Parents need to discuss family finances with their adult children, or risk seeing their nest eggs shrink, MFS Investment Management said.
The Boston-based money management firm based this conclusion after analyzing results from its MFS Investing Sentiment Insights survey.
“Money should not be a taboo topic between parents and their adult children,” William Finnegan, senior managing director of global retail marketing for MFS, said in a statement. “Both need to understand the entire family financial picture, regardless of how awkward it may be to discuss. This goes beyond knowing if mom or dad has a will. 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.”
One survey finding: 75% of parents say their children have never met their financial advisor.
MFS said it sponsored the online survey, which was conducted in mid April. Survey respondents included 1,033 individual US investors with $100,000 or more in household investable assets and 588 licensed US financial advisors who have been licensed for at least three years with $500,000 or more in annual mutual fund sales.
Finnegan added: “Financial advisors 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. Financial advisors also need to explore new ways to talk with clients about family matters, and especially to include adult children in the process.”