Goodbye Cleavers, hello modern family

New family structures mean new opportunities to serve unique needs

Sep 22, 2014 @ 12:01 am

By Liz Skinner

The famous TV family of the 1950s, the Cleavers, have faded into history, so it's time for advisers to find a way to help America's modern family.

Today, only 20% of Americans are part of a "traditional" family like the one portrayed in the show "Leave it to Beaver." A new survey suggests there's a large potential market for advisers who can create a profitable business model by offering financial help to single-parent households, multigenerational households, same-sex households, boomerang families, blended families and everything in between.

Three-quarters of modern families — defined as any dynamic other than a married couple with one or more children under age 21 living at home — are not working with a financial adviser, and 57% have never used a professional to help with financial matters, according to a survey of 4,500 Americans produced by Allianz SE. Participants, who completed an online survey in January, were between 35 and 65 years old and had at least $50,000 in household income.

These families are more likely than traditional families to need financial assistance, according to the study released Monday. About 73% said they experienced financial hardship such as bankruptcy, an unexpected loss of a main income source or the need to rely on short- or long-term disability. About 42% of traditional families reported such issues.

A third of the modern families who have never used a financial adviser said they would consider using one, while a quarter said they would not consider using one. On average, modern families have saved less for retirement, about $196,800, compared with traditional families that have saved an average of $251,100.

"Advisers have to understand their typical clients have dramatically changed over the past several decades," said John Carroll, Allianz Global Investors' head of U.S. retail.

DIFFERENT PLANNING ISSUES

Nontraditional families have different planning issues to address, such as the importance of education planning for single-parent families and estate planning for same-sex couples, Mr. Carroll said.

"The common thing we found across all these families is that they need someone to understand their particular needs and to suggest solutions to achieve them," he said. "It may be harder to serve these nontraditional families, but by helping with their special circumstances advisers can make deep and longstanding relationships."

Steve Stanganelli of Clear View Wealth Advisors has a number of these so-called modern families as clients, including those who've been through divorce or one spouse's death. In divorce situations, especially, college planning for the children often is given short shrift, he said.

One of his clients, an octogenarian, is taking care of two generations in her home. The woman recognizes she is taking on responsibilities that rightly should be her daughter's, "but she's not going to change anything at this time in her life," Mr. Stanganelli said.

Working with these clients requires "a lot of right-brain stuff," such as extra empathy for having to deal with certain family situations, he said.

"These clients are more interested in solutions to life's problems, not necessarily the best investment strategy," Mr. Stanganelli said.

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