Advisors should include their clients’ children in meetings, explaining to them: “Your parents have amassed a certain amount of wealth because they’re very thoughtful in the choices they make with their money,” Dungan said.
Advisors can help parents teach kids about personal finance basics, like stocks, bonds and mutual funds, and how compound interest and inflation affects returns.
The goal is for kids to explore what it means to be wealthy, instead of simply asking if the family is rich, Dungan said.
If parents do not control this conversation, kids will find out information about their wealth in haphazard ways.
Dungan said kids use Zillow.com to check out the value of their homes. Others set up Google alerts so they can use U.S. Securities and Exchange Commission filings to see what their parents make.
“You’d have to be a really super-naive parent," Dungan said, "to think your kids aren’t at least somewhat aware.”