Family Dynamics

Question 1

Only ____% of families sustain wealth beyond the shirtsleeves to shirtsleeves conundrum.

Answer 1

10%

Question 2

Approximately _____ of family wealth is lost by the second generation.

Answer 2

70%

Question 3

Williams and Preisser suggest that 60% of wealth transfer failure is due to what?

Answer 3

a breakdown in communication and trust within the family unit.

Question 4

38% (the highest of any quadrant) of wealthy families communicate and frame wealth in the following way: _______________________________.

Answer 4

low support, high control

Question 5

14% (the lowest of any quadrant) of wealthy families communicate and frame wealth in the following way: __________________________.

Answer 5

high support, low control

Question 6

According to the financial, intellectual, social, and human capital model by Jay Hughes, “governance” falls under which category?

Answer 6

intellectual

Question 7

Key reflections of one’s wealth orientation and skills include the following:

Answer 7

attitudes, behaviors, identity, relationships, language, and approach to money

Question 8

According to Stacy Allred, the three pathways for estate design include _______________________.

Answer 8

division, preservation, and growth

Question 9

According to Stacy Allred and others, successful families teach their children the following primary uses of money: save, spend, ________, and share.

Answer 9

invest

Question 10

According to numerous studies, what percentage of next generation wealth changes financial advisors within 2–3 years of inheriting significant sums of money?

Answer 10

90%

Question 11

Family mission statements help families make difficult choices when faced with unexpected circumstances by including the following:

Answer 11

goals, priorities, values, strengths and weaknesses

Question 12

According to academic and educational research, the age range during which children are best able to understand financial and economic application AND are still forming their own opinions regarding such is:

Answer 12

age 7-13

Question 13

What percentage of high-net-worth individuals in America are self-made millionaires, making their fortunes during their own lifetimes as opposed to inheriting it?

Answer 13

80%

Question 14

________ ________ includes one’s knowledge, skills, health, motivation, endurance, effectiveness, character traits, experience, etc. (unique to each individual).

Answer 14

human capital

Question 15

The Jones family is struggling with developing a system or structure to help ensure acceptable stewardship and transfer of their multi-generational family wealth. Which of the following best describes the area or function with which the Joneses are struggling?

Answer 15

family governance

Question 16

What are considered the four core services delivered within a family office?

Answer 16

advisory, financial planning, strategy, governance

Question 17

It is not uncommon for next generation family members of significant wealth to feel guilty and/or undeserving of their personal wealth. Oftentimes these individuals develop a heightened sensitivity or focus on philanthropy. This is an example of _____________.

Answer 17

social capital

Question 18

According to research cited by Grubman and Jaffe, what percentage of parents and adult children, respectively, indicated a desire to get to know each other’s financial advisors?

Answer 18

70%, 60%

Question 19

The following document is intended to create or develop a shared core set of principles and beliefs of the family unit. All members of the family unit should participate in crafting and feel comfortable with the result. This document also defines actions that the family will take to sustain its legacy in the next generation.

Answer 19

family values statement

Question 20

Which of the documents below typically: formalizes the family structure and mission of the family business, defines roles and responsibilities, develops policies and procedures in line with family values and goals, and determines the process for resolving family business disputes?

Answer 20

family charter or constitution

Question 21

Research done by Grubman, Jaffe and others indicates the following challenges and commonalities of many so-called “cross-class” couples of wealth, where one individual (who did not grow up with significant wealth) marries into a family of wealth.

Answer 21

arguments about priorities and spending money, jealousy, sometimes leads to chronic illness

Question 22

April and Patrick approach their wealth advisor specifically for help with negotiation, resolution, and refereeing. April uses her role in the family to justify power and control while Patrick feels appreciative but somewhat vulnerable. Which of the following family roles (relationships) commonly struggle with these challenges?

Answer 22

second generation cross-class couples

Question 23

According to research, effective measurement of outcomes is performed in less than ______ of all formal family wealth education plans.

Answer 23

20%

Question 24

According to Pullen and others, all families with a family business must effectively address the following primary (and potentially overlapping) areas and work through the complex relationships and conflicts that arise from them.

Answer 24

family, business, ownership

Question 25

JumpStart Coalition for Personal Financial Literacy reports that _____ of students say they learn everything they know about money from their parents, and that _____ of parents believe their children learn everything they need to know about money at school.

Answer 25

90%, 87%

Question 26

The following tool helps families and their advisors better understand family members, their roles, relationships and history. Whether an individual has married into the family and/or works in the family business is often noted.

Answer 26

family genogram

Question 27

Alignment of shared intention and core principles can be done through a…

Answer 27

wealth purpose statement