Money can be one of the most taboo topics of conversation. For your clients, financial issues may be highly personal, fraught with emotion, and associated with conflict. Well-meaning parents may be reluctant to discuss financial information with their children for a variety of reasons. Some feel the information is private. Others don’t want to worry or overwhelm their children. Some parents want their children to forge their own paths independently, without the distraction of outside sources.
Unfortunately, these strategies can backfire. Children who do not understand family finances may try to fill in the blanks themselves, not always accurately. Without guidance, they may never learn the skills and information needed for financial literacy. And if parents don’t talk with children about finances, their families may not understand their parents’ values and wishes, which may put you, as a financial advisor, in the awkward position of refereeing disputes and misunderstandings.
Although it may be difficult for families to talk about initially, financial conversations can help families create a shared set of values around finances and develop a mutually satisfactory financial plan. But how can clients get started? It’s important to remember that it’s never too late to start a conversation.
How to Help Clients Start a Financial Conversation
1) One Bite at a Time
As financial advisors know all too well, managing finances can be complicated. When your clients begin conversations with their families, it’s important to introduce these topics gradually, especially for family members who may become overwhelmed with details because of their age or lack of familiarity with the topic. Conversations that center around the family’s values and goals and how money helps the family achieve them can be a great starting point.
2) Decide the Most Important Topics in Advance
You can guide your clients to help them decide what’s most important for their family members to know. Examples could include financial priorities (such as education and health care), how to access accounts, assets and liabilities, where to find titles for property and assets, intellectual property, businesses owned, insurance information, emergency planning, charitable contributions, and important documents such as wills and power of attorney, and more.
3) Put It On the Calendar
Once your clients know the topics to address with their family members, they should set a time for these discussions to take place. Depending on your client’s family situation, these discussions may occur weekly, monthly, or annually, in person or via video conference. If your clients do not feel equipped to host these discussions themselves, you can offer to attend.
4) Center Conversations Around Values and Goals
When you encourage your clients to share their values, you can help them preserve their legacy. It’s important for clients to explain the reasons behind financial decisions they’ve made so their children are prepared to live by sound financial principles and values-based decisions, even if circumstances and details change.
5) Encourage Clients to Allow All Family Members to Participate
Financial discussions can become contentious when communication breakdowns occur, especially when some family members don’t share the same opinions. Although they may lead to uncomfortable feelings, financial discussions are much easier for families to handle when things are going smoothly than in emotionally charged situations, such as the death of a loved one or a financial emergency. Financial discussions should avoid judgment, keep communication lines open, and include all family members so everyone feels heard or valued.
6) Keep the Conversation Going
Although financial conversations may start formally, they can continue in informal settings. When parents are willing to discuss financial information with their children, it can open the door for children to ask questions as they decide their own financial paths. Even for young children, clients can find age-appropriate ways to teach children financial literacy and financial values.
7) Provide Resources for Financial Discussions
Whether or not your clients discuss finances with their families already, you can provide information and resources to help these conversations become more informative, memorable, and even fun! By developing materials for your clients’ family financial conversations, you can help your clients save time, remember important details for discussion, and keep discussions on track. These resources could include:
- Budgeting games
- Budget binders
- Spreadsheets
- Slideshows
- Videos
- Interactive applications
- Checklists
- Templates
With careful planning, you can help your clients share financial information and values with other family members. Although some clients may struggle to openly discuss financial issues with family members, that’s not a reason to avoid the topic. Clarity is vital to ensuring your clients’ financial plans come to fruition.
One challenge for your clients as they share financial information with family members is knowing how to organize their information for easy retrieval, distribution, and interpretation. With Docupace’s version control, your clients’ documents can become clearly organized and easily accessible, reducing duplication and errors and making it easier to share information with multiple family members. Interested in Docupace’s document management software? Click here to learn how Docupace’s document management software can help you facilitate a well-organized financial strategy for your clients and their families.
