To Truly Help Participants, Consider Their Family Situation

Advisers who inquire about family obligations assert that they provide more comprehensive service.

When retirement plan advisers talk about their primary concerns for clients, it usually revolves around deferral rates and retirement income projections. However, there are a handful of advisers who use their one-on-one advice sessions as an opportunity to gain insight into participants’ family obligations and goals—and they claim the approach enables them to provide a more complete financial picture.

“My view of financial planning has always been holistic,” says Billy Lanter, fiduciary investment adviser at United Trust Company in Lexington, Kentucky. “It’s a little bit harder with retirement plans because the number of participants who seek out advice is not as high as it is in the high-net-worth space, but anytime I have a one-on-one conversation with a participant, I bring up their spouse, their kids and their parents, and how their needs relate to them and impact their goals.”

Joe Duran, chief executive officer of United Capital in Newport Beach, California, agrees, saying that he believes that taking a person’s family into consideration “is an imperative. Most individuals’ financial plan will fail because of unintended liabilities that they were not aware of—their parents not having health insurance and getting sick, the distant cousin expecting them to pay for their college education, or the child who decides to go to graduate school. All of these responsibilities have a massive impact on a person’s financial life.”

When Sandra Goodstein, managing director and senior financial adviser with Wescott Financial Advisory Group in Philadelphia, begins working with clients, she asks them what impact other family members will have on their finances.

NEXT: What, exactly, to discuss

When incorporating familial obligations into the financial discussion, the most common strategies include talking about a person’s spouse and their children, advisers say. To help married couples or partners discuss their financial goals, United Capital has developed an online tool,, that asks each individual about their life ambitions, rather than their short-term goals, Duran says.

“This enables us to develop a methodology to understand what people want their money to do for them,” he says. “Each couple talks about themselves, and then they collectively agree on what they want to do as a couple.”

BKD Wealth Advisors of Chicago believes it is imperative to include both spouses in any financial discussion, says Steve Martin, a director with the firm. “By having both spouses participate in the financial discussions, when one spouse passes away, we have a relationship with the other spouse, they already trust us, and they don’t have to start running at 100 miles per hour from a dead stop,” Martin says.

The next most common goal, where families are concerned, is parents teaching their children about financial responsibilities. Canon Hickman, wealth manager at Equity Concepts in Richmond, Virginia, encourages his clients to tell their children about “their goals as a family and allow them to participate in your success. By allowing them into your day-to-day goals for saving, it teaches them the practical matters of how money works.”

For example, if the family is planning a vacation, the parents can explain to their children how they are going to budget for that by limiting dinners out, says Karen McIntyre, managing director and senior financial adviser with Wescott Financial Advisory Group. “The most successful families I have seen are those that bring the children into financial discussions,” McIntyre says.

Lanter has found that “charitable giving is a good way to open the door to other conversations about money.” One exercise United Trust Company suggests for parents is to ask their children to research charities, select one and then present a case in front of whole family as to why they believe it is a good cause, he says. This teaches children several useful skills, including the value of money, and makes it easier for parents to talk to their children about financial responsibility, he says.

NEXT: Caring for parents

Any financial adviser, including a retirement plan adviser, who delves into family finances would be remiss if they did not cover issues concerning aging parents, according to advisers. Estate planning and long-term care are very emotional and sensitive subjects, and most parents do not want their children to know everything about their finances, Lanter says.

He tells his clients to “gently open the door to these subjects” by asking their parents who their financial planner is, who their lawyer is, who their physician is—before asking about their will and final wishes. “This is a less intrusive way to get the foot into the door of an uncomfortable conversation,” he says. “The key is starting early before there is an issue.”

A tactic that Goodstein suggests to her clients is to “blame the difficult conversations on us. Tell your parents we suggest asking the hard questions to protect them from the dangers of the unknown. Tell them, ‘We don’t need to know the details about your finances, but we do need to ask such questions as, do you have long-term care insurance? Do you have debt?’”

McIntyre adds: “‘What are your preferences if something happens to you?’ We provide them with the template so they can feel more comfortable about having these conversations, and then we suggest a family meeting.”

Hickman says these are among the most important questions an adviser can help their clients ask: “Talking about death is one of the most difficult parts of our jobs but actually one of the most important. We need to discuss every financial hurdle our clients will have, and people feel more comfortable when the questions are systematic.” So, for example, an adviser can explain to his or her client that these are the practical questions they ask when they turn age 55, 60 or 65, he suggests.

In sum, considering a person’s complete financial life, including aspects that hinge on family members, can empower an adviser to “provide deeper relationships,” Martin says. “A great deal of the work that we do is enhanced by how well we understand a client and their situation, and knowing about their family and family dynamics can help guide our advice.”