One of the things we love is to be a resource for our clients on many different topics that encompass their financial lives. Whether it is discussing complex economic ideas and the potential impacts on portfolios, building personalized financial plans, or sharing the names and contact information for home remodel/repair businesses we have had good experiences with, we truly enjoy having the opportunity to share our knowledge and experience with our clients.
A topic in particular that can be difficult to discuss is around providing financial assistance to adult children. According to a study done by The William Group, a consulting firm specializing in the assistance of generational wealth transfer, 70% of transferred/inherited family wealth is gone by the second generation, and 90% by the third. Sometimes, part of this problem is created by spendthrift children who squander their inheritance on frivolous or harmful things. In our experience however, more often than not younger generations just simply do not have any sort of financial cushion set aside for life's expenses and emergencies and are often going to parents or grandparents and asking for "an advance" on their inheritance, before their parent or grandparent actually leaves them any money.
It is often a fine line between helping children who are in need, versus enabling. Most of the time, parents and grandparents' gift to their children and grandchildren because they care more about the children's financial future than they do their own. The problem is excess gifting can actually end up hurting the children in the long run if their parents run out of money and the child ends up having to house and care for an impoverished parent.
A potential solution we see to this problem is beginning to have conversations now with adult children on the benefits of good financial habits so that they are not dependent on their parent's financial resources. At Impel Wealth Management, our next-generation financial planning service Simplifynance, is geared towards helping create these good habits, and provide accountability to stick with them. Providing financial planning and advice for the next generation so that they have the ability and independence to pursue their own financial goals, without having to rely on their parents or grandparents financially, is one of my personal goals as a Certified Financial Planner® and is why I am so passionate about what Simplifynance has to offer. We hope to continue to be a valuable resource for this generation and the next, as we help all of our friends and clients "Move Life Forward."