The financial consequences of important life events such as marriage and the birth of children have baby boomers worried about their offspring’s ability to afford expenses connected to these milestones, suggest the recent results of an ongoing consumer survey.

The importance of these events for Canadians increases more than once in a life cycle and for distinct demographic groups, according to the most recent edition of The Financial Comfort Zone Study, conducted by Mississauga, Ont.-based Credo Consulting Inc. in partnership with Montreal-based TC Media’s investment group. (Investment Executive is published by TC Media’s investment group.)

“Weddings” and “child care” are events that increase in importance for Canadians between the ages of 50 and 60. Weddings also rate high in importance for Canadians between 20 and 30, while child care is most important in the mid-20s to late 30s.

“We thought that [finding] was interesting because it suggests that if importance is rising at a second point in life, these kind of life events are important more than once,” says Brandon Bertelsen, research director at Credo.

Rising living costs and a volatile job market are likely to lead to many boomer parents’ concerns about their children’s finances. Some financial advisors, including Mark Coutts of Coutts Financial Services Inc. in Toronto, which operates under Waterloo, Ont.-based Sun Life Financial (Canada) Inc.‘s banner, are seeing that concern unfold in their offices. Coutts’ clients will ask him if they can afford to help pay for their children’s weddings, homes and grandchildren’s education.

“[Parents’ financial support of their children] has come full circle. You get these baby boomers that say, ‘Mark, I thought I was past all of this,'” says Coutts.

Clients in this situation require advisors who can provide flexibility within a client’s financial plan while also being the voice of reason that helps those clients stay on track with their own goals.

“These discussions could lead to some important relationship-building when thinking about cash flow,” says Bertelsen.

The first step is to understand your clients’ motivation for potentially sacrificing their own financial security in order to protect their children. Your role is to run the numbers and find a workable solution that does not jeopardize your client’s long-term prospects.

“Our job is to help steer the client back onto the track of a reasonable compromise between wanting to be supportive of a family member, but also understanding the logical math that [being supportive] may not be possible to do 100%,” says Coutts.

Helping your clients understand the limit to assisting their kids financially is likely to have a positive impact on the financial outlook for both your clients and their children. Coutts recently had to explain the value of this compromise to a 70-year-old client who wanted to fund both a down payment of her daughter’s home and a granddaughter’s education.

“There was a chance that [my client] would run out of money, depending on how long she lives,” he says, “and then the whole problem comes full circle because she then could become a financial burden on her daughter – the same one the client is trying to help.”

If you keep a watchful eye on the future of that next generation, that could solidify your relationship with your client and provide an opening to build rapport with that client’s children, says Sara Gilbert, founder of Strategist Business Development in Montreal: “[This strategy] is an extraordinary opportunity to open the door to meet the next generation of investors because they’re the ones who will inherit the money.”

Your clients’ financial plans can benefit if those clients think about their potential obligations before they suddenly become a reality. Coutts’ clients undergo an exercise that gets them thinking about the potential financial responsibilities they will have to their spouses, children and parents in 10 and 20 years.

For example, a client with a teenager may have a more immediate concern about funding that child’s post-secondary education; but thinking about that child in 10 years will have the client wondering if some additional savings should be built for a possible wedding or home purchase.

“[The exercise] does remind everyone that we constantly need to be looking as holistically as we can at the big picture and also looking up and down the family tree,” says Coutts.

The importance of “credit card usage” also ranks highly at two distinct points in life, according to the study. The first spike in importance comes courtesy of Canadians in their early 20s; an upward trend also is seen for Canadians in their mid-50s, then peaks for those in their mid-60s. This situation also may be related to expenses connected to their children. Coutts sometimes sees clients using credit to help fund one-time events such as a child’s wedding.

The study surveyed more than 8,000 Canadians. The ongoing online survey is meant to gain insight into the relationships among financial advice, financial well-being and overall life satisfaction in Canadian society. Canadians are polled monthly, and the number of survey participants will grow to 12,000 within 12 months.

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