When meeting with prospects and clients in recent years, you’ve likely seen something that’s hard to miss: traditional families — heterosexual married couples with children — are a distinct minority.
You wouldn’t be alone in taking note. New industry stats validate the observation.
According to a UBS Investor Watch, “Beyond the Picket Fence: Financial Challenges of the Modern American Family,” such traditional families make up just over a third (35 percent) of all households.
Now almost as numerous are so-called “modern families.” Pegged at 34 percent of all households by UBS, the grouping includes same-sex couples and blended families with children from a prior marriage. Add to this contemporary mix multigenerational families (aging parents or adult children living at home) and older, first-time parents.
A third-tier (31 percent) of the non-traditional type includes households without children: heterosexual couples and singles.
What does this all mean for you as an advisor? If your clients’ views dovetail with the perceptions that such modern families have about advisors, then you need to up your game.
More than 7 in 10 (71 percent) of investors polled by UBS believe that financial guidance and solutions are tailored to traditional families. Support system on which modern families depend to achieve their financial aims — Social Security, health care and retirement benefits — have not caught up with their needs.
Like having more money in the till, more than 4 in 10 of parents in blended families say they’ve underestimated the cost of raising children from multiple marriages. Many of these parents also never anticipated the emotional toll child-rearing would have on their lives.
“Two-thirds of parents with children from former marriages feel frustrated that they cannot raise their spouse’s children the same way they raise their own,” the survey notes. “Sixty-three percent say their spouse’s children don’t accept them.”
Their frustrations don’t end there. When asked how complicated their lives are on the basis of four criteria — their lives overall, finances, retirement planning and filing taxes — solid majorities of parents in blended families describe each of the four as at least “somewhat complicated.”
And as the stats below show, the percentages of respondents who describe each of the criteria as at least “somewhat complicated” is higher among blended families with children at home than among their traditional counterparts.
My life overall: 55 percent (blended families) vs. 45 percent (traditional families)
Finances: 55 percent vs. 44 percent
Retirement planning: 64 percent vs. 54 percent
Filing taxes 53 percent vs. 46 percent
Financial issues extend to other domains for families living off the beaten path. To learn more, see the charts beginning on the next page for additional highlights from the UBS survey.
As this chart shows, higher percentages of blended families with children than traditional families are dealing with knotty inheritance planning issues. Most glaringly, two thirds of blended families (67 percent) are uncertain how to pass on their wealth.