I recently worked with Protective Life and the Holderness Family Podcast to explore how members of the sandwich generation – those in their thirties and forties who are raising children and taking care of their parents – can manage debt and build personal savings while trying to plan for college and retirement at the same time. As a financial advisor for the better part of 30 years, I appreciated their interest in tackling these issues head-on for their listeners.
We live in a world where it can be pretty easy for our clients to avoid aspects of their lives that make them uncomfortable. But the reality is there isn’t a filter for their real life finances. Worrying about money can keep your clients awake at night. Paying down debt, planning for retirement, saving for college, caring for aging parents – these are just a few of the financial realities our clients face that we probably won’t see them talking about on social media.
I wanted to share my take on some of the bigger topics the Holderness family and I talked about during our time together. My hope is that by reading this, you will find some meaningful reminders for helping your clients build a plan for their finances, especially if they are reluctant to tackle some of these bigger issues.
Here are my top five reminders for working with clients who are trying to do it all.
5 reminders for helping sandwich generation clients
1. Avoidance of a plan is not a plan.
Your clients have already taken a crucial first step by working with an advisor. But it’s important to remind your clients that while, for example, they may be addressing personal savings goals, they shouldn’t be avoiding retirement planning or other financial responsibilities just because it makes them uncomfortable. Help them create a plan by encouraging them to keep score of their expenses, changing spending habits and setting priorities.2. Your client can’t do everything at once.
A big question some clients have is whether they should pay off debt or save for college and retirement. It’s easy for clients to get overwhelmed when they think about all their financial responsibilities. It’s our job to help them prioritize. Let your clients know that it’s not necessary to do everything at once and it certainly won’t be accomplished overnight. Work with them to prioritize what they are going to do first.3. There are no scholarships for retirement.
As advisors, we know one of the biggest financial burdens clients have is adequately funding their retirement years. However, many parents get so focused on figuring out how to send their children to college they make decisions that could harm their retirement plans. While there are many variables that go into your personal plan, my experience has been that there is not just one way that people pay for their kids’ college education. It is usually some combination of savings, grants, scholarships, financial aid and student loans. It worries me when I hear of people planning to borrow from the equity of their home. Or worse, when people borrow from their retirement accounts to pay for their child’s tuition. I completely get the desire of a parent to provide their child with a college education, but I get really concerned when I hear about people not prioritizing their retirement needs and sacrificing their personal assets to do so. Clients should know that there are scholarships for college, but there are no scholarships for retirement.
The Department of Education and many states offer resources for helping your client navigate the numerous college funding options:
- collegescorecard.ed.gov – This site includes links to organizations and agencies on the state level that can provide assistance with grants, scholarships and financial aid.
- Free Application for Federal Student Aid – The FAFSA application is one of the first steps parents and students should take when planning for funding.
4. Life happens and clients may get blown off course.
Events that occur in our lives, in the world, in our country and in the economy will influence your client’s plans. I like to use the example in a course I teach of an airplane and a pilot. If I board a commercial jet in Raleigh, NC and my destination is Los Angeles, CA, there is a good chance the pilot is going to adjust the airplane’s course along the way. The course adjustment might be due to turbulence, weather or other factors, but by the pilot making the adjustments I am confident that I will get to my destination. Your client’s plans for retirement or other financial goals are no different. They may get blown off course and have to adjust their path, but if you help them monitor and review their course, they can have a higher degree of confidence that, with your help, they will get to their destination.5. Sandwich generation clients have a lot on their plates.
People are having kids later in life, and their parents are living longer. This means more people are taking care of their kids and their parents at the same time.
I experienced this with my parents, and I draw from this experience when advising clients in similar situations. I think one of the more challenging things for clients facing the declining health and independence of their parents is knowing when they should step in and where to start. My two sisters and I went through this process with my aging parents a few years ago when my father passed away after a brief illness. Having his information organized made a difference in my sisters and I being able to navigate my mother through what seemed like an endless and confusing process that must be completed after the death of a spouse.
Two things we were not prepared for and had not adequately anticipated: 1) scams that proliferate upon an elderly parent’s death; and 2) the importance of having a secure system for passwords.
When working with clients who are managing the care of aging parents, remind them that it’s also important to consult a qualified attorney or elder law attorney to make sure their parents’ wills are up to date, power of attorney has been established and healthcare directives completed.
While the topics mentioned above can make clients uncomfortable, I think many people have the same questions even if they are scared to talk about them. That’s why our role as advisors is so important. A financial advisor can serve as a coach for clients, cheering them on and giving them that swift kick in the pants we all periodically need. A coach teaches, a coach helps guide clients toward their financial objectives and, most importantly, a coach holds clients accountable.
About Greg Patterson
Greg is a “player coach” who works with financial advisors, CPAs, attorneys and their clients in various areas of financial planning including retirement, wealth management, estate planning and business continuation. His firm, Advisors Financial Group, uses the tagline – Purposefully Serving Advisors and Their Clients to describe the financial planning work they do in conjunction with other advisors.
Greg has earned several professional designations, is a Certified Financial Planner™ and is licensed in over 40 states. He is a continuing education instructor and conducts classes for insurance agents and financial advisors across the country. He is active in the community serving on nonprofit boards and enjoys traveling with his wife and friends.
This material is for informational use only and does not constitute advice or the solicitation of any product or service.
Greg Patterson offers Advisory Services through Investment Advisors, a division of ProEquities, Inc., a Registered Investment Advisor. Securities offered through ProEquities, Inc. a Registered Broker/Dealer and Member FINRA/SIPC.
Advisors Financial Group, Inc. is independent of ProEquities, Inc.
Representatives may only conduct business with residents of the states for which they are properly registered.
ProEquities is a wholly owned subsidiary of Protective Life Corporation.
