To my surprise, in a recent get-together gathering with my peers, more than half of them are no longer actively working, the reasons being either due to their own health issues or providing care for their elder parents. Coincidentally, all of them are female financial professionals, except one male colleague (who was absent) is looking after his elder mother. I was perplexed by their sharing on the issues of parental aging and it has prompted me to write about this topic, though not a topic for the faint of heart.

Elder care-every family must face it or suffer the dire consequences of not planning for the future, especially the women who tend to be the caregivers for their aging parents, like what had happened to my peers. Unfortunately, according to Eldercare Resources in the US, there are 3 major hurdles that stand in the way of this elder care conversation that our aging parents hold onto:

1. “I am not losing control.”

2. “I am not sharing my private business with anyone.”

3. “I am not going to be a burden on my children.”

This stubborn belief of not being a burden sometimes causes the greatest burdens to their adult children. One popular money script is,” I need to leave an inheritance to my children.” Yet choices that our parents make based on this belief can result in both failing to leave an inheritance and even costing children more money and stress.

Financial professionals have a unique role to play in alleviating the stresses that aging parents placed on their adult children, our clients, who are also termed as “sandwich generation” provide support for their aging parents as well as their growing children. Some called these caregivers a three-headed financial monster of funding:

1. Eldercare for parents

2. Retirement for themselves

3. Education funding for their children

Thus, the danger is not that the parents are spending their children’s inheritance, but rather their children’s retirement funds that we might be managing!

How well do you really know your clients who are approaching or in retirement?

Where will you live as you grow older?

What do you like to do at home?

What are your health concerns and legacy plans?

What’s your game plan should you need long-term care or assisted living?

How will you pay for health and long-term care costs?

Are you concerned about the financial security of their children or grandchildren?

These conversations entail probing areas that your clients and their parents may find uncomfortable. Yet the answers are so critical to their financial health and overall well-being.

Financial professionals of 30 years ago approached eldercare primarily through a single lens – investment planning.  After FPAM was formed in 1999, a subset of financial professionals broaden their perspective by adding a second lens – financial planning. Today’s financial planners can offer advisory services that transcend traditional investment planning and holistic financial planning, which include planning around life goals, fulfillment, health, family, community, and even legacy planning for generations which includes eldercare planning and beyond.

So when do we start the conversation with aging parents?

The Home Instead network uses the concept of The 40/70 Rule- you should start the conversation with your aging parent by the time you reach age 40 and a loved one is around age 70. Starting the conversation early before a crisis occurs could help avoid family tensions and problems.

For financial professionals, you can integrate the conversation during the initial client engagement questionnaire and in annual client reviews, always ask your client,

-”are you now, or do you anticipate, caring for an aging parent in the future?”

-“do you feel a moral or financial responsibility to any senior members of your family including aunts, uncles, and grandparents, and where are they living now?”

– “are they dependent on you, either financially or as a primary caregiver or both?”

– “what kind of life do you want as you age?”

– “how will you prepare for unexpected medical emergencies?”

Dan Taylor who created the Parent Care Solution offers a more structured conversation that includes:

1. The big picture conversation (parental fears, concerns, hopes, and dreams)

2. The money conversation (the overall financial picture)

3. The property conversation (tangible properties and possessions)

4. The house conversation (the decision to stay at home or move)

5. The professional care conversation (smaller home, assisted living, nursing home)

6. The legacy conversation (gifts to family and bequests to charity)

In fact, Dan Taylor believes that financial planners are going to be the key facilitators in the aging process. You may be worried that you don’t know enough about eldercare issues. You just need to be the conduit to help or a sounding board to initiate and facilitate the conversations with their kids and help your clients with eldercare issues. You aren’t supposed to be the expert, and as a fiduciary, you have to draw the line when you know you can’t help or are not in the best position to help. Instead, you can provide guidance and the right contacts for the clients and their family members to a network of care specialists and experts when they need it. Any client and family member would appreciate you providing such guidance and this is essential to building and sustaining the client-advisor relationship.

What if you, as a financial professional overlook eldercare planning?

You failed in achieving your missions and visions as a trusted financial professional, losing clients to more forward-thinking peers, and then you are going to lose the next generation when they get advice from someone else, which might not be in their best interests.

In fact, from the findings in the studies conducted by MIT Agelab, the real value proposition now for a new generation of pre-retirees and recent retirees is longevity (or eldercare) planning.

Would you agree?

Have you had any aging conversations with your clients before?