# At age of 70 parents ask for financial advice....



## The Black Wizard (May 16, 2017)

Hi all, 

This is my first time posting here. So when I was in my early 20's my Dad freaked out on me for not wanting a real job... I told him I wanted to invest and of course he said get a real job and by that he meant an office job. I've never been one for 9-5's and while I tried it out, it never quite agreed with me. Now I work in the film and ent biz and invest. After that convo with my Dad in my 20's I never shared any info about where I worked, or financial info although I guess he knows that I'm an avid investor.

So in their early 70's, my Mom and dad have asked me for financial advice about stocks etc b/c they aren't happy with how their mutual funds are doing. They want my advice. Part of me is terrified b/c in my mind I'm thinking you guys are getting older and I thought you had it together, this is no time to be tinkering around. I have two much older brothers that they usually ask for stuff. I also don't want them sniffing into my business as I live my life very discreetly. 

I also found out that my grandmother is going to be experiencing a financial shortfall paying for her retirement residence, and perhaps this may have put my parents into panic mode. Keep in mind they never share anything of this type of stuff with me as I'm the youngest. 

Do you guys usually give your parents financial advice? How would you deal with this situation if it occurred in your family?


----------



## CalgaryPotato (Mar 7, 2015)

Assuming that someone knows anything about finances just because they are older is a big mistake. 

Also depending on timing of investing many people rode a lot of lucky timing to a lot of success. I had one elderly relative who invested almost completely in fixed income for her whole life, but because the interest rates were so high particularly in her later working and early retirement years it worked out awesome for her. 

Same as the fact your parents may have done just fine in mutual fund products because the markets have generally done well if you've had money in them for decades.

With my in-laws we had to more or less completely take over their finances when they were in their 60's. They were in a situation of massive consumer debt and 0 retirement savings that they had kept to themselves. We helped them get out of the debt and a little bit of savings going into retirement. They are still in a bad financial state, but it would have been much worse if we hadn't intervened.

So if they reached out and asked for your help, take a look, give them some thoughts, they may or may not take your advice, don't be offended if they don't.


----------



## Just a Guy (Mar 27, 2012)

I lived a fairly similar life, but it was more the inlaws that were the problem. 

My inlaws think of themselves as "investors", but to them that meant buying mutual funds recommended to them by a broker. They also once bought an apartment block, but sold it soon after. 

I turned to investing as a means of survival, so I needed to become much more educated than they were. 

Personally, I'd steer clear of any specific advice. General information, giving resources, etc. is probably the way to go. Finances, like politics, are not a good family topics. 

Over the years I never bring up finances but every once in a while something may slip out (I won't avoid the topic, just keep my answers short usually). I don't like how I feel after a conversation (part of it is I know a lot more than they do and part of it is the way family tends to treat people). 

If they want real advice or opinions I'd give it, but most of the time people aren't really looking for information, they are either looking for someone to do it for them, or looking for ammunition to attack your way of life. I find that the younger family members (nieces and nephews) are the ones who may really be interested and I'll give them any help I can if they want, but siblings and parents aren't really interested for financial reasons. 

Truth is, when you're in your 70's you should be treading water, not jumping in the deep end. I haven't got a clue as to what one could recommend to them in the first place. Be honest with them, but don't get sucked in.


----------



## AltaRed (Jun 8, 2009)

I never ever gave my parents financial advice because they never asked for it, nor did they ever discuss it except the odd 'bragging' comment now and then about how well they were doing after they sold the ranch and put the proceeds into a variety of things (as I found out later dealing with father's estate). They actually didn't do too bad as it turns out.

We don't have a lot to go on here... i.e. relationship between your parents and your other siblings "that they ask for stuff" is meaningless to us. Does that mean your parents have asked them for financial advice? If so, how has that worked out?

Do you know if your parents strictly have their mutual funds at the bank? A full service brokerage advisor? Do you know what mutual funds they are in? 

One thing I can say for sure is that now (in their '70s) is NOT the time for them to move to individual stocks and I think as a minimum, you should tell them that.. BUT at the same time it would be appropriate to ask why they think that? What do they think that will acheive for them? It is what I would do with my parents had they asked. There is no way I can see to go further. If they are not forthcoming with more info, I'd perhaps point them to reading parts of www.finiki.org (particularly Investment Management and Retirement Planning) to organize their thoughts on possible changes.


----------



## redsgomarching (Mar 6, 2016)

Our family believes in transparency with each other's well beings. we arent in competition as we believe if that we will all benefit if we help each other out. this is why a lot of our financial decisions are discussed as a family - so yes i do give advice to parents based on research that I have either done myself or experience or simply just through talking things out. Furthermore, any reports read from newspapers etc that could potentially lead to a tip on a stock or even when earnings reports and what it might look like is always discussed. I remember when SHOMI was going under and being replaced with netflix subscriptions at a time where netflix was lagging due to summer time low subscriber numbers. As soon as the last quarter results came out the stock shot from 87$ to over 100 and is now sitting at $160. 

E.G, dad had around 1 mill with an IA from Nesbitt Burns. Long story short the performance just wasn't there even though there has been some stellar performance in the index. Not only was he NOT posting returns of >5%. He had purchased some growth stocks on margin (which the purpose was to generate an income to deduct the margin interest on) on top of a 1% of AUM this guy basically was just leaching money. We discussed it over and over again, ran numbers, and couldn't justify keeping the money with this character. Long story short, dad dropped him and is managing himself. I wish he had done this earlier and used that 1 mill to invest into more real estate in the GTA but wishful thinking hehe.

we also talk alot about retirement planning and how to utilize our corporation and what not. its a good habit to get in to and it also gets you in the mindset of thinking ahead as well. 

the way I see it is that you are acting in the best interest as one day those funds could be transferred to you - and you sure as better hell know what to do with it.


----------



## AltaRed (Jun 8, 2009)

Red, I don't see how the OP can create anything remotely close to your kind of situation out of what the OP's situation is. It takes decades, if not generations, to develop that kind of transparency. My father would hae told me to 'go saw lumber' had I wanted to dig into his financial affairs. After all, he knew best, right?

What we need is to understand a bit better some specifics of the OP's situation and find out where he can 'tread lightly' and how much and in what depth. Are the parents willing to open the books and show the OP where they are at?


----------



## My Own Advisor (Sep 24, 2012)

Do you guys usually give your parents financial advice? How would you deal with this situation if it occurred in your family?

Yes, but only when they ask.

They know about my blog and my interest in personal finance and investing but they don't ask too many questions. 

I always find it interesting I'm trying to get out of debt (mortgage left, maybe done in 5 years?) and they have the same amount of debt (mortgage, lines of credit, car payments, etc.). They are approaching age 70. 

I'm not yet terrified about their money situation... but they are getting older and we certainly have different views on money and how it is managed.


----------



## Oldroe (Sep 18, 2009)

My dad would spout off that his buddy said rrsp are a waste of time blab blab. I would just tell him his buddy was wrong. I'm my parents case.


----------



## OnlyMyOpinion (Sep 1, 2013)

Black Wizard, Only you can decide how to respond to your parent's request. It sounds unexpected from your description of the family dynamics. This suggests they have realized there may be an issue with their investments and/or they have unrealistic expectations of what they should be able to earn from their investments. Perhaps as you noted, the light went on because of Grma's situation.

I would say it is entirely acceptable for you to say 'sorry I don't have any investment suggestions'.

If on the other hand you choose to get involved, I would suggest it is a tall order if it is to be done well:
They and you have to be prepared for an 'all or nothing' involvement - you will need to understand their full financial picture - account types, assets, debts, investments, pension income, spending, etc. 
You will need to be familiar with the nuances of retirement income (CPP/OAS/GIS, pension credit, etc.). 
You need to be familiar with the types of investments that are suitable for their situation, plans and age. 
It may be that they are in good shape for the future and just need that reassurance, but I don't think you can do them any good by just suggesting they put some money into stock A or fund B. 
Age 70 is not when they should be looking for off-the-cuff investment advice. 

It is possible that your older siblings would see such involvement as meddling or trying to get closer to their money. 

Is it possible that Grma's situation can be used as a catalyst for all of you to sit down and discuss Mom & Dad's finances and future living plans? Is their current house - stairs, washroom - amenable to a walker in the future, etc. If not, where would they live...
I believe it is very unusual for families to want to discuss this, probably more so given your description, and certainly at the relatively young age of 70. 

My parents sold the acreage and moved into a new 4-level split in the city when they were 70 and were fine there for another 10-12 years. At that time they didn't ask for our advise and we didn't offer any. It is only in their mid-80's that the wheels have fallen off entirely and I now look after all of their financial affairs under a POA.

So recognize that there may come a time in the future when your parents finances and living situation do become an issue. At that time, at least some of the children will be expected to help find a solution. In my experience, for a variety of reasons, some children will be involved and some not.

Good luck.


----------



## kcowan (Jul 1, 2010)

I had success managing MILs portfolio after I retired for 5 years but she asked. It is a long story but I would never have done if she had not asked!


----------



## AltaRed (Jun 8, 2009)

OnlyMyOpinion said:


> If on the other hand you choose to get involved, I would suggest it is a tall order if it is to be done well:
> They and you have to be prepared for an 'all or nothing' involvement - you will need to understand their full financial picture - account types, assets, debts, investments, pension income, spending, etc.
> You will need to be familiar with the nuances of retirement income (CPP/OAS/GIS, pension credit, etc.).
> You need to be familiar with the types of investments that are suitable for their situation, plans and age.
> ...


I agree with most of what you said, but not necessarily the degree of involvement. It may be that a cursory look at their mutual fund portfolio (and using fund websites to check fund 5 and 10 year returns) may tell you 80% of the story. What has been the return of that portfolio and is it reasonable for an active fund portfolio? Are the parents being unreasonable in their expectations? Or is it underperforming simply because it is constructed badly in too many 'bad' funds and needs switches to, for example, Mawer funds? I'd see if they are willing to share a 'look see' at the portfolio. If not, walk away. If so and they are interested in your opinions for change, then go for making simple recommendations for simple changes.


----------



## Mookie (Feb 29, 2012)

The Black Wizard said:


> Do you guys usually give your parents financial advice? How would you deal with this situation if it occurred in your family?


I think that your response totally depends on your relationship with your parents, and how you think your relationship may be affected if you step in to help. I think in general, if your parents have asked you for help, and if you feel like you're able to provide that help, then why not give it a shot?

I've been helping my parents with their investments for the last 5 years or so, and it has worked out pretty well. I got them out from under a supposed "financial advisor" who liked to sell them high MER DSC mutual funds, and then on top of that, proposed them taking out a *huge* leverage loan to invest even more. This is when the red flag went up for them, and they changed course, dumped their advisor, and went self-directed with my help. 

Even though I've been managing my own investments for the past 20+ years, I don't claim to be an expert in investing, and I remind my parents of that regularly, but I'm pretty sure I have more of their best interest in mind when it comes to investing than that slime ball ever had. Whenever we need to make adjustments to their portfolio, I always discuss it with them, and get their agreement before proceeding, and I always remind them that even though they've done pretty well these last few years, there are no guarantees, and there is bound to be a downturn ahead at some point. 

By the way, about a year ago I heard that their former "investment advisor" was fined $100,000 and given a 90 day suspension, and a permanent ban on offering leveraging strategies to clients by the Mutual Fund Dealers Association of Canada. The reason: he did not pay regard to documents that outlined his clients’ risk tolerance as well as things such as their age, employment status and ability to withstand investment losses, and for failing to ensure that his leveraged investment recommendations were suitable for specific clients.

Looking back, I'm so glad my parents didn't just blindly follow this crook's so-called "financial advice", and I'm glad that I was in a position to be able to help them out.


----------



## canew90 (Jul 13, 2016)

I've got mixed feelings about this topic. We are in our mid 70's and never expected or wanted financial advice from our kids. Of course neither are financially well off nor do they manage an extensive investment portfolio. We are the ones who have fairly large investments and have offered advice to them. That probably applies to most families. 

Guess the difference is we feel our investments will meet our future needs and have control of the situation. In this case the parents seem to have waited till the horses have left the barn before worrying where they are. I don't know how much experience the poster has or if he feels comfortable giving any advice. Asking for help forum this forum suggest does not. If that's the case than possibly a one time fee advisor maybe a viable option. Of course they should put together all the information others have suggested.


----------



## james4beach (Nov 15, 2012)

My parents (also close to 70) started asking me for financial advice a couple years ago. At first I started telling them everything I thought, theories and strategies, but it was too much involvement... I've backed off from that.

These days what I mainly do is check that they're not getting scammed or talked into a really bad idea. For example:

- their usual guy at IG (before they abandoned IG) suggested a new all encompassing solution to their retirement: a brand new mutual fund with no history, no track record, high MER, and barely a few million $ AUM. I told my parents that this raises all kinds of red flags and can't possibly be a good idea, and it also shows that their guy is not as good or as honest as they think.

- their usual people at RBC MF also got very pushy when they heard of imminent retirement and started pressure tactics to force fast decisions and commitments based on limited time promotions & offers. I told my parents that this is a bad sign.

- they saw a fee-only financial planner. I asked what kind of advice he gave, and I looked at the docs the planner produced. They all seem sensible and plausible. I just looked at it very roughly, to make sure it looked in the right ballpark... 30 minutes of review.

- the planner suggested a few mutual funds. I didn't recognize all of them but I had heard of one of them before. I dug into it a bit more (looked at performance, holdings, track record, and asked here on CMF) and confirmed for my parents that yes -- this one seems reasonable.

- occasionally I remind my dad of tax things that he hasn't encountered before or has forgotten, like imminent huge capital gains that will be triggered by switching mutual funds. I suggested standard advice, like delaying sales until next year to spread out the capital gains.


----------



## Beaver101 (Nov 14, 2011)

^ Your parents are lucky to have a financial savvy son like you but for those who don't ... they're feeds for the sharks.


----------



## Eclectic12 (Oct 20, 2010)

The Black Wizard said:


> ... Do you guys usually give your parents financial advice? How would you deal with this situation if it occurred in your family?


Same way no matter who is it in the family.

Give a general review with a few specific suggestions ... depending on what happens, either walk away or go a little deeper. Far too often, whomever has their mind made up already or wants the benefits with none of work.

I learned to be careful early after hearing my uncle spend a fair amount of time discussing with his sister the pros/cons of a type of investment as well as what he thought was the best. Afterwards, he commented "if she is only going pay attention to what her expert recommended - why waste time asking me?".


The only time Mom asked for ideas, I provided suggestions to her as well as my sister, the main caregiver (knowing she would need help). She followed up only because the suggestion took into account her temperament plus my sister was available to help her with the process. I noticed when it turned out well that my suggestion morphed into being a suggestion from my brother-in-law but thought that wasn't worth making a fuss about.


Cheers


----------



## OhGreatGuru (May 24, 2009)

The Black Wizard said:


> ... although I guess he knows that I'm an avid investor.
> 
> So in their early 70's, my Mom and dad have asked me for financial advice about stocks etc b/c they aren't happy with how their mutual funds are doing. They want my advice. Part of me is terrified b/c in my mind I'm thinking you guys are getting older and I thought you had it together, this is no time to be tinkering around. I have two much older brothers that they usually ask for stuff. I also don't want them sniffing into my business as I live my life very discreetly.
> 
> ...


They have asked for your advice, so you are not interfering by offering it.

You have to be careful not to advise what you would do based on your investor profile. You need to give advice that is compatible with their investor profile.

Starting to invest in stocks at their age, and with appears to be limited knowledge, is likely a bad idea.

Ask them what mutual funds they are, or have been, in and what it is they hope to improve. Also what their investment goals are. They may just be in poor performing funds; or overweight in fixed income when fixed income has been performing so badly. It could be as simple as getting them into some better mutual funds.

"sniffing into your business" - you don't need to reveal anything. If they ask, simply tell them your portfolio would not be relevant/suitable to their needs, as you are younger, have a different investor profile, and have years of experience at investing in stocks.

As others have suggested, you may need to get to the root case of why they are suddenly asking for advice, which could entail looking at their overall financial picture. But cross that bridge when (and if) you come to it.


----------



## ahzamvr (May 19, 2017)

I don't usually give financial advice but if necessary i will


----------



## Oldroe (Sep 18, 2009)

With anybody I direct them to sources of good information. I explain TFSA,RRSP,RESP and direct them to good sources. Go thru drips,gic,bonds,stocks couch potato. Whatever interest them. If they do the work and move to investing great.

I don't give specific information. If I did my sign would on the gate "Specific Investment Advice Sold Here"


----------



## Pluto (Sep 12, 2013)

The Black Wizard said:


> I also found out that my grandmother is going to be experiencing a financial shortfall paying for her retirement residence, and perhaps this may have put my parents into panic mode. Keep in mind they never share anything of this type of stuff with me as I'm the youngest.
> 
> Do you guys usually give your parents financial advice? How would you deal with this situation if it occurred in your family?


It seems like it is Grandma's rent that is precipitating this crisis. She should be able to get a subsidy for her rent. Go to the management of the residence and ask if they have any subsidiezed units and ask for the contact info for the social worker to apply. If you want to keep a low profile plant the idea in the head of your older siblings, or parents and let them do it. Once she gets a subsidy that should stop the bleeding.


----------



## tim_yonkers (May 21, 2017)

Sometime I gave my parents financial advice if they ask me for help. My father wanted to reopen my granpa's old real estate business. And he needs some help on getting fundraising. He asked me about angel investors.


----------



## Oldroe (Sep 18, 2009)

My mom pension didn't cover her nursing home so we applied for a subsidy taking about $500 off.


----------

