Blended Families: The Modern Need for Modern Financial Advisors

Blended Families: The Modern Need for Modern Financial Advisors

The American College of Financial Services
June 20, 2016

So-called "modern families," which include blended, same-sex, and multigenerational households are "nearly as common as 'traditional' families with a heterosexual couple and children," according to a survey by UBS Wealth Management Americas. Unfortunately, many financial advisors are still providing advice as old and outdated as Beaver Cleaver. Despite common misconceptions, blended families span all income levels, with no disparity among affluent investors. A recent survey found 7 out of 10 affluent investors "felt that financial advice they encounter is designed with only the traditional family in mind." 

Blended families and how to help them with the ChFC® designation

Divorce and remarriage are a common element of the modern family, as are nontraditional dynamics like unmarried, single-parent and adoptive childrearing. New familial norms translate to tremendous opportunity for "modern advisors" who understand the challenges, complexities and needs of modern families, however not all advisors have adequate training to service the breadth of these new investment dynamics.

In an effort to become more educated and capable of advising modern families just as holistically as the ‘traditional” model, advisors are turning to comprehensive professional designations such as the Chartered Financial Consultant® (ChFC®) from The American College of Financial Services. A mondern, applications-based designation like the ChFC® provides advisors with information and skills necessary to solve critical issues for blended families. Prevalent topics covered by the ChFC® curriculum include estate planning as well as how to allocate a client's resources across family members, heirs, and involved parties who want or need them.  

The Need for Estate Planning

The unfortunate circumstance of fighting over things when someone passes away can become even more complicated in nontraditional or blended modern family structures. Add in the complexities created when a client has significant assets and matters can become even more escalated. Natural children, stepchildren, current or ex-spouses and other relations or stakeholders may fight over what has been left behind, a situation that can be especially tricky across nontraditional family dynamics.

As estate planning attorney Jeff Gottlieb told U.S. News & World Report, "estate planning for blended families can be a minefield," but it's a minefield you can help these families navigate. ChFC® professional education from The American College of Financial Services provides the latest research and methodology behind 21st-century estate planning, enabling you to alleviate confusion or conflict when someone passes away.

Allocation of Assets Among Family and Heirs

For clients with both natural children and stepchildren, financial issues may arise well before a client passes on. Consider paying for college. If a client chooses to pay all or part of his natural child’s tuition, how does he or she address doing (or not doing) the same for any involved stepchildren? In these situations, emotions often run high and can create mountains of familial turmoil that you must help navigate.  

Adding to emotional dynamics, factors like the cost of tuition add further stress and, if one member of the marriage views wealth and finances differently than the other, your challenges as an advisor are heightened. The best thing for such blended families, according to UBS Wealth Management Americas strategist Sameer Aurora, is to seek "the advice of a financial planner with extensive experience with these kinds of issues."

While such advice to the public is likely to drive investors toward qualified advisors, it also poses challenges for advisors who aren’t equipped to manage the financial needs of modern families. As the profession demands advisors with more sophisticated training to handle blended-family specific nuances, a designation like the ChFC® is a logical next step for learning the latest about property transfers and trusts, both crucial for helping blended families delicately balance finances.

Comprehensive financial planning designations like the ChFC® are proven to help financial advisors be more successful.