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Do Your Adult Children Need a Financial Advisor?

Picture of Randall E. White

Randall E. White


If you’re among the many people who wish they had begun taking financial planning seriously a bit earlier in life, you’re definitely not alone. It’s a common refrain we hear from clients and, while you can’t go back in time, you can encourage your adult children to avoid the mistakes you made.

Now, if your children are in their 20s, or are older but not earning much yet, there’s probably not much need for a financial advisor. However, life changes and careers evolve, and there will come a time when professional financial advice is both appropriate and needed. Below, we’ll discuss four triggering scenarios in your adult children’s lives that may make it the right time to seek out the services of a financial advisor in order to create a proper plan for the years ahead.

Scenario 1: Their Compensation Becomes Complex

If you instilled personal finance habits in your kids from a young age, there’s a good chance they have become adults who manage their money well and have excellent budgeting, saving, and spending habits. However, if the way they are paid begins to take on more complexity, they might benefit from more expert planning. For instance, if they have started their own business, become a partner in a growing company, or taken a position with an equity component to their compensation, it’s important that they seek professional help. There are many nuances to wealth building and tax planning, and it just makes sense to have a trusted advisor in their corner to ensure all opportunities are being maximized. For example, when it comes to equity compensation, there are different forms that carry different tax implications. Utilizing a financial advisor is the best way for your adult son or daughter to navigate a compensation plan that is new to them. A professional can make sure they make tax-efficient decisions, while also optimizing cash flow and savings potential.


Scenario 2: Their Salaries Balloon

If you ever found yourself in the position of suddenly earning a much larger salary, you know it’s very easy to fall into the “earn more, spend more” trap. This is usually referred to as lifestyle creep, and it’s an easy way for spending to get out of control and reach levels that will be unsustainable. Now, it’s not necessary to save or invest every extra dollar your adult child earns with their next salary bump, but it’s important that saving increases, too – not just spending.

It’s important to note that, as salaries increase, so does the complexity of tax returns. Your son or daughter might need assistance making certain they don’t miss tax-saving opportunities or with big-picture planning like knowing which types of retirement accounts to prioritize.

Scenario 3: They Start (Or Grow) Their Family

It’s safe to say that, while a new baby is exciting, a family’s financial picture almost always gets more complicated, too. So, whether your adult children are having their first babies or adding more little ones, it’s a great time to seek out professional financial advice. For some families, income may temporarily decrease, or maybe even move from a two-income household to one income. Meanwhile, expenses will certainly rise. Not only do things like diapers, baby formula, and childcare strain a budget, but there are also future costs to anticipate, such as saving for college. Additionally, a financial advisor can make recommendations about appropriate insurance and estate documents to keep your son or daughter’s family protected in the event of an unexpected injury or death.


Scenario 4: A Forthcoming Inheritance

If you’ve planned ahead to provide a financial legacy for your children, it is always helpful to ensure they have an ongoing relationship with a trusted financial advisor. Here’s why: any existing money issues your adult children have will not be cured by an inheritance. In fact, more money sometimes exacerbates things like existing money management problems or feelings of being overwhelmed or confused with regard to money. Of course, you’ve probably heard about the huge percentage of lottery winners who squander their windfalls in a very short time too. The fact is, suddenly having a large sum of money requires preparation. A financial advisor can help ensure your adult children are on firm financial footing and have solid money management habits before they inherit your legacy. You want to give your kids rocket fuel to achieve their financial and life goals – not gasoline to fuel an ongoing financial fire.

Final Thoughts

Having a financial advisor isn’t for everyone in every stage of life, but the above scenarios are good signals that it may be time for your adult children to find a professional they can trust. Not only is it helpful to have a financial advisor in your corner for these specific instances, but there’s a peace of mind that comes with knowing you’ve built a relationship with an expert you can go to whenever questions or concerns arise, or when life transitions impact finances.

As your children consider their options, encourage them to do their research and find a financial advisor they feel comfortable with – preferably, a fiduciary. There are so many benefits that come from a thoughtful, long-term financial plan built alongside a professional who has their unique goals and interests in mind. In this way, helping your adult children find a financial advisor that they like – and trust – can be one of the most impactful legacies you leave them.

At TriCapital Wealth Management, we help our clients plan for a confident financial future. If you or your adult children are interested in working alongside our team confidentially to build wealth for life, please reach out to us today.

Securities offered through Triad Advisors, LLC, member FINRA/SPIC. Advisory services offered through TriCapital Wealth Management, Inc. TriCapital Wealth Management, Inc. is not affiliated with Triad Advisors, LLC.

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