Why Family Capital Matters: Building Wealth With Intention Across Generations

The word “capital” often brings to mind financial wealth—stocks, bonds, and real estate. But for families with significant resources, there’s another form of capital that can be even more influential: the human and relational capital that binds a family together. This “family capital” encompasses shared values, trust, and a sense of purpose. Building family capital isn’t just complementary to growing financial assets; it’s a cornerstone of long-term legacy.

Families that intentionally nurture their shared values, relationships, and knowledge are likely to be more successful at sustaining wealth across generations. In fact, strengthening family capital can be just as vital as growing financial capital when it comes to sustaining success over time. Research from the Credit Suisse Family 1000 Report underscores this point: publicly listed family-owned businesses have outperformed broader equity markets by approximately 3.9% per year between 2006–2022, demonstrating the long-term advantage of family-driven stewardship and intentional planning.

Guiding our clients through this process is critical to the work we do. To help you understand what goes into the discussions with the families we serve, let’s start by defining what family capital is and why it matters.

What Exactly Is Family Capital? 

Family capital is the collective strength of a family’s resources across four main dimensions: 

• Financial Capital: The tangible assets—cash, investments, property—that provide security and opportunity. 
• Human Capital: The skills, knowledge, education, health, and personal development of family members. 
• Social Capital: The relationships, networks, and trust that connect family members to each other and to their communities. 
• Cultural Capital: The traditions, stories, and shared values that give a family its identity and sense of purpose. 

How and Why Does Family Capital Matter? 

Growing and nourishing and investing in family capital can support families in prospering. Financial wealth can fluctuate, but a family rich in human, social, and cultural capital can adapt and thrive. These forms of capital can: 

• Strengthen bonds: Shared values and traditions keep families connected. 
• Create opportunities: Education and networks can open doors for future generations. 
• Build legacy: A well-defined family identity helps ensure wealth is used with intention, not lost to misalignment or conflict.

Practical Steps for Multigenerational Families: 

Building family capital is an intentional process. Here are some actionable steps: 

1. Define Your Family Mission
   Creating a mission statement can feel abstract and overwhelming, so start simple. Ask three questions—What do we value most? What do we want to preserve? What impact do we want to have? Write down answers from each family member, look for common themes, and craft a short statement (one or two sentences) that reflects those shared priorities. Keep it conversational and authentic—this should be your family’s compass, not a corporate tagline.
2. Invest in Education and Development
   Allocate resources for lifelong learning—formal education, mentorship, and skill-building for all generations.
3. Preserve Family Traditions
   Document family history, celebrate traditions, and share stories that reinforce identity and purpose. 
4. Foster Open Communication
   Hold regular family meetings to discuss goals, responsibilities, and opportunities. Transparency can build trust and reduce conflict, and regular meetings can provide consistency and accountability. 
5. Create a Governance Structure
   For families with significant assets, consider a family council or advisory board to guide decisions and maintain alignment. 
6. Engage in Philanthropy Together
   Giving back as a family can strengthen social capital and reinforce shared values. Encourage gatherings where everyone can discuss what causes matter most. 

We are in the midst of the largest inter-generational wealth transfer in history.  Building wealth is only part of the story—preserving it for generations requires investing in what truly matters: your family’s values, relationships, and shared purpose. RWA can help you identify the principles that define your family, create opportunities to learn and grow together, and explore ways to give back as a united front.