This month I had an interesting experience interviewing advisors about the problems of retirees living beyond their means. Even among financial advisors’ clients, it’s a bigger problem than many in the business think.

Part of the reason is the changing nature of the relationship between parent and child since the late 20th century. In general, today’s parents are far more involved than earlier generations.

By and large, parental involvement in everything from academics to sports to music lessons is a good thing to be encouraged. But one only has to watch professional baseball or tennis or golf and see parents in the stands or the sidelines to realize that this degree of involvement can border on the obsessive.

Sometimes it crosses the line. In the Northeast, some high school hockey rinks have signs with codes of parental conduct in the stands. Some high school hockey and basketball referees have been assaulted after games; others have been offered police protection.

Getting into college today is ferociously competitive, and a look at the unemployment rate of 4% among college grads, much lower than the national average, explains why universities can defy the laws of economics and keep raising prices at a pace that defies reason. That alone makes raising a child more of an investment than it did for previous generations.

Technology has also changed the relationship. When my generation was in college, we called home collect on weekends.
Today, e-mail, texting and social media result in a manifold increase in the frequency of contact. At my friend’s 50th birthday party a few years ago, her son needled her about calling him at college via cell phone to say that his favorite cereal had passed its sell-by date.

One result of these intensely close relationships is that when it comes to money issues, parents simply find it much harder to say no. The upshot is that the financial aspects of family dynamics are going to be very different for the next 40 years than they were for the previous four decades.

Family units have always been supportive of each other—to a degree. But if a cardiologist had a daughter who was a corporate attorney and a son who became a gym teacher, the likelihood in past generations was that each family member was self-supporting. At big-family Thanksgiving dinners, the diversity of opportunity and the mobility in American society was evident.

Whether it’s a result of changing family relationships or the Great Recession, family units are becoming increasingly interdependent. For advisors, that is going to be a big change going forward.

Evan Simonoff, Editor-in-Chief
E-mail me at with your opinion.