Most American parents and grandparents believe children today are less equipped to manage money than they were at the same age, despite the explosion of fintech tools, investment apps, and digital banking options available to younger generations.
New research from Wealth Enhancement found that 53 percent of parents and grandparents say today's kids are less ready to handle money, with the gap between availability of tools and actual financial preparedness becoming a core concern for wealth management professionals, who are increasingly fielding questions from clients about how to pass financial literacy and wealth to the next generation.
Sixty-one percent of grandparents say children are less money-ready today, compared with 46 percent of parents who hold that view. Millennial parents take the most optimistic stance with 40 percent believing that children today are actually better equipped than prior generations.
Chloé Briel, a CFP and Senior Advanced Planning Manager at Wealth Enhancement, points to the very convenience of modern financial tools as part of the problem.
"That convenience can make it more difficult to teach the value of money and healthy financial habits," Briel said.
Children can tap mobile apps to check balances, receive digital allowances, and even invest through custodial accounts with a few clicks, but abstraction from cash and physical transactions may be eroding the foundational understanding of money that earlier generations built through direct experience.
The survey identified a hierarchy of financial lessons that parents and grandparents find most difficult to pass on.
Avoiding impulse purchases and overspending topped the list, cited by 56 percent of respondents. Budgeting and everyday spending management came second at 52 percent, followed by understanding how money is earned and the value of work at 50 percent, and saving and delaying gratification at 49 percent.
More sophisticated concepts such as how money grows through interest and investing were cited by 34 percent as the hardest to convey, suggesting that families are struggling with even the basics well before reaching investment principles.
Despite widespread concerns about preparedness, a significant portion of American families have not yet opened investment accounts for their children.
Fifty-three percent of parents and grandparents surveyed said they had never done so. Among those who have, 22 percent opened accounts before the child's first birthday; a small but growing cohort who are acting on the power of compounding early.
The findings arrive as the wealth management industry increasingly recognizes that serving the next generation of investors is both a business imperative and a service differentiator. Clients who feel their advisor is helping prepare their children for financial independence are more likely to consolidate assets and maintain long-term relationships.
Practical starting points include scheduling family conversations about money as part of the annual review process, recommending age-appropriate account structures, and connecting clients with resources that make financial concepts concrete for younger audiences. Even modest early contributions to a custodial account can become a teachable moment if the child is brought into the process.
The Wealth Enhancement research also carries a broader message for the profession. As financial planning for families evolves beyond retirement to encompass education funding, estate planning, and intergenerational wealth transfer, advisors who address the financial literacy gap head-on will find receptive clients — and new conversations to have.
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