by Dowell, Pascut & Lee (2026) | Summary :
With an estimated $84 trillion set to transfer between generations by 2045, this paper argues that the traditional metrics used to measure family wealth success — asset preservation, investment returns, and tax mitigation — are fundamentally insufficient.
The core problem: roughly 90% of wealthy families lose their wealth by the third generation, and the primary culprits aren’t bad investments. They’re breakdowns in communication, lack of heir preparation, and an absence of shared purpose. In short, the problem isn’t money — it’s meaning.
To address this, the authors introduce Flourishing Performance Indicators (FPIs), a framework drawn from the Global Flourishing Study — described as the most ambitious longitudinal social science study of human flourishing ever conducted. The framework proposes six key indicators families should track alongside financial ones: Psychological (mental and emotional well-being), Physical (health and wellness), Purpose (meaning and direction), Principles (character and values), People (relationships and belonging), and Prosperity (financial and material stability).
The paper critiques what it calls the “false security of financial metrics,” noting that beyond a certain threshold, more money does not correlate with greater happiness — and in many cases correlates with less. Inherited wealth in particular can breed anxiety, paralysis, and alienation among younger family members.
A case study illustrates the gap: a second-generation entrepreneur who built a financially successful family office but watched his family quietly fracture — children disengaging, competing foundations forming — because flourishing was never defined beyond the balance sheet.
The authors also note that the word “wealth” originally derived from Anglo-Saxon roots meaning “well-being,” and argue for reconnecting financial capital to deeper forms — spiritual, social, intellectual, and human capital — that legacy conversations rarely address.
The paper ultimately challenges families and their advisors to redefine success by asking not just “Did the assets grow?” but “Are we flourishing as a family?” — and offers FPIs as a practical roadmap for doing so.
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