Pearson and her associates encourage their existing clients to bring family members to meetings or have them sit in on conference calls. The firm also wants household members to have their own separate meetings with Legend to discuss their own financial goals and objectives. "We also have changed our contracts with current clients to incorporate management of other family members' investment portfolios in order to be billed at a reduced rate," she adds.

Susan S. Spraker, the founder and president of Maitland, Fla.-based Spraker Wealth Management Inc., says financial advisors are necessary here because they provide transition when older family members die. "The assets then have management continuity," she says, so the family can avoid "unnecessary wholesale liquidation of securities, unnecessary taxes, etc., assuming the same advisor will continue to handle the accounts."

In those cases, the assets can simply be retitled and moved in kind, pro rata, to the beneficiaries. The second generation, rather than being caught off guard, knows what the assets are and what needs to be managed, having participated in the transition planning with the parents, Spraker says. "This also creates opportunities for ensuring estate plan documents are in order, that the children have the necessary [power of attorney], that they are aware of the wishes stated in the parents' living will, and that they are prepared to become successor trustees, if that's part of the plan. The advisor can also train the children to fulfill these roles."

Chris Bixby, a financial planning manager and senior vice president at Key Private Bank, sees family financial literacy education as the primary opportunity for his practice, noting that families have a poor track record of talking about their personal financial situation. "Parents don't communicate their financial status with their children, even adult children, and children hide their financial problems from their parents," Bixby says. "This new environment allows families to begin to educate themselves together and start working as a unit to promote fiscal health."

Acting as a holistic planner means Bixby must be able to talk about family dynamics. "Since families are looking for advice that spans multiple generations, they are looking for holistic advice as opposed to specific technical advice," he explains.

Pradeep Tempalli, a financial planner at Umpqua Private Bank in Portland, Ore., is also targeting complex family dynamics in his practice. With multigenerational homes, there is greater need for more financial planning and retirement planning services, he says. As the households become more complex, it's harder for people to prepare for and anticipate their future needs.

For example, "We see more clients looking for long-term-care insurance as older generations move closer or [move] in with younger ones," Tempalli says. "Even our high-net-worth clients are getting this insurance as life expectancy rates increase." He admits that health care and estate-planning issues are topics that people are uncomfortable talking about, "but we gently open up the discussion because it's important and impacts the quality of their retirement."

In some respects, the emergence of multigenerational households as a more prominent feature in the financial landscape has been a boon to Farmers & Merchants Trust Company, a 90-year-old firm with offices in Long Beach and Laguna Hills, Calif., that specializes in intergenerational wealth transfer. "As a trust company, one of our strengths is in multigenerational planning," says Kevin M. Tiber, senior vice president at the firm. "This trend has given us an opportunity to engage those multigenerational issues proactively."

Often, families find themselves in these situations unexpectedly; an elderly parent might have to come live with his child after suffering failing health or an adult child might lose a job or otherwise lack financial resources. Tiber says his firm helps families make the adjustment. "We often work as a mediator or buffer for the primary generation who are shouldering the majority of the support for the household. We are often asked to speak independently to a child to provide guidance and, in some cases, to offer career advice, etc."

Still, financial advisors dealing with these families must be prepared to deal with the cultural and generation-specific issues that are almost sure to arise. Many of Tiber's clients in these situations were "a bit shocked and/or dismayed" when they found family members moving in, and were particularly worried about how it might harm their retirement plans.