Furthermore, as many planners are discovering, new-money clients may not even be interested in old-money services. Kathy Longo, principal of Accredited Investors Inc. in Edina, Minn., works with a wide variety of clients and says that the service needs for old-money clients and for new-money clients are very different. "Before you start offering bill-paying services, be sure you know your clients because new-money clients won't be interested or willing to turn their checkbooks over to you."

"Know your clients," resonated as a common chorus among planners interviewed by Financial Advisor. However, just defining the difference between old-money and new-money clients proved to be challenging. What exactly is old money?

Chris Dardaman Jr., partner with Polstra & Dardaman LLC in Atlanta, works with high-net-worth families, mostly first-generation wealth, but some second. "In our firm we tend to think in terms of first generation and second generation rather than old money and new money," he explains. "After all, second-generation wealth might still feel that the money is new money to them. First-generation people tend to be more conservative, Millionaire Next Door types. They tend to live below their means (e.g. Sam Walton driving a 20-year-old pickup) and to be philanthropic. Second-generation wealth doesn't have the same work ethic or philanthropy ethic. However, I tend to distrust such generalizations because sometimes these traits are reversed."

For Longo, old wealth does not begin until the third generation. "The second generation is not as influenced by wealth (in the sense of entitlement) as the third because they still have the advantage of witnessing the hard work of the creator generation. They still equate value creation with hard work." It's only in the third generation that the cause-and-effect relationship between work and money really disappears, she finds.

Unlike Dardaman and Longo, Myra Salzer works exclusively with inheritors. While her clients extend into several generations of inherited wealth, many clients of her firm, Wealth Conservancy Inc. in Boulder, Colo., are second- and third-generation wealth, or G2 and G3 in the shorthand of old-money advisors. Like Longo, she finds that G2 and G3 wealth is very different. "In my experience, the second generation does not grow up wealthy in the traditional sense. Their fathers are busy creating the wealth, and G2 pays the price of love and attention for this money." Since wealth creators (G1) are frequently disinterested in wealth management, G2 clients have no one to teach them about managing money. They generally learn on their own and provide the third and fourth generations with a model to follow.

However, the primary difference between old and new wealth is the client's relationship to money, not his or her generation level. As Salzer reflects, "No matter what generation of inheritors I'm dealing with, my clients don't have a cause-and-effect relationship with their wealth. They don't have the benefit of having received this money as a result of something they have done. Their ownership with it is very different than a wealth creator's."

Wagner expands on this point. "If you're the son or daughter of somebody with whatever it takes to make a ton of money, I can't think of any offspring less likely to resemble their parents than these kids," he explains. "They may have the same genetic structure, but they simply don't have the hunger of the first generation."

Wagner adds that old wealth is essentially a family, not an individual, phenomenon. "If you're trained by your family to expect money as part of your life, then you're probably in the category of old money," he says.

IFF Advisor's Dr. Lee Hausner elaborates in his work about the nuances of old- and new-wealth's relationship to their money. A psychologist for the Beverly Hills Unified School District for 19 years, Hausner has established an international reputation for her work with families on wealth and philanthropic issues.

She distinguishes between two very different types of old wealth-active and passive. The active category refers to inheritors leading a productive and purposeful existence. Though not necessarily wealth producers, they are high achievers. Some of Hausner's more active clients are entrepreneurs, while others are philanthropists. Salzer notes that old wealth has allowed two of her clients, Olympic athletes, to focus 100% of their energy on their sport. On the other hand, Hausner recognizes a class of passive old wealth or trust-fund babies. These folks are the idle rich who never quite manage to answer the question, "What do I do when I wake up today?"