Modern Family is not just a TV show these days; it is a reality.
The number of nontraditional families among the wealthy are almost equal to the traditional families made up of mom, dad and their offspring, according to a new survey published in UBS's Investor Watch.
Nontraditional families—including "blended" families that include step-parents and step-children, same-sex couples and households composed of three or more generations—account for 34 percent of households with at least $5 million in liquid assets, compared to traditional families, at 35 percent.
As the family makeup changes, their financial needs change, says the UBS Wealth Management Americas report, "Beyond the Picket Fence," which surveyed 1,365 investors with at least $1 million in investable assets and 422 with at least $5 million between June 10 and June16.
The rise of modern families is a burgeoning trend, the report says. Traditional families are becoming less common with each generation, currently making up 46 percent of World War II families, 37 percent of baby boomers and only 25 percent of millennials, according to the report.
Despite these changing dynamics, 70 percent of those surveyed feel financial advice is typically designed with only the traditional family in mind.
"It's important for the financial industry to start addressing the complexities of modern families," says Paula Polito, client strategy officer at UBS Wealth Management Americas. "There is a real opportunity to respond to the rapidly and dramatically changing family dynamics in modern America."
For example, 60 percent of same-sex couples feel there is not enough financial guidance for families like theirs. They continue to believe, more than traditional or blended families, that financial advice and support systems are not constructed to support their type of family. Seventy-two percent are actively seeking guidance to understand how the legalization of same-sex marriage affects their benefits.
“Same-sex couples are a long way from being financially worry-free,” says Sameer Aurora, head of client strategy for UBS Wealth Management Americas. “Same-sex couples are attempting to translate what the ruling really means for them, their benefits and their financial situation, making financial planning that much more critical.”
Financial planning for same-sex couples becomes increasingly complicated in terms of estate planning. One quarter do not feel accepted by their parents and believe their inheritance was, or could, be affected by their sexual orientation. In addition, their own legacy planning is often fraught with conflict among potential heirs because few have children of their own, UBS says.
Families living with aging parents find themselves having a harder time balancing the financial needs of everyone in their family and being able to retire on their own timeline, according to the report. Fifty-six percent said that retirement planning is at least “somewhat complicated” for them, compared to 42 percent of families living without an aging parent.