In our culture, the phenomenon is called “from shirtsleeves to shirtsleeves in three generations.” In China, it is called “from peasant shoes to peasant shoes in three generations.” In Italy, the saying is “from the stable to the stars and back again,” and the Scottish expression is “the father buys, the son builds, the grandchild sells and his son begs.”

Research studies have found that about 70 percent of a high net worth family’s wealth is often gone by the end of the second generation, and 90 percent is gone by the end of the third generation. Contrary to standard belief, investment mistakes and changes in the economy are not at the root of these losses.

There is no shortage of books, TV programs, websites, companies, and songs expressing shared sentiments about money.  Ironically discussing how we actually invest our own is considered a taboo subject.

Marvin H. McIntyre wrote, “Money is the last taboo.  People will talk about their sex lives before they discuss their finances.”  According to one recent survey from Wells Fargo, nearly half of Americans say the most challenging topic to discuss with others is personal finances (44%).  But if no one is talking about it, how do we know what beliefs and behaviors divide those who get rich and manage to stay rich from those who do not?

Research has shown that in most families, 90% of inherited wealth is lost by the third generation.

When wealth is passed down through generations in a family, the long-term prognosis generally isn’t very good. Research has shown that in most families, 70% of inherited wealth is lost by the second generation, and 90% by the third. So it’s clear that the model for preserving wealth across generations is broken.

Just as an advisor should do due diligence on the investment managers he or she uses, prospective client’s are being encouraged to screen their financial advisor before they hand over their money.

How many people know how to “screen” a financial adviser?  And what is the screening process anyway—particularly when there are so many to choose from, and the pool is ever-growing?  The Bureau of Labor Statistics projected that by 2022, the number of Personal Financial Advisers will increase by at least 22%, a growth rate much faster than average.  They also reported the 2013 median income was $75,320 annually for a “personal financial adviser” and $71,720 per year for Securities, Commodities, and Financial Services Sales Agents.  Given the wide variety of designations and salaries of financial advisers brings us to the original question—what must you know about your financial adviser?

In the late-18th and 19th Centuries, Mayer Amschel Rothschild established five family banks, in Frankfurt, London, Paris, Vienna, and Naples, and assigned one to each of his five sons. His action secured the assets of Europe’s wealthiest family and preserved his descendants’ control of their wealth and affairs for generations. It gave the sons the tools to do business on their own and to cooperate with one another.