David Werdiger, writer, speaker, adjunct professor, revolutionized cloud-based recurring billing as he migrated from his second-generation family business to C-level technology growth company roles. He is a frequent speaker at International Society of Private Wealth Network events, presents case studies at private HNWI events, and public national conferences. Werdiger is a #1 International Best-Selling author of the book ‘Transition; How to Prepare Your Family and Business for the Greatest Wealth Transfer in History’ and Founder of the Nathanson Pearson Family Office in Melbourne Victoria Australia. Today Werdiger works from the #nextgeneration of EY Family Office Guide 2019 as the bridge between generations through The Nathanson Pearson Family Office Advisory. Utilizing technology tools like his exclusive Business Succession Risk Assessment (BSRA) programs and his Bridge Between Advisory Services (BBAS). Learn more about David Werdiger and his Programs of excellence at and on social networks @dwerdiger and @davidwerdiger.https://davidwerdiger.com
What is your legacy if you are the GOAT – the Greatest Of All Time?
Can it be about your family? Or is it just about you?
Warren Buffett recently announced that he’s stepping down after sixty years in charge.
His financial performance at Berkshire Hathaway was stellar; perhaps something that could never be repeated.
His successor, Greg Abel, has some big shoes to fill. He may struggle with the burden of comparison. What can his mark be on the world?
Buffett plans to gift 99% of his wealth to charity, under the giving pledge. That still leaves his children with an inheritance of a lazy couple of billion – each. How will they be remembered?
Legacy is your impact on the world around you and how you will be remembered when you’re gone.
Buffett’s legacy might be value investing, much like Steve Jobs’ legacy might be the iPhone. In the world of professional sports, we might think of Nadia Comăneci, Tom Brady and Michael Jordan. Stars who were so much brighter than the rest.
This form of legacy is centred around an individual.
The legacy of family is something quite different.
It’s about creating something enduring. It’s about continuity.
Founders of family enterprise are typically entrepreneurs, often with amazing rags-to-riches back stories. They are ultra-high performing, with immense self-belief and the ability to rally others around them.
But the shift from founder to head of a family dynasty can be challenging.
It involves a different set of skills.
Some founders’ lights shine so bright (even if they aren’t “the GOAT”), it remains all about them.
Their children grow up in their shadow, and sometimes stay there (even after they are gone).
The transition from G1 to G2 is perhaps the most difficult.
Because it requires a shift from one decision maker to more than one.
Something akin to the shift from autocracy to democracy.
That change cannot be underestimated.
One aging founder told me: “my children are my partners”.
He wasn’t speaking in legal terms because they were shareholders.
He considered them genuine partners in building something that would endure.
He did something that is so difficult for many founders to do …
He created space for his children to be … themselves.
That is a key part of building a legacy: recognising that you need to make space for your children to be more than just “your children”.
They tend to rise to whatever ceiling you put on them.
Jay Hughes said it well: “founders create wealth, but heirs create legacy”.
In this engaging podcast episode, David Werdiger shares insights from his personal journey and professional work guiding families through the complexities of intergenerational wealth. Drawing from his experience as a second-generation family business member and a trusted advisor, David unpacks the deeper dynamics behind one of the largest wealth transfers in history.
He reflects on his family’s immigrant roots, the evolution of their textile business into property investment, and why real estate often becomes a natural home for entrepreneurial families. From the challenges of power transition and sibling dynamics to the emotional ties founders have with their businesses, David explores how family governance, communication, and values shape successful legacy planning.
With increasing lifespans and multiple generations active at once, David discusses how wills alone are no longer enough—families must embrace charters, governance structures, and intentional dialogue to navigate legacy and preserve unity.
Ultimately, David redefines success not just in financial terms, but through joy, meaningful connection, and helping other families thrive.
David Werdige joins Finance Friends Podcast this week for a conversation that dives deep into family, business, and legacy.
From his early days in the family business to becoming a trusted advisor for ultra high net worth families, David brings a unique perspective on what it really takes to build something that lasts.
It can be hard for rising gens to have the space to pursue their passions.
What if their family has zero appreciation for what their passion even is?
Oscar award winning movie CODA (2021) is the beautiful story of high school student and talented singer Ruby whose parents and brothers are deaf.
Her music teacher encourages her to sing, while her parents struggle to make ends meet in their fishing business. As the only hearing member of the family, she is needed on the boat and to interpret for the family.
Ruby’s internal conflict is core: do what’s best for her family or pursue her dreams?
After a setback where it becomes clear that she cannot do both, Ruby decides to forgo music school and join the family business full time. This ignites friction with her brother Leo, who tells her not to give up on her dreams.
The turning point comes when the family attend her choir recital.
The film shines in portraying how Ruby’s family gain an appreciation for her singing talents, and Ruby reciprocates. The scenes are brilliantly done.
You can guess how it ends; this isn’t a thriller with plot twists.
If you haven’t already seen it, please do.
The title CODA – children of deaf adults – refers to hearing children who are born to deaf parents. These children often experience communication, social, and cultural challenges because of the unique difference between the deaf and hearing worlds.
This is a helpful metaphor for family enterprises.
Sometimes, parents and children seem to live in different worlds.
That is not a signal that something is wrong with your family.
It’s just the way each are wired: physically, emotionally or socially.
That was certainly my lived experience.
It culminated in an exchange with my father, weeks before he passed, which highlighted the huge bridge between how we viewed the world.
I view it as a special moment – one of acceptance for me that acknowledged our differences.
The film demonstrates how efforts from both generations can bridge the gaps between them.
Ruby knew her parents could never hear her sing.
Yet they each found a way to convey what it meant.
Understanding the perspective of someone with a very different lived experience is hard at the best of times.
The emotional bonds of family can make it even harder.
Tension can come from implied obligations to the family enterprise.
This is where external and independent advisors can help.
They can mediate between generations within a family to build a bridge.
Help them develop a common language despite their differences.
Conversation Starters:
Does if feel like your parents/children are “deaf” to your needs and talents?
How does this manifest?
What have you done to bridge things between generations?
PS Watch the movie as a family then talk about it.
“Shirtsleeves to shirtsleeves in three generations” is the oft-quoted adage. It’s been called a curse.
The adage exists in many other cultures: instead of shirtsleeves, it’s clog or rice paddies.
It stands as a warning to families: you make it, your kids spend it, and your grandchildren lose it.
But recently, the research that purports to prove this has been debunked.
Advisors are adopting a more positive view of family wealth and what it can achieve both for families and society.
It’s time to go one step further and turn the curse into a blessing.
To do that, we first must understand this “curse”:
The third generation of wealth carries risks.
– They grew up with plenty, while their grandparents grew up with little.
– They may not understand the journey of wealth creation.
– They have a very different psychology of money to the wealth originators.
Because of this, they may lack resilience and may not have as good an understanding of risk and reward.
An opulent lifestyle and poor decision making can the road to ruin.
How can families flip this narrative?
By three generations working together to compound their respective strengths.
The pattern works like this:
First generation takes a certain approach
Second generation wants to do it differently – “their way”
Third generation looks at both and finds a middle path
My late father was a micromanager. My response to that was to over-delegate. My children learn from both of us to strike the right balance.
What is the difference between “shirtsleeves …” and the compounding formula?
In the compounding formula, parents:
> Allow their children the space to experiment and learn
> Give their children autonomy and choice
> Let their children individuate
> Communicate openly
> Convey the lessons of their experience in a non-judgmental way
> Tell stories – warts and all – to convey their values
> Remain humble, recognising they too can learn
> Allow the third gen to learn from the two previous gens
> Encourage a culture of stewardship (not ownership)
Of course, it takes two (in this case three) to tango. The rising generation need to maintain a healthy respect for the past, and reciprocate the good will shown to them.
The incumbent generation need to take the lead on this.
Done well, the third generation will understand the journey of wealth creation their grandparents took, learn from their parents who challenged the status quo, and together design a sustainable future for the family.
Every curse has a corresponding blessing.
While it can take three generations to lose it, three generations working together can build a foundation that is enduring.
Conversation Starters:
How do you deal with children who want to “do things their way”?
David Werdiger has been recognized as a 2023-24 Schulze Publication Award winner in the Applied and Practice category for his article, Keeping the Founder’s Entrepreneurial Spirit Alive in Future Generations. This prestigious award highlights exceptional thought leadership in family business and entrepreneurship.
The article explores how family businesses can preserve the founder’s vision and values while adapting to evolving market challenges. By striking a balance between tradition and innovation, families can ensure long-term business success across generations.
“Energy can neither be created nor destroyed; rather, it can only be transformed or transferred from one form to another,” states the first law of thermodynamics. You may wonder what this has to do with family capital. After all, family capital is something that is regularly created and destroyed.
What they do have in common is the idea of transforming — changing family capital from one form to another.
Jay Hughes popularized the concept of five forms of family capital:
Human capital: The physical and emotional well-being of family members.
Intellectual capital: The knowledge held by the family system, individually and collectively.
Social capital: The relationships within the family and with their communities and the ability of family members to work together toward shared goals.
Spiritual capital: The shared purpose or vision of the family — its “North Star.”
Financial capital: The financial assets of the family
This broader understanding of family capital can help families of significant wealth (a) recognize that it’s not all about the money and (b) develop a plan for the family to thrive by placing suitable focus on the nonfinancial capital.
The relationship between the quantitative and qualitative forms of family capital is important. This is where the idea of transformation of family capital — inspired by thermodynamics — can be useful.
Here are a few basic examples:
Instead of thinking about spending money on the health of family members, what we are actually doing is transforming financial capital into human capital.
If the family pays for someone’s university degree, financial capital is being transformed into intellectual capital.
Family philanthropy transforms financial capital into social capital.
Money spent toward implementing the family’s shared goals is a transformation of financial capital into spiritual capital.
Unlike energy, which is neither created nor destroyed, family capital — both quantitative and qualitative — can grow. While investment activity is the primary focus of many family offices, it’s important to put it in context. Growing the family’s financial capital should not be viewed as a goal in and of itself but, rather, a way to provide fuel for current and future generations and thus perpetuate the cycle of transformation into qualitative forms of family capital.
While traditionally, the term “investing” is applied to financial capital, with the broader view of multiple forms of family capital, we can apply the term both within each form of capital and between them. Educating family members doesn’t just increase intellectual capital, but that additional knowledge within the family system can be used to generate new ideas for growing further and for growing other forms of family capital. Instead of thinking about education as “spending” or “depleting” financial capital, it is actually a form of “investing.”
Family vacations — often a big-ticket item — are one of the best ways to grow social capital: to build strong bonds between family members through positive shared experiences, and for the family to work together planning the vacation and activities. That ability to work together on a shared goal readily translates to other contexts: sitting together on committees or boards that may have an operating business or philanthropy focus.
While financial capital is quantitative and the other forms of capital are qualitative, families can develop and use a “family balance sheet” that measures all of them as a broad-based “health check” of the family, like the concept of a balanced scorecard.
What’s the point of financial capital being massively in surplus when family members are not living their best lives (a human capital deficit) or when family members are in conflict (a social capital deficit)? Is there any amount of money that can balance out poor health? A bitter family dispute? After all, what’s the money for?
By taking a holistic view of family capital and reframing spending as transforming financial capital into forms of nonfinancial capital, the family can invest to make itself thrive.
His topic is bound to be provocative: Attention Rising Gen – It’s Not All About You! Why The Principal Should Never Retire. In his entertaining and contrarian style, David will challenge the current focus on the ‘rising generation’, and the idea of ‘retirement’.
This will foster a better understanding the journey of the incumbent principal (whether in operating business or family office) to today and beyond 15-20 years.
Prestel & Partner’s Family Office Forum is a two-day conference exclusively for leaders in Family Offices, Family Members, and a select few sectoral experts, to connect and converse, in complete privacy. It provides a forum to exchange experiences and know-how on best practice in government and investments.
When we think of wealth transfer, it’s commonly from parents to children.
But what about “horizontal” wealth transfers?
The “Great Wealth Transfer” is about the Baby Boomer generation retiring and passing their wealth to their children.
A “vertical” transfer goes down generational lines.
A “horizontal” transfer goes across generations.
These typically occur in divorce, or after death to the surviving spouse.
In most of these scenarios, the recipients are women – divorcees or widows.
They differ from vertical transfers in several ways:
Divorce is often laden with conflict and other agendas, some of which can endure way after settlement
Losing a spouse can be far more difficult than losing a parent – bereaved children usually return to their own families, while the bereaved spouse is left alone
Wives are too often at a knowledge disadvantage in respect of family wealth
They may need to build new relationships with advisors
Vertical transfers – done well – can be smooth and orderly.
The family can invest time and resources into planning.
There can be overlap as control passes from one generation to the next.
Horizontal transfers often feature a discontinuity.
Much of what used to be may not be relevant or helpful.
They may need a reset or a restart.
It took three acrimonious years for Jane’s* divorce to settle. She got the house, cash consideration for her share in the business, and a listed equities portfolio. The kids were 19 and 13, the younger one living with her.
She was emotionally spent. After settlement, she treated herself to a week at a health spa. But she couldn’t relax.
She had more money than she would ever need.
There was a trust established for the kids so they would also be looked after financially.
But a part of her was petrified as she had no idea what to do next.
Horizontal transfers can leave the recipient of wealth in a vulnerable position.
What does the next stage of life look like?
Who is looking out for them?
Whom can they trust?
For Jane, it started with building a trusted team – a group who worked together with her (and each other) with a clear North Star: “what is best for Jane”. With that team, she articulated her goals and consciously designed the next stage of her life.
There was no urgency or time pressure.
With time, Jane found her groove and is living a life of her own creation. She sleeps well at night because she has the support infrastructure in place for herself and her children.
Dealing with a horizontal wealth transition has unique challenges and involves a lot more than the more common intergenerational wealth transition.
Things usually proceed at “the speed of trust” so building a trusted team to look after you is an essential first step.
Ensuring that your team understands the nuances and sensitivities of your situation is key to delivering a successful outcome.
* Name and some details have been changed
Conversation Starters:
To what extent can/should you prepare for family “discontinuities”?
If a horizontal wealth transfer is coming up, what will you need to stop, start and continue doing?
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