Family Matters: When Adult Children Lean On Your Clients For Financial Support

Advisors Share How To Counsel Clients Who May Risk Their Own Retirement To Be Financial ‘Heroes’ For Their Adult Children’s Needs

Whether through the fault of the adult child or unforeseen circumstances, parents often must cope not only with funding their own retirement, but also supporting the financial needs of their adult children. Often the parents do not realize the risk they create for their own retirement by providing this support, and even if they do the parent-child relationship complicates the matter.

In its communications with affiliated advisors, Dynasty Financial Partners has seen this theme recurring across different practices recently. We reached out to three Dynasty affiliates to ask their views on how advisors can help clients navigate these issues: Christine Wang, Lead Advisor at Nilsine Partners; Derek Wittjohann, COO and Partner at Premier Path Wealth Partners; and Michael Leverty, Founder and CEO of Leverty Financial Group.

Each of them addresses the issue from a different angle. Our questions and their responses follow.

WSR: How do you guide clients through the needs of adult children who can’t afford to pay the associated costs for significant life events such as weddings and divorces?

Christine Wang, Lead Advisor, Nilsine Partners
Christine Wang, Lead Advisor, Nilsine Partners

Wang: Guiding clients and their families through supporting adult children involves a balanced approach, focusing on empathy, financial planning and boundaries. We typically begin by encouraging open communication between the parents and their adult children to understand each other’s needs and expectations.

It’s crucial to assess the parents’ financial situation to determine what they can afford without compromising their retirement savings or financial security – we do this by helping to create a budget or savings plan specifically for life events like weddings and divorces. We educate both parents and adult children on the importance of living within their means and exploring cost-effective alternatives that do not sacrifice the significance of the event. For instance, a smaller, more intimate wedding or mediation instead of litigation in divorce can significantly reduce costs.

Lastly, setting clear boundaries about financial support is essential. This includes deciding whether the support is a gift or a loan – and defining repayment terms. This approach not only helps in managing immediate financial needs, but also teaches adult children valuable lessons in financial responsibility and independence.

WSR: How do you counsel financial “hero” parents who provide sacrificially for their adult children, inadvertently causing the risk of their children failing to develop?

Derek Wittjohann, COO & Partner, Premier Path Wealth Partners
Derek Wittjohann, COO & Partner, Premier Path Wealth Partners

Wittjohann: Many clients, acting as the family “hero,” financially support their adult children, potentially jeopardizing their own retirement and the children’s development. This practice can instill poor financial habits and create unrealistic expectations if not accompanied by proper communication. Absent the appropriate context, these adult children will often calibrate their spending expectations to include ongoing support, not understanding that may not be the case.

Despite knowing the risks to the clients’ financial circumstances, they often avoid discussing financial realities with their children, aiming to maintain their heroic image. This avoidance sets up the next generation for a rude awakening when the financial support unexpectedly ceases.

We advise clients to initiate discussions with their children early, using family meetings as a platform. This conversation, prompted by various catalysts like a recent financial review or life event, should also reinforce the family’s values and expectations.

One impactful framing we’ve seen is the concept of “giving with a warm hand, rather than a cold.” These clients are comfortable spending down their assets during their lifetime, as it allows them to witness the enjoyment of those assets while they’re still here, rather than leaving a lump-sum at their passing. Another valid reason for providing situational financial support is as a bridge during a time when their children may need it the most, rather than having them wait until the parents’ passing.

These are all valid reasons but require the appropriate context and communication so that everyone’s expectations are properly managed. Despite best intentions, the news might be met with mixed reactions, necessitating guidance for the next generation. Including us in these discussions, both as a mediator and an ongoing resource, offers a neutral perspective and helps manage the conversation. By acting as a mediator, we facilitate a constructive dialogue, allowing families to address the situation collaboratively, thereby preserving intergenerational relationships.

WSR: How do you conduct the conversation with a client that’s delaying or risking retirement due to the needs or demands of adult children?

Michael Leverty, Found & CEO, Leverty Financial Group
Michael Leverty, Found & CEO, Leverty Financial Group

Leverty: As an advisor guiding clients through the transition from work to retirement, our discussions about supporting adult children during retirement are crucial. Many clients tend to underestimate the financial consequences of assisting their adult children during this phase. They often concentrate solely on their retirement lifestyle expenses, assuming the expenses related to their children are behind them.

When unexpected requests or needs arise from adult children, parents often feel emotionally compelled to offer ongoing support. In such instances, our role as advisors becomes pivotal. We aim to help clients understand and quantify the impact of this support on their original plan. Rather than imposing decisions on our clients, we strive to offer them a thorough comprehension of how such assistance affects their financial strategy. By quantifying the impact, we hope to prepare our clients with the knowledge and resources needed to navigate these difficult financial decisions.

James Miller, Contributing Editor and Research Analyst at Wealth Solutions Report, can be reached at

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