When Clients Consider Education



Financial advisors likely have a checklist of topics they cover with new clients. Retirement funding, employment matters and family issues are probably on the top of the list.

When the conversation turns to family matters, one of the primary topics related to financial concerns is education. When a new client is still planning a family, education funding is a key topic. When a new client already has a child or two at home, education funding becomes critical.

No two investors are identical, and as future clients, it is important for advisors to understand the value an investor places on the education of their children. While getting a college education is certainly a topic of conversation for an investor who may one day need to pay for a higher education for their children, elementary and secondary education funding is also a topic of conversation in a day when parents have more choices in terms of public or private schooling.

Spectrem’s study Parenting and Financial Decisions examined the choices future and current parents have regarding the education of their children as well as the funding choices they have for that purpose. AS a jumping off point, the choices and priorities these investors have regarding the education of their children was examined.

Advisors can look at this research to understand how to approach new clients, those with children and those who do not yet have children but plan to build a family someday, to determine how best to advise them regarding the funding of their children’s education.

According to the Spectrem study, 37 percent of investors who do not have children yet plan to send their children to private school rather than public school. That decision will include an additional expense that those clients need to consider as they plan for the arrival of their future children and their educational path. Note that male investors are slightly more likely than female investors to want their children to attend private school. It is also important to note that the percentage of those insistent on a private education for their children drops to 28 percent for those investors who already have dependent children. 

The prospect of acquiring a college education is a topic of some discussion these days. Many people are considering trade schools or apprenticeships to prepare for a career rather than going to a 4-year college. Still, parents need to plan financially for whatever their children plan to do, especially if there is going to be a significant cost related to their decision.

According to the study, 85 percent of investors with dependent children consider it important for their children to get a college education. But only 64 percent of those investors who do not yet have children feel that way. And of those male investors who do not yet have children, only 50 percent confirmed the value of their children getting a college education.

Notably, of those investors who do not yet have children, the wealthier the investor, the less they agreed with that statement about the importance of a college education. Among those investors who do not yet have children and have a net worth under $500,000, 82 percent consider a college education to be important for their children.  



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Keywords: education, clients, investors, Advisors, Spectrem, private, college