Bringing Your Children Up to Date
More and more, our clients are asking if they can bring one of or all of their children to a portfolio review so that we can meet. One of the great things about having such loyal clients (HMC Partners is fortunate to have 96% retention within our client ranks) is we get to move through life’s cycles with them. One of those cycles is the transference of wealth to the next generation. In fact, $12 trillion of wealth will be transferred to the next generation by 2020 nationally with another $29 trillion by 2063. (1) If you haven’t yet, we advise, regardless of your health or that of your spouse, you begin to involve your children in all aspects of your financial situation. We recommend that you make your children aware of things like:
- • Life Insurance
- • Long Term Care Insurance
- • Wills, Trust, Healthcare Power of Attorney documents
- • Where all investment, checking, money market, savings accounts are held (Perhaps a notebook with all contact information)
- • Mortgage and other creditor information
There are plenty of more things to think about. Please go to our website http://hmc-partners.com/new/hmcpartners/content.asp?contentid=2017631759 and order our “Emergency Brochure” to make sure you’ve thought of everything.
Your children meeting your advisor allows them the ability to gain comfort with the firm that has been looking after your money during your retirement years. They can gain understanding of your needs, objectives, the strategies, and results. If your children are inexperienced investors, they can start to gain understanding of investments and have some confidence when it’s their time to take over. They will have formed an impression of him/her and be able to decide whether they feel that advisor meshes with their personality. If you become infirmed, they will know the advisor and be abreast of what your needs are and what strategies are in place. If your children are experienced investors, then having another set of eyes on your investments is always good especially as you age. An experienced investor should be able to always know if your portfolio is meeting your risk objectives while taking into consideration other needs like income or preservation.
If you are not comfortable yet with your children being this close to things this personal, please ask us at HMC Partners to allow you bring them to one of the many events we have for our clients. They can meet us and get a feel for our firm and staff. If your current advisors don’t do these types of events, perhaps you can ask your children to come to a review and then leave before the meeting gets into the review portion. Sometimes, just putting a name and face together is a good start. Maybe once that initial contact is made, you will begin to feel a bit more relaxed about your children’s involvement.
Regardless, think about involving your children at some point with your advisory team. It can go a long way to educating all parties and building trust prior to the day those assets change hands. When that time comes, your children will be overwhelmed with grief and decisions. Having the portfolio decisions already made will relieve undue stress in an area that can provide some of the most anxiety.
The opinions in this commentary express the views of the author and in no way represents the views of LPL Financial. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
(1) Source: - http://www.cof.org/files/Documents/Family_Foundations/Generational-Succession/Intergenerational-Transfer-of-Wealth.pdf