advocates for early, inclusive discussions involving all key family members, including younger generations. Leggett believes education and active engagement help build resilience and uphold family values as wealth transfers to new hands.