How to Prepare the Next Generation to Manage Family Wealth
- Apr 1, 2023
- 5 min read
Updated: 3 hours ago
Most families that lose their wealth across generations don’t lose it to bad investments or market crashes. They lose it because the rising generation was never prepared to steward what they inherited.
In this episode of The Artisan Podcast, Arthur Salzer, CFA, Founder and CEO of Northland Wealth Management, speaks with Dr. Kirby Rosplock, PhD, founder of Tamarind Partners and Tamarind Learning, about why next-generation education is the most critical and most overlooked factor in preserving family wealth, and what families can do to close the gap.
Why Wealthy Families Lose Their Wealth Across Generations
The “shirtsleeves to shirtsleeves in three generations” pattern is not a myth. Research consistently shows that families have less than a one-in-three chance of maintaining wealth through multiple generations. The causes are rarely financial in nature. They are failures of communication, education, and preparation.
Rosplock speaks from direct experience. Her own family built its wealth in timber over 130+ years. When she was eventually invited to join the family board, she found herself “super educated but super naïve” about her own family’s enterprise. Despite an MBA and PhD, she had never been prepared for the specifics of the family’s business structures, governance, or financial decision-making. The women in her family had been systematically excluded from business participation for generations.
“I realized, even though I have tons of academic knowledge and a lot of financial information, working in a closely held board environment where women had never graced prior was all new, really new for me. It was a humbling moment.”
— Dr. Kirby Rosplock, PhD, Founder, Tamarind Partners
The Education Gap: Families Invest in Universities but Not in Wealth Literacy
One of Rosplock’s sharpest observations is the paradox of how successful families approach education. They are intensely purposeful about getting their children into the best high schools, universities, and graduate programs. But when it comes to educating those same children about what the family actually owns, how its structures work, and what stewardship requires, the approach is “somewhat Cavalier and ad hoc.”
The result is a generation of beneficial owners who may have excellent academic credentials but lack the specific knowledge needed to participate meaningfully in family governance, trust administration, investment oversight, or business succession. They don’t understand the difference between being a shareholder and being a board member. They don’t know how to read trust documents. They haven’t been taught how to evaluate whether the family’s advisors are serving the family’s interests.
“So many families don’t have doers. They have beneficial owners. People that are not going to be contributors, not going to build wealth, not going to lead the next decade of the family business. And that’s probably the biggest mistake families make: they don’t cultivate the ones that could be exceptional, early enough.”
— Dr. Kirby Rosplock
A Structured Approach: How Tamarind Learning Works
To address this gap, Rosplock built Tamarind Learning, an online education platform designed specifically for family members, beneficiaries, and their advisors. The platform originated from a consulting engagement with a complex blended family that had members ranging from sophisticated, experienced professionals to young adults fresh out of college. The boardroom wasn’t a safe learning environment for the less experienced members, so Rosplock built a virtual system where everyone could learn at their own pace without judgment.
The flagship program, the Accredited Beneficiary Stewardship Program, covers ten course areas organized into three tracks: stewardship fundamentals (what it means to be a beneficiary, a trustee, and a steward), technical knowledge (estate planning, trust structures, and tax), and finance and administration (investing, working with advisors, and financial reporting). The platform includes quizzes, discussion boards, document repositories, and workbooks.
Critically, Tamarind Learning has built a Canadian-specific version that addresses the differences in Canadian trust, tax, and estate planning law. Northland Wealth currently has client families using the platform, and the feedback has been positive.
Family Banks: Funding the Next Generation’s Entrepreneurship
One of the more practical topics in the conversation is the concept of family banks: structures through which families lend capital to the next generation for entrepreneurial ventures, rather than investing externally in private equity or public markets.
Rosplock distinguishes between “soft banks” and “hard banks.” Soft banks have more flexibility and forgiveness if a venture fails. Hard banks operate with the rigor of a commercial lender: defined repayment terms, collateral expectations, and consequences for default. The right structure depends on the family’s culture and objectives.
“Family banks work best when there’s a culture of understanding what success looks like on the other side of using those funds. Have clear criteria, build processes and metrics. And don’t make the family bank their first loan. Have them seek outside capital first, because that raises the bar on the business plan and the likelihood of success.”
— Dr. Kirby Rosplock
The risk of poorly structured family banks is not just financial. If one family member receives capital without rigorous vetting, other members will expect the same treatment, creating internal competition and resentment that can fracture family relationships.
Why Legal Structures Alone Don’t Preserve Wealth
Both Salzer and Rosplock emphasize that legal mechanisms, such as trusts, restrictive covenants, and lock-up provisions, are necessary but insufficient. As Salzer puts it: “You grab wealth too tightly, and it still slips through your fingers like sand.”
Rosplock frames this around the impermanence of financial capital. Markets fluctuate, businesses evolve, and fortunes can evaporate. What endures is human capital: the knowledge, values, communication habits, and governance structures that enable a family to make good decisions together over decades. Developing that human capital requires intentional, structured investment in the rising generation, not as an afterthought, but as a core family strategy.
Northland’s founding mission reflects this same principle. The firm was built around the idea that growing a family’s human capital alongside its financial capital is what prevents the shirtsleeves-to-shirtsleeves pattern. Next-generation financial education is listed as a core service because investment management alone is not enough to preserve wealth across generations.
About the Guest
Dr. Kirby Rosplock, PhD is the founder of Tamarind Partners, named Best Family Office Management Consultancy (2019) and Best Family Wealth Counseling (2019, 2022) by the Family Wealth Report. She is also Chief Learning Officer and founder of Tamarind Learning, an online education platform for families and beneficiaries, named Best Specialty Service Provider (2022) by the Family Wealth Report. Born into a complex enterprising family, Rosplock brings direct experience as a beneficial owner, inheritor, fiduciary, and board member. She is the author of The Complete Family Office Handbook (Wiley, 2014, 2021) and The Complete Direct Investing Handbook (Wiley, 2016).
Make sure to check Northland Wealth’s YouTube Channel for more episodes.
