Banks can help customers end ‘money talk’ taboo

There’s quite a bit of evidence that talking about money in families is taboo. The reasons vary from feelings of embarrassment and insecurity, to fears of creating family conflict, to simply thinking money talk is “gauche.”

Regardless of the root cause, the result is money silence. In a recent study conducted on behalf of Wells Fargo in late 2022, we found that most adult children with a parent 70 or older have not had a conversation with their parents about their current need for money or their future finances. What’s more interesting is that it’s not necessarily the topic of death that’s holding people back: roughly 40% of people would rather talk to their parents about their funeral plans than their financial plans. One in four would rather deal with their parents’ finances after they die than discuss it while they’re living.

These are problematic numbers given that Gen Xers and millennials are heading toward what’s anticipated to be the greatest wealth transfer in history. According to a 2022 report from Cerulli Associates, $84 trillion will move from boomers to their families over the next couple of decades. Not talking about money could create unintended consequences ranging from boomers running out of money to transferring wealth to unintended beneficiaries.

So what can banks and investment firms do to help?

Help customers identify and track their money goals: Creating forums, events or review meetings where customers can come together with financial professionals and share their personally meaningful goals when it comes money can open the door to money talk. It can help customers reframe their approach and examine the consequences of not talking about money, rather than exclusively focusing on the drawbacks of talking about it.

When customers share their goals, it highlights financial building blocks that may be missing such as a trusted contact for the financial professional (should something happen to the customer), account ownership, up-to-date beneficiary designations and more. This opens the door to highlighting whether or not the customer can achieve their goals and what plans are in place should something happen to them.

This can be particularly effective for younger adults who, according to the Wells Fargo study, were most likely to be the ones to expect to manage their parents’ finances. Goals-based discussions – typically with millennials – often open the door to contingency planning conversations: If something were to happen to me, will my children be OK? This can create the “aha” moment that it is never too early to talk about money in families, and motivate them to speak to their parents in the context of their planning.

Ask questions that highlight the need for money talk: Families sometimes struggle to talk about money because they lack a “playbook.” Providing ways for adult children to approach and ask their parents about money, while minimizing the changes of negative family dynamics and disruption, can help.

Here are three questions for our younger customers to use to collaboratively open the door to a money dialogue with their parents:

• What do you want to accomplish with your money? This will help you understand your parents’ intentions.
• Do you feel like you have enough? Now your parents have an opportunity to share their true feelings.
• How can I help you achieve this? Show you’re a partner in helping your parents stay in control of their finances for as long as possible.

Serve up bite-sized content about money via mobile: There are a number of modern ways to inspire money conversations in families. One emerging as a popular method is non-product-based digital content in the forms of podcasts, videos and blogs. Keeping the content short and focused on answering critical questions related to money taboos, can give people the “just-in-time” insights that they need.

While not all millennials may be digital natives, their children certainly are. A number of firms have created a digital ecosystem for parents and kids to financially collaborate around saving, spending, borrowing, investing and giving.

There are a number of other methods to normalize money talk. Ultimately, banks can inspire these conversations in families that will help them make the most of their money now and in the future – across multiple generations.

Michael Liersch is head of advice and planning for Wells Fargo Wealth & Investment Management.