Business Health’s latest CATScan analysis (CATScan is our client survey service) reveals highly loyal Australian advice clients. With 55% of clients aged 60+, 45% retired, and 42% having tenure of over seven years, relationships are strong. However, this demographic is also navigating a massive wealth transfer, changing longevity, and the economic pressures of the ‘Bank of Mum and Dad.’ Our work with US advisers presents a similar picture.

Clients are participating in the greatest transfer of wealth in history, backgrounded by rising cost of living pressures and uncertainty as to how long their savings will last (improved longevity can have that effect). Their needs are being reshaped as are those of their children.

The need for financial advice has never been greater and the opportunity for an even deeper client connection never more promising.

Real risks for parents

For many families, this informal “bank” is now a critical source of financial support – helping adult children enter the housing market, covering day-to-day expenses, and contributing to grandchildren’s education.
But while this support may deliver meaningful benefits for the next generation, it also introduces real risks for parents – and this is where advisors can help significantly.

It’s mainstream

As observed by several experts over the past few months, parents are increasingly contributing to everyday living costs, bills, and education expenses for grandchildren. Similar patterns are emerging globally, with US data showing that half of all parents with adult children were now providing regular financial assistance. Further research shows 42% of supporting parents experience financial stress as a result of assisting their children.

This is no longer a fringe issue and is becoming central to family financial planning. And while the motivation for parents to help their children is strong, the risks are inherent and very real.

Health, harmony and financial stress

Many clients face a fundamental tension: balancing support for their children today, with their own future needs (healthcare, lifestyle and aged care) at a time when their earning capacity is limited or non-existent.

Adapting

It’s our strong belief that this environment presents a powerful opportunity for advisors to deepen relationships and broaden their value proposition. Clients, and increasingly their families, are seeking more holistic guidance. Of course, traditional investment advice services remain critical, but in our view,  they are no longer sufficient on their own.

Advisors who lead in this space are:

  • Addressing the big picture of real-life financial challenges, not just portfolios.
  • Facilitating family-based financial conversations.
  • Providing structured frameworks for intergenerational support.

Some practical considerations;

1. Engage proactively
Address topics such as:

  • Gifting vs lending to children – the pros and cons.
  • Structuring financial support – and avoiding potential misunderstandings.
  • Equalization between family members – ensuring each family member is being treated fairly.
  • Longevity, aged care and retirement sustainability – and address the impact of rising costs on the standard and quality of life.
  • Estate planning – often overlooked until it’s too late.

2. Connect to the broader family
Engaging not just your primary client, but also their children. While conducting client (family) meetings virtually can be easier to organize and time efficient in delivery, they’re not so great on building long-term relationships. Would it be possible to hold an in-person family meeting at least once a year?

3. Collaborate
While you certainly don’t need to build a 100% solution in-house (and in some ways it could be preferable that you don’t), it is important that you can facilitate access to relevant services.

Develop strategic alliances with like-minded professionals who have complementary expertise in allied areas; partnering with them to provide integrated guidance.

Great advice makes the greatest difference

The “bank of mum and dad” is certainly not a side issue, it’s central to many clients’ financial lives – and advisors who recognize this and adapt accordingly have a wonderful opportunity to strengthen trust, increase engagement and position themselves at the centre of multi-generational relationships. Because ultimately, this trend is not just about money – it’s about family, values and financial security across generations.