Families Need to Discuss Financial Matters More

June 6, 2013 (PLANSPONSOR.com) – Families that avoid discussions about financial matters are putting their retirement savings at risk, said a new survey.

Families would rather discuss health, religion or politics than money, according to the “Investing Sentiment Insights” survey from MFS Investment Management. By avoiding these financial discussions, not only are families are putting their savings at risk, they also make it difficult for their adult children to properly plan for their own long-term financial goals.

“Money should not be a taboo topic between parents and their adult children. Both need to understand the entire family financial picture, regardless of how awkward it may be to discuss,” said William Finnegan, senior managing director of Global Retail Marketing for MFS.

Finnegan explained that there are serious consequences to ignoring these issues that can severely impact families’ long-term financial standing. “These issues can cut across nearly every aspect of life, including personal happiness, financial security, real estate, personal health, education, even the next generation’s financial footing.”

Some key findings from the survey include:


  • Seventy-five percent of parents say their children have never met their financial adviser. Only 4% say their children have had in-depth planning sessions with the parents’ financial adviser;
  • Fifty-four percent of investors say they are not interested in having a family wealth planning discussion with a financial adviser. Only 14% say they are;
  • Of those who have discussed family financial matters with a financial adviser, 94% have found the discussion to be at least somewhat helpful, while 65% have found it very or extremely helpful; and
  • A majority of Generation X (56%) and Generation Y (75%) investors expect to rely on an inheritance, at least somewhat, when they retire, but less than half of Baby Boomers agree that it is important for them to leave an inheritance.

“Financial advisers have the tools and resources to help families understand the bigger family wealth picture. The challenge for families is to recognize that they need to have these conversations and to proactively engage a financial professional for help,” added Finnegan. “Financial advisers also need to explore new ways to talk with clients about family matters, and especially to include adult children in the process.”

Research Collaborative, an independent research firm, conducted the online survey for MFS from April 8 to 18, 2013. Respondents were 1,033 individual U.S. investors with $100,000 or more in household investable (non-retirement) assets and 588 licensed U.S. financial advisers (either FINRA or SEC) who have been licensed for at least three years with $500,000 or more in annual mutual fund sales. All investor respondents make or share in making financial decisions for their households.

The Generation Y investors were defined as those under the age of 33, and 194 participated in the survey. Generation X-ers were defined as investors between 33 and 47, and 269 participated. Baby Boomers were defined as investors between 48 and 66, and 323 participated. There were also 247 survey participants over age 67.