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Bringing Up (Your Client’s Brand-New) Baby

By Murray Coleman August 26, 2014

Summer is a busy time for births. If trends tracked by the U.S. government’s National Center for Health Statistics hold up, August will again prove to be the year’s peak month for arrivals. Early fall is also a traditionally hectic time for those new parents, which experts say is likely to cut into advisors’ client-facing time.

“Advisors need to respect a family’s personal boundaries, but at the same time find a way to responsibly perform the job they were hired to do,” says Lisa Colletti, an advisor in New York for Los Angeles-based Aspiriant, which manages $8 billion. But raising financial issues early in the baby-rearing process calls for tact, she adds.

A good sense of humor helps too. For example, Colletti will remind new parents of her role as a “diplomatic pest” whose job it is to nag them, gently, about financial matters they might lose sight of. So, even as she congratulates her proud-parent clients, she underlines her readiness to keep their financial lives on track. “They appreciate the gesture, and it also reinforces my role as a trusted advisor,” Colletti says.

Jonathan Blumenthal, a United Capital advisor in Dallas who had his third child in June, says FAs can draw on their own kid-rearing experiences to connect with new parents. That’s why, when meeting with such clients, he gets into tales of kids and family right off the bat. As a new father himself, he knows how the excitement of having a new family member can override thoughts of money. “The last thing my wife and I want on our plate is dealing with finances — both of us are just trying to make it through the night,” says Blumenthal, whose Newport Beach, Calif.-based employer manages about $10 billion.

Lisa Colletti

Balancing Act

New babies can also bring new business. Blumenthal recently met with a prospect — a healthy executive — worried about her new baby’s financial future in the event of the deaths of her and her husband. Instead of trotting out a bunch of actuarial statistics, he sat down and helped her estimate what the child would need for household expenses and educational costs — and recommended an insurance strategy to cover them. The women and her husband are now clients, and Blumenthal plans to get them thinking about boosting their emergency-fund savings and their college-savings plans.

Once a baby arrives, proud parents tend to overlook more subtle ways to protect the child’s financial future, says Michael Bernier, an advisor at San Diego-based Pure Financial Advisors, which manages $1.1 billion. He suggests making sure parents have a living trust and will to designate guardians for their children in case of the parents’ deaths.

Most of all, developing a financial plan for a growing family is a process that has to be flexible enough to evolve over time. “It can be a tough balancing act,” he says. “But you’ve got to reinforce a family’s long-term goals and create an awareness that even new parents can’t afford to ignore their own retirement goals.”