Some clients will remember dial telephones. They date back to a time when one income was often sufficient to support a family, a college education was the ticket to a comfortable middle-class lifestyle, and defined benefit pension plans were the norm. While on this nostalgic journey, your client will remember that children grew up, went to college, got good jobs at graduation, moved out, got married and started a family, usually in that order. But in the 21st century, parents of all ages find their adult children are staying in the nest or coming back for a second stay. What should they do?
Boomerang children — adult offspring who return home — are often thought of as recent graduates who can’t get a job or afford to live on their own. But it can happen later in life, such as when a divorced adult child comes back to live with their parents.
Having a grown child living at home is not always a bad thing. Some families might encourage the recent college graduate to live at home, saving their paychecks toward a future downpayment on a house. Multigenerational families living under one roof is common in some cultures. Grandparents provide childcare while their children build their careers. Fans of the Downton Abbey series will recall most of the Crawley family seemed to live in the big house or someplace on the estate.
Conversations That’ll Backfire
The Pew Research Center noted that, based on data from the U.S Census, 36% of young men and 30% of young women (ages 18 to 34) in the U.S. lived in their parents’ home in 2021. CNBC reported 67% of “pandemic boomerang kids” continue to live at home.
There are right and wrong ways to address the situation. What might be the wrong way? Easy answer. Do not be confrontational. This might include:
- “When are you leaving? You can’t stay forever.”
- “Why did we bother sending you to college?”
OK, so you are not confrontational, you are welcoming. That can have a bad outcome too.
- Treat them like they are 8 years old again. They will never leave.
- Not charging rent, doing laundry for free. Why leave?
- Treating them like hired help. Now they are not paying and are resentful.
The Right Approach
What is the right approach? There needs to be a plan in place. Start with an agreed-upon time the child can stay. As an FYI, I worked with someone who upon their child’s graduation took the child’s former bedroom and redecorated it as a guest room. As their child moved into their new job elsewhere in the country, they were told they were welcome back anytime — for a visit. The conversion of their former bedroom meant they were moving into the next stage of their life.
Additional Reading: The Wisdom of the Multigenerational Cruise
If we used this scenario in the boomerang child story, the child is coming back on a temporary basis. A time period is agreed upon. This does not mean they must leave, like a hotel guest facing checkout time. It can be renegotiated. The point is, the situation is not open-ended.
What happens next? The plan likely considers this a job-hunting scenario. The child’s job is finding their next job. The family is providing rent-free accommodation, and probably means, too. They have a legal address for mail and job-hunting purposes. If the boomerang child is living at home because of debt problems but still employed, they can live rent-free while repaying their debt.
How You Can Help
Where does the financial advisor fit into this situation? Why should they get involved? From a business point of view, the client might be operating in crisis mode. They do not want to make any investment decisions until their problem is resolved. On a nobler note, the advisor is showing their value by viewing the situation from a third party (outsider’s) perspective. The advisor can be objective.
What can they talk about?
- Ground rules: Is there a plan in place? Have the parents established a timeframe?
- Back story: How is their child doing? What field of study did they pursue in college?
- Encouragement: You are doing something wonderful for them.
- Technology: How are they using social media sites like LinkedIn during their job search?
- Old school ties. Have they contacted their college alumni office? What resources or advice can they offer?
- Add dignity: The situation is similar to that of an executive with a severance package covering them for several months while they conduct their job hunt.
- Feedback: Are they appreciative of your help?
- Focus: Are you supportive?
Assuming their child is focused and the parents are sharing their contacts in the business world, this problem should resolve itself. You might have some job-hunting resources you could suggest. One the problem is resolved and “normal service” is resumed the bond you share should be even tighter. You helped them through a difficult situation, one where there was not an immediate payout for the advisor.
Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book “Captivating the Wealthy Investor” is available on Amazon.
