The financial impact of blended, same-sex
and multi-generational families
UBS Wealth Management Americas (WMA) today released its
quarterly UBS Investor Watch report, "Beyond the Picket Fence,"
revealing that among high-net-worth investors, “modern” families
(34%) – including blended, same-sex and multi-generational families
– are nearly as common as “traditional” families1 (35%). The survey
of 2,715 high-net-worth (HNW) and affluent U.S. investors found
that the rise of modern families is a burgeoning trend as
traditional families become less and less common by generation,
currently comprising 46% of the WWII/Swing generation, 37% of Baby
Boomers, and only 25% of Millennials.
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Despite the fact that family dynamics are changing across the
wealth spectrum Investor Watch found that seven out of 10 HNW and
affluent investors feel that 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,"
said Paula Polito, Client Strategy Officer, UBS Wealth Management
Americas. "There is a real opportunity to respond to the rapidly
and dramatically changing family dynamics in modern America."
Blended Families: A Complicated Legacy
Blended families – those with children from a prior relationship
– represent 14% of the HNW and affluent investor population, and
experience heightened financial and emotional challenges relative
to traditional families. The survey found that overall blended
families (55%) feel they lead more complicated lives compared to
traditional families (48%) and more so when it comes to their
finances (55% vs 44%) and retirement planning (64% vs. 54%).
Creating a larger family is of course more expensive, though 44%
of wealthy investors say they underestimated the true cost of
supporting more children. Added to the financial challenge blended
families face are the emotional strains felt by parents taking on
responsibility for children that are not biologically theirs: to
illustrate, 63% of HNW and affluent investors admitted that their
spouse’s children do not completely accept them.
Consequently, blended families often have a more difficult
challenge in planning their inheritance. When it comes to
inheritance planning, Investor Watch found that 67% of blended
families don't know how they will divide up their wealth, physical
assets or business interests, compared to half of those in
traditional families. As a result blended families are less likely
to have open discussions about wealth transfer (50% of blended
families vs. 65% of traditional families) and are less confident
that their eventual decisions will satisfy their heirs, with 31% of
blended family HNW and affluent investors responding that there are
conflicts among potential heirs compared to 12% of traditional
families.
Same-Sex Couples and the Right to Marriage, Now What?
Same-sex couples in the U.S. reached a major milestone with the
June 26th Supreme Court ruling guaranteeing the right to same-sex
marriage across the country, causing seven out of ten same-sex
[families] to believe that their lives have been changed. Half feel
the decision will positively impact their personal life, especially
when it comes to the extension of certain health and retirement
benefits, while 42% believe it will benefit their career.
However, 60% of same-sex couples feel that 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 (e.g., Social Security, health and
retirement benefits) 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.
“While the recent landmark Supreme Court
ruling legalized same-sex marriage and guaranteed 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. A quarter (25%) 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.
Multi-Generational Families and Competing Financial
Needs
Previous Investor Watch studies found that more adult children
and aging parents are sharing homes, challenging conventional
lifestyles and adding pressure to loved ones to support them
financially. This quarter’s survey revealed that for families with
adult children still in the home, more than half worry about
maintaining their current financial situation (53%). They are also
less confident about reaching financial objectives (70% highly
confident vs. 79%) and more worried about affording healthcare in
their old age (61% worried vs. 44%).
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. Fifty-six
percent said that retirement planning is at least “somewhat
complicated” for them, compared to 42% of families living without
an aging parent.
We invite you to read the full report here:
www.ubs.com/investorwatch
1 Defined as heterosexual married couples with children
About UBS Investor Watch
UBS Investor Watch is a quarterly publication analyzing the
latest in investor sentiment and behavior. Dedicated to generating
insights that help UBS Financial Advisors deliver exceptionally for
their clients, UBS Investor Watch is the industry’s definitive
guide to what’s on investors’ minds right now.
Methodology
For this twelfth edition of UBS Investor Watch, 2,715 affluent
and high-net-worth investors responded to our survey from June 10 –
16, 2015. The core sample of 1,787 investors have at least $1
million in investable assets, including 422 with at least $5
million. With 78 survey respondents, we conducted qualitative
follow up interviews.
Notes to Editors
About UBS Wealth Management Americas
Wealth Management Americas is one of the leading wealth managers
in the Americas in terms of financial advisor productivity and
invested assets. It provides advice-based solutions and banking
services through financial advisors who deliver a fully integrated
set of products and services specifically designed to address the
needs of ultra-high net worth and high net worth individuals and
families. It includes the domestic US and Canadian business as well
as the international business booked in the US.
About UBS
UBS is committed to providing private, institutional and
corporate clients worldwide, as well as retail clients in
Switzerland, with superior financial advice and solutions while
generating attractive and sustainable returns for shareholders. Its
strategy centers on its Wealth Management and Wealth Management
Americas businesses and its leading universal bank in Switzerland,
complemented by its Global Asset Management business and its
Investment Bank. These businesses share three key characteristics:
they benefit from a strong competitive position in their targeted
markets, are capital-efficient, and offer a superior structural
growth and profitability outlook. UBS's strategy builds on the
strengths of all of its businesses and focuses its efforts on areas
in which it excels, while seeking to capitalize on the compelling
growth prospects in the businesses and regions in which it
operates. Capital strength is the foundation of its success.
UBS is present in all major financial centers worldwide. It has
offices in more than 50 countries, with about 35% of its employees
working in the Americas, 36% in Switzerland, 17% in the rest of
Europe, the Middle East and Africa and 12% in Asia Pacific. UBS
Group AG employs about 60,000 people around the world. Its shares
are listed on the SIX Swiss Exchange and the New York Stock
Exchange (NYSE).
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Media InquiriesUBSNew York:Gregg Rosenberg,
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