Insights, Wealth Planning

Family Financial Education: Teaching the Next Generation About Wealth and Responsibility

by Sequoia Financial Group

April 6, 2026

Generational wealth doesn’t disappear because families fail to invest well. It disappears because the knowledge, communication, and decision-making structures surrounding that wealth were never intentionally passed down.

Research frequently cited in the wealth-planning literature illustrates the risk: approximately 70% of families lose their wealth by the second generation and 90% by the third, a pattern commonly referred to as “shirtsleeves to shirtsleeves.”¹ While the precise percentages vary by study, industry research consistently confirms the underlying truth: wealth erosion is driven more by human and behavioral factors than by market performance.²

Why wealth is often lost across generations

Investment returns and tax efficiency matter, but they are rarely the root cause of generational wealth loss. More often, breakdowns occur because:

Money is not discussed openly. Studies show many parents avoid conversations about inheritance, expectations, or financial responsibility, leaving heirs unprepared when wealth eventually transfers.³ Silence creates confusion, entitlement, or fear, none of which support good decision-making.
Financial capability isn’t developed early. The Consumer Financial Protection Bureau emphasizes that adult financial well-being is shaped long before adulthood, through early exposure to money concepts and real-world practice.⁴ Without that foundation, even well-intentioned heirs may struggle to manage complex financial decisions.
There is no shared framework for stewardship. When families don’t define how decisions are made or when to involve professionals, wealth can quickly become a source of conflict, fragmentation, or costly mistakes.

What family financial education really means

Family financial education is not about turning children into financial professionals. It’s about building confidence, context, and continuity, so future generations understand both the mechanics of money and the values behind the plan.

A thoughtful approach evolves over time:

Early years: Basic lessons around earning, saving, spending, and giving.
Adolescence: Budgeting, goal-setting, and understanding tradeoffs. Adolescence may also be a good time for an introduction to investing, stocks, and bonds.
Young adulthood: Banking, credit, taxes, and the consequences of financial choices.
Adulthood: Clarity around family intentions, professional support, and long-term stewardship, and preparing for marriage.

The objective isn’t perfection, it’s preparedness.

You don’t need to know everything to protect your legacy

One of the biggest misconceptions families face is the belief that they must understand every financial detail to get this right. You don’t. What you need is a coordinated plan and trusted professionals who help translate complexity into a strategy that reflects your wishes.

That’s where Sequoia Financial Group partners with families. Through integrated wealth planning, Sequoia helps clients:

Align financial strategies with family goals and values,
Prepare the next generation for responsibility,
Reduce confusion during transitions,
And preserve legacy across generations.

Family financial education, combined with a coordinated wealth plan, can dramatically improve the odds that what you’ve built continues to support your family’s future. With the right guidance, wealth can become more than an inheritance; it can be a shared, enduring purpose.

Sources

Reuters – “A little honesty might preserve the family fortune”
https://www.reuters.com/article/markets/wealth/a-little-honesty-might-preserve-the-family-fortune-idUSKBN0OX1RG/
CFA Institute – “How real is the third-generation curse, and how can financial advisors tackle it?”
https://www.cfainstitute.org/insights/articles/third-generation-wealth-curse-advisor-solutions
Fidelity Investments – “Fidelity® Study Finds the Great Wealth Transfer Leaves Families Poised to Build Stronger Financial Futures—if They Talk”
https://newsroom.fidelity.com/pressreleases/fidelity–study-finds-the-great-wealth-transfer-leaves-families-poised-to-build-stronger-financial-f/s/3c72b6d3-9ab6-400a-95e7-f4b30e43db64
Consumer Financial Protection Bureau – “Financial Literacy Annual Report 2025–12”
https://files.consumerfinance.gov/f/documents/cfpb_financial-literacy-annual-report_2025-12.pdf

The views expressed represent the opinion of Sequoia Financial Group. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While Sequoia believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and Sequoia’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in equity securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. Past performance is not an indication of future results. Investment advisory services offered through Sequoia Financial Advisors, LLC, an SEC Registered Investment Advisor. Registration as an investment advisor does not imply a certain level of skill or training.

Investment advisory services offered by Sequoia Financial Advisors, LLC. Registration as an investment advisor does not imply a certain level of skill or training. This material is for informational purposes only and is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Diversification cannot assure profit or guarantee against loss. There is no guarantee that any investment will achieve its objectives, generate positive returns, or avoid losses. Sequoia Financial Advisors, LLC makes no representations or warranties with respect to the accuracy, reliability, or utility of information obtained from third-parties. Certain assumptions may have been made by these sources in compiling such information, and changes to assumptions may have material impact on the information presented in these materials. Sequoia Financial Advisors, LLC does not provide tax or legal advice.