Updated on: August 25, 2021

Talking about money is difficult no matter who’s participating in the conversation, but it can be especially challenging when family is involved. Financial professionals should encourage clients to share their financial lives with their children and other impacted family members, despite any difficulty surrounding these conversations. The benefits of talking about money far outweigh the discomfort and potential consequences of not talking about it.

The nature of the information, and when it should be shared, depends on the age of the clients, as well as their children, but the earlier in their lives it starts, the easier those conversations will be as all parties grow older and the financial implications become more complex.

Earlier Is Better

The advantages children see from talking about money at an early age are two-fold. It teaches them the routine basics of handling money while also setting them up to better understand more complex monetary instruments and decisions as they get older. Early topics could include budgeting, debt, and other more elementary financial literacy topics and money values.

Introducing the concept of long-term financial planning to your clients’ children should supplement these conversations about money. Young children don’t need to know the intricate details of your client’s financial plan—but understanding that there is a plan and that their parents have goals sets the stage for more in-depth conversations as they age.

Evolving to the Teen Years

As kids get older, help your client increase the sophistication of the financial conversations. When teenagers get their first job and open their own bank accounts, it’s important they continue to manage their money as they’ve been taught. Make your clients aware of tools and technology that teach kids how to effectively manage their own accounts and goals.

Invite your clients to include their older children in annual plan reviews. If the client’s plan includes saving for college or other goals related to their future, loop the child in on the discussion. Seeing the effort the parent is making will help the child appreciate and understand how to make the most of the funds allocated for higher education and other aspirations.

Staying in Touch with Adult Children

There will come a point when a client’s children will be out on their own, perhaps with their own families. Work with your client to devise a plan to provide periodic updates that continue to include them in the conversation.

They may be busy with families of their own and engrossed in the day-to-day aspects of their own lives, but keeping them in the know about their parents’ finances will help to lead naturally into the more difficult end-of-life conversations that will eventually happen.

And when it’s time to focus on those more difficult conversations, financial professionals can help their clients by providing a meeting plan to follow to ensure they cover all the subjects they want to discuss.

Provide Guidance for Family Financial Meetings

As clients age and begin to think about wealth transfer and end-of-life decisions, a new element of difficulty enters the discussion. No one wants to think about a time when parents die, but there are real consequences for lack of preparation. Not only could it cause stress and make extra work for families, but an incomplete plan could also result in the courts controlling how assets are divided.

Lend your expertise as a financial professional to help your clients plan a family meeting or offer to facilitate one for them. Giving such a meeting structure ensures all necessary topics will be covered and increases its chances for success.

The planning and execution flow could look something like this:

• Set a date so it is on everyone’s calendars. Have the meeting as its own event and not when the family is already gathering for a holiday or other celebration. While having a process will make the conversation easier, the discussion will still include difficult topics that could mar a previously planned occasion.
• Share the purpose of the meeting and ask everyone to think about it ahead of time and bring questions. Reassure them that questions are welcome, and discussion is encouraged.
• Devise an agenda that covers the specific topics to be discussed. Start with an update on the client’s plan. For a thorough meeting, topics should also include other end-of-life subjects that have a bearing on that plan. Review any associated documents such as will and/or trust documentation, financial power of attorney appointment, beneficiary and transfer on death designations for financial accounts and property, living will, and healthcare directives or proxy.
• Designate the specific roles the client would like family members to take on. There should be an announcement of who is appointed as an executor or trustee, who will hold financial power of attorney, and who will act as a healthcare surrogate or agent.
• A final step that should not be overlooked is for the client to ask for a commitment from those present to ensure their wishes are carried out.

There’s no guarantee that a meeting like this won’t be difficult, but careful planning can help set expectations, eliminate surprises, and decrease the potential for disagreements that can cause anxiety during a time of grief.

What’s Good for Clients Is Good for Business

If referrals are one of your practice’s chief means of building business, this holistic approach to helping your clients take care of their families has definite benefits. Over the next few decades, a great deal of money is set to change hands. The Boston College Center for Wealth and Philanthropy estimates that $59 trillion will transfer from 93.5 million estates between 2007 and 2061.¹

Your clients will want to prepare their families to receive and preserve this wealth and you will want to make sure you continue to manage those assets. Taking the time to develop a relationship with your clients’ children makes it more likely you will have the opportunity.

DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.

The views and opinions expressed by this blog post guest are solely those of the guest and do not necessarily reflect the opinions of eMoney Advisor, LLC. eMoney Advisor is not responsible for the content, views or opinions presented by our guest, nor may eMoney Advisor be held liable for any actions taken by you based on the content, views or opinions of the guest.

Sources:

¹ Boston College Center for Wealth and Philanthropy. “New Report Predicts U.S. Wealth Transfer of $59 Trillion, With $6.3 Trillion in Charitable Bequests, from 2007–2061,” Page 1, https://www.bc.edu/content/dam/files/research_sites/cwp/pdf/Wealth%20Press%20Release%205.28-9.pdf

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