Parents usually teach their children various values but often neglect to teach them the importance of savings and investments. Financial advisers can help their clients when it comes to teaching financial lessons to children.
Many adviser believe that IFAs could get the second generation of existing clients by involving them in the financial planning process. Here is what they have to say
Pradeep Jain, PMPK Wealth Advisors, Ranchi
I encourage my clients to introduce various concepts of finance to their children from a young age. If the client’s child is in pre-primary, we ask them to teach their children how to recognize various currency denominations. For a child who has learnt basic arithmetic, we ask them to teach counting money. For children above 10 years, we ask clients to start involving them in minor budgeting like how to have a birthday party in a given budget. For children in higher secondary schools, we ask parents to teach them the concept of savings and wealth accumulation.
To increase engagement with them, I conduct financial literacy sessions for the children of my existing clients. In these quarterly sessions, I teach them about importance of savings and investments. I also explain to them how inflation can eat up savings through various role-plays. In fact, a few of these children approached me to plan their finances when they got their first jobs.
Mimi Partha Sarathy, Sinhasi, Bangalore
In India, many parents think it inappropriate to discuss financial matters in front of their children.
I,however, encourage my clients to teach their children about the value of money and investments. In my view, teaching financial lessons to children is an important aspect of their grooming.
As part of my practice, I encourage all my clients to make financial education a part of everyday conversation. I also insist on all my clients having a financial plan for their kids and emphasize the importance of having a separate bank account for the child.
Since mothers spend more time with their children when compared to their spouse, I conduct workshops for mothers to discuss how they can instil the discipline of saving and wealth accumulation among their children.
I also ask my clients to give their children small financial planning projects like saving for a gadget they want to buy or planning a holiday in a given budget. These activities familiarise kids with finance. Hence, when they need to make financial decisions on their own, these kids are more confident and tend to start their financial planning process earlier than children who have not had exposure to financial planning.