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Need financial advice? Talk to mom

Fidelity survey shows children get more details about financial topics from mom.

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Mothers tend to have more success in talking with their adult children about financial planning topics than fathers do, according to a new Fidelity Investments study released today.

The study showed significant communication gaps between mothers and fathers and their adult children when discussing financial topics, especially on a range of sensitive issues such as the ability to cover living expenses in retirement, and health and eldercare. Mothers tend to take on the role of the "empathizer," and find it easier to talk with their adult children than fathers do, the study showed.

The new findings are part of the Intra-Family Generational Finance study that Fidelity Investments conducted across its pool of investors. To qualify for the study, parents had to be at least 55 years of age, have an adult child older than 30, and have investible assets of at least $100,000.1

Mothers tend to have more detailed conversations with their adult children about sensitive financial topics such as estate planning or wills (79% of mothers vs. 69% of fathers), the ability to cover living expenses in retirement (70%, vs. 55% of fathers), and health and eldercare (66% vs. 56% of fathers), according to the study.

Does your family need help communicating?

"We encourage all families to engage in meaningful conversations on these financial topics, and as this research indicates, starting the discussion with mom may be a good strategy," said Lauren Brouhard, senior vice president, Fidelity Investments. "Regardless of who these conversations begin with, discussions about finances are deeply personal, and often even taboo in some families. Planning together and learning from one another on a broad range of financial topics can have a positive impact on the personal economy of your family."

Mothers are twice as likely to describe themselves as the "empathizer" in the family, vs. fathers who would (15% vs. 6%). Sixty-four percent of mothers surveyed say it is "not at all difficult" to start a conversation with their child about savings and investments, vs. 54% of fathers who would say this. Often, fathers believe that encouraging independence among their children and taking a more pragmatic, straightforward approach tend to be more valuable in the long run. Indeed, more than half the men (54%) see themselves as the "pragmatist" when having financial conversations with their adult children.

Also, more mothers (13%, vs. 3% of fathers) are planning on an adult child caring for them if they become ill, while more fathers (47%, vs. 32% of mothers) are counting on their spouse to care for them—important details for adult children to be aware of when conversing with their parents.

Part of the reason that women take a larger role in conversations about financial topics is because women, in general, tend to control the bulk of household finances.2 They fuel the economy by making more than 85% of consumer purchases and influencing more than 95% of total goods and service purchases.3 Studies predict that women will control two-thirds of the nation’s wealth by 2020.4

In fact, two separate Fidelity studies conducted in 20125 showed that women tend to "stay the course" during turbulent market times and keep their eye on long-term goals. The studies also showed that women are more focused on comprehensive financial planning, while men tend to focus more on investment returns. While women typically earn two-thirds of what men do, and while their retirement nest egg balances are smaller on average ($60,8000, versus $91,500 for men), women actually save more of their income than men do: Total employee deferrals, normalized for their salary differences, is 8.3% for women, versus 7.9% for men.

To be sure, each family has its own dynamics when discussing financial topics, and there is no single way that’s better. However, on average, families need to communicate better. While 95% of adult children and their parents agreed that it’s important to have frank conversations about wills, estate planning, or health care, there was little agreement on when to talk, the study found. Only one in three (34%) parents and their children agreed on the best time to have those conversations.

For help on holding family discussions about financial topics, read Viewpoints: Communications gap, which highlights a four-step "PREP" plan on having successful conversations about money. The tools below also may help to start your own family conversations.

Learn more

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1 The children in the study qualified if they were at least 30 years of age and had money saved in an IRA, 401(k), or other investment account, and must have saved at least $10,000.
2 The Working Mother and Chase® SLATE® "Life of a Working Mother: Career, Family and Finances" survey, 2013.
3 Fabry, Susan, "Women Dominate the Global Market Place; Here Are 5 Keys to Reaching Them," Fast Company, 2013.
4 "The Female Economy," Harvard Business Review, Sept. 2009.
5 Fidelity Investments, Millionaire Outlook: Women & Wealth—November 2012; and Fidelity Investments, based on Fidelity analysis of 20,222 corporate DC plans (including advisor-sold DC) and 12M participants, as of 12/31/2012. Analysis assumes a retirement age of 65.
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Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
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