How FAs Can Best Serve Grandparents, Parents And Children

By Myra Thomas When it comes to financial matters, Americans are juggling a lot of issues. They’re attempting to save for their retirements, dealing with debt, paying bills and keeping a close eye on the markets in volatile times. getty And then there are the people issues, which complicate things […]

By Myra Thomas

When it comes to financial matters, Americans are juggling a lot of issues. They’re attempting to save for their retirements, dealing with debt, paying bills and keeping a close eye on the markets in volatile times.

And then there are the people issues, which complicate things even more. For those who make the financial decisions in families, balancing the needs and sometimes the expenses of children and aging parents can pose a burden. (According to data from the Pew Research Center, more than one in 10 parents in the United States are caring for an adult.[1])

For women, the challenges of this role can be particularly daunting, given lingering gender-based social roles. 

“The majority of caregiver responsibilities still fall to women,” points out Janet Koh, director of practice management at New York Life Investments.

The Women In Between

Women who belong to the “sandwich generation”—situated between their children on one side and their parents on the other—might find their time and finances divided. According to the AARP, 32% of adults between the ages of 40 and 64 provided regular financial support to their parents in the past 12 months. Forty-two percent of them “expect to be doing so in the future.[2]

Fully half of middle-aged adults, meanwhile, are “still providing money to their adult children age 25 or older … for basic expenses.” The impact of the Covid-19 pandemic on the economy could strengthen this dynamic, worsening the financial difficulties of adult children who may be unable to find work even as they’re still on the hook for student loans. 

The result is that many women are feeling financial pinches from various different directions. And to make ends meet, they’re skimping on their retirement savings.

Who Comes First?

How can a financial advisor best guide a female client in such a situation? 

It’s important to make it clear that her savings, retirement and estate planning goals must take precedence over the current needs of her family members.

That may be just as difficult for women to say as it is for family members to hear. But as Koh puts it, women have to “pay themselves first.” FAs can remind clients of the flip side of the issue: that they won’t be financial burdens to their children down the line if they plan, save and invest well now. 

The truth is that keeping your children free of heavy responsibilities can be one of the best gifts you can give them.

Conversations With Older Parents

Of course, the financial needs of aging parents can dash the best-laid plans of their adult children. Events—sudden sickness, financial crisis—can sneak up on us. 

So advise your female clients to have those difficult money conversations with their parents before it’s too late, Koh advises. 

“We are living longer, and the costs of healthcare, senior care and assisted living are an issue,” she says. “Those are things that your female clients need to be aware of.” 

And, it hardly needs saying, to plan for.

Setting ground rules for such a sensitive discussion prevents it from veering off the rails. Here’s one ground rule: Agree beforehand on trigger points to avoid. 

Here’s another: Make things official by getting the parents’ financial details down in writing. This is one type of family meeting where it makes sense to have a record.

You’ll also want to tell the client to make it clear that the conversation really isn’t about the impending deaths of their aging parents. 

“You have to frame it by saying the conversation is really about avoiding problems down the road,” Koh says.

She recommends telling aging parents that sharing their financial information ensures that their wishes can be carried out. 

If your female client has siblings, make sure she brings them onboard here. If they’re not actually parties to the conversation, they at least should know what’s going on.

Educating The Next Generation

The financial mistakes of one generation needn’t pass on to another. A little at-home education in money matters goes a long way.

At-home financial lessons for a child as young as 5 or 7 might come in the form of “playing store.” Giving young children an allowance in exchange for chores is another great way to teach money-related lessons. So is playing Monopoly or slipping kids money from the tooth fairy. Gamifying money issues is a sure winner in general.

Tweens are ready to learn about the value of money and how to earn it, as well as about the virtue of saving. Now is the time to teach old truths like “Money doesn’t grow on trees” and “You can’t have everything you want.” 

And teens should be encouraged to get jobs, to earn for the future and to cover larger expenses, such as those that a car brings. This is also the time to discuss debit cards, student loans and credit cards, as well as who will pay for college. Basically, it’s time to cover the big topics: wealth accumulation, budgeting and debt.

Education Into Adulthood

A child’s financial education shouldn’t stop after the teen years. After college, it’s time to learn how to budget, prioritize expenses, invest and appropriately handle a “real” paycheck. The parent can also pass on advice about retirement contributions at work, as well as about building credit and savings. 

Simply put, female clients shouldn’t leave to chance the project of guaranteeing generational wealth—and FAs should make sure they don’t. By helping female clients prioritize their own financial goals and pass on financial literacy to their offspring, FAs can do their best by clients who are coping with complicated money-related challenges.




This material is provided for education purposes only and should not be construed as investment advice or an offer to sell or the solicitation of offers to buy any security.  Any references to performance is not indicative of results you may obtain from any specific securities. Opinions expressed herein are current opinions as of the date appearing in this material only. You should obtain advice specific to your circumstances from your own legal, accounting and tax advisors, as applicable.

“New York Life Investments” is both a service mark, and the common trade name, of certain investment advisors affiliated with New York Life Insurance Company. 

The MainStay Funds® are managed by New York Life Investment Management LLC and distributed by NYLIFE Distributors LLC, 30 Hudson Street, Jersey City, NJ 07302, a wholly owned subsidiary of New York Life Insurance Company. IndexIQ® is an indirect wholly owned subsidiary of New York Life Investment Management Holdings LLC and serves as the advisor to the IndexIQ ETFs. ALPS Distributors, Inc. (ALPS) is the principal underwriter of the ETFs. NYLIFE Distributors LLC is a distributor of the ETFs. NYLIFE Distributors LLC is located at 30 Hudson Street, Jersey City, NJ 07302. ALPS Distributors, Inc. is not affiliated with NYLIFE Distributors LLC. NYLIFE Distributors LLC is a Member FINRA/SIPC.

For more information about MainStay Funds®, call 800-624-6782 for a prospectus or summary prospectus. For more information about IndexIQ ETFs®, call 888-474-7725 for a prospectus or summary prospectus. Investors are asked to consider the investment objectives, risks, and charges and expenses of the investment carefully before investing. The prospectus or summary prospectus contains this and other information about the investment company. Please read the prospectus or summary prospectus carefully before investing.

At New York Life Investments, we don’t just offer investment advice, we invest in lasting client relationships. New York Life Investments is comprised of the affiliated global asset management businesses of our parent company, New York Life Insurance Company. We’re a global asset manager with a focus on long-term thinking and a diverse multi-boutique structure that you access through MainStay Funds and IndexIQ ETFs. We strive to deliver meaningful outcomes for the investment needs of our clients, and we work hard to deliver value beyond just investment performance. New York Life Investments: More than Investing. Invested.

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