Rene Ann Pochop, a financial planner in South Burlington, Vt., talks about money all day in the office. But that doesn't mean she wasn't surprised when she started hearing financial questions at home from her 17-year-old daughter.

"'Do you have money set aside for college? How much do you have? I don't want to go in debt,'" Pochop recalls her daughter saying. "I can't believe she is saying these things," adds Pochop, whose namesake firm has about $17million under management. "Maybe she just got that attitude about money by osmosis."

It's quite common for clients to ask questions about children and money. And like Pochop, many planners must wrestle with those same questions in their own families.

Those experiences often influence the advice they dispense to clients - but what's perhaps more surprising is that advisors say their clients' experiences have also influenced their conversations with their own offspring. "I have not shared much with my children about what we have," says Pochop, attributing her reticence to her children's ages. (She also has a 15-year-old son.)

Although she has clients who pay 100% of their children's higher education expenses, Pochop says she has told her daughter that she may have to help pay for college. The planner has also proposed her daughter start working in the practice as a paid intern to help save for that.

Pochop says many of her clients are skittish about doing so with their own kids, but says the clients do better when they overcome those apprehensions. And she says she does plan to share much more with her daughter and son about the family's money eventually - probably by their mid-20s.

Pochop's services are so hands on that, if necessary, she negotiates with car dealers for her clients - and she offers similar assistance when they express fears about a child's financial acumen, proposing that she counsel the heirs herself. At those sessions, Pochop covers the basics of asset management: "I explain the importance of a Roth IRA and other things."

She says she has helped with that transition for four or five clients and that generally the children have responded responsibly.



Alex Stowe, a financial planner in Plano, Texas, whose firm has about $50 million in assets under management, says his own family's circumstances have shaped the advice he offers clients about money and children significantly.

"My father-in-law had a pretty nice-sized estate and three daughters, but he did not like to talk to them about money and he did not trust any of his sons-in-law," Stowe says. His wife, who controls the trusts her parents established, also prefers not to discuss all the details with their children, all in their 20s.

"She's like her dad; she doesn't like to talk about money," Stowe says.

Yet he tells clients to not follow his example and instead to share full information about family assets with adult children. He sets up a more systematic approach to get his clients' grown children responsible for and aware of their potential inheritance.

Because his clients rarely display the reluctance his wife's family has about sharing money secrets, they typically send their adult children to Stowe for advice about money management. He also helps the clients establish trusts, if their assets merit such a plan, and helps them select who will control it and how they can structure its documentation so their heirs abide by their wishes but have enough control to respond to future events effectively.

With all that experience, why does he fall short at home? It's the same reason a "cobbler's children go without shoes," Stowe admits. "I'm just not that proactive with them." Despite his best intentions, he says, he finds himself hamstrung by his wife's restrictions and his own preoccupations; as a result, he only counsels his children about finances on an ad hoc or as-needed basis - at tax time, for example.



Sometimes a client must be encouraged to show their grown children a little tough love, advisors say. If clients of Seattle advisor Candy J. Lee insist on giving money to a child when Lee has counseled against it - because, for instance, the clients possess an insufficient financial cushion for their own future - Lee sets a stipulation for continuing her advisory relationship. The clients must write Lee a letter for her files stating that they chose to deplete assets even though Lee advised against it.

"It hurts me too much to see them do what they do," says Lee, whose firm has $280 million in AUM. Those letters have not stopped some clients from forging ahead with the unadvisable gifting, although some of those same clients have stayed with her.

But even Lee - who has no children - thinks parents who insist on maintaining a lifelong blackout about their finances risk triggering financial turmoil and deep-seated anger. One of her clients grew up thinking her parents were poor; when she learned after their deaths of their significant wealth, the client's anger overwhelmed her. Even though she inherited their estate, Lee says, "She didn't want to touch the money."



Charles Aulino, director of financial planning at Glenmede Investment Management in Philadelphia, which has $22 billion in assets under management, says: "We have a strong belief that the maximum amount of intergenerational planning is recommended and we often ask parents and children to participate together."

That's the theory, anyway. Yet in reality, Aulino concedes, "We get lots of pushback and we have to respect that." Clients persistently express concerns that "if the children learn too much too soon, they are likely to get unmotivated," Aulino says.

To persuade clients to share information with their children, Aulino says, he uses his own family as a model, arguing that "families that can get comfortable with full disclosure seem to have much better outcomes."

Aulino talked with both of his grown children, a son and daughter, about money as they reached their 20s. His son faced a bit of learning curve, he says: For a while, "it was like, 'Should I buy one Corvette or two, dad?'" But since then his son has become a good steward, starting a business and saving for rainy days. He says his daughter, who earned a Harvard doctorate in medical anthropology, required no coaching.

Aulino encourages clients to send a clear message to their children: Wealth should be enjoyed, but also preserved for future generations. And such a message must be delivered not just with words but also with the parents' own handling of assets. He says he finds it sadly easy to predict which clients' children will repeatedly fail the financial steward test.

"If you believe you have to have three houses and a Bentley," says Aulino, your children will get the impression they shouldn't deprive themselves of worldly possessions, either. "If that's been the client's lifestyle, it's much harder for us to help with the kids."



When should a parent start disclosing wealth and dispensing advanced money lessons? "It's when the parent has an inkling that the child is starting to appreciate that there is a lot of responsibility that comes with money," Aulino says.

What are indications such stirrings have taken place? "They are showing the beginnings of foresight about ... the need to be concerned with resources," Aulino says. Sometimes, he notes, children learn from painful experiences - so he doesn't argue when clients propose "giving very young children a certain amount of money and seeing how they handle it."

It's fine to start early, says Evelyn Zohlen, founder of Inspired Financial in Huntington Beach, Calif., with $90million in AUM and 90 families as clients. "Every time is a good time," she says, adding, "literally, an endless series of opportunities exist." Even a 6-year-old asking for a candy bar can get a tutorial about finite resources, she says.

With her own three stepchildren, whom she first met when the youngest was 18, Zohlen once worried that "the train had left the station on financial education." But she instead has found that she still may impart important ideas to them.

One tricky area, however, was college costs. As a result, she has advised clients with children as young as 8 to 10 to start talking about higher education choices and expenses. Even children in grade school can understand that better grades, athletic development, or both, might lead to reduced costs for better quality schools, she says.

And her stepchildren finally saw the light when it came to choosing grad schools. On that front, she says, they "have made decisions regarding where they were going in part based on how they were going to pay."


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Miriam Rozen, a Financial Planning contributing writer, is a staff reporter at Texas Lawyer in Dallas.

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