young-boy-coins

When Liam broke his iPhone, he walked into an Apple store and, to his delight, promptly received a new one. His 10-year-old younger brother Aiden—an Apple stockholder—wasn’t too pleased.

“That couldn’t possibly be good for their margins,” he mused.

While Aiden didn’t understand the nuances of customer service or the numbers in his annual investment statement, he did grasp one basic concept: it’s not good business to give away free phones.

Colleen Moorehead, Liam and Aiden’s mother, and in charge of marketing and investor communications at hedge fund manager East Coast Fund Management, made sure her boys were exposed to the principles of money at a young age.

Moorehead and her husband have also bought nieces and nephews stocks as birthday presents. One niece, who ended up in the investment business, credits the Bell stock gifted by her aunt and uncle for sparking her early interest in investing.

Read: How to teach kids about finances

“Part of raising children means they will inherit your wealth,” says Moorehead. “But part of their upbringing entails realizing they need to also build their own.”

The role she’s played in her kids’ economic initiations is similar to the one all good financial advisors could play in enabling the financial fitness of their clients’ children. Moorehead says many of the high-net-worth advisors and brokers she’s worked with think of families in their entireties. “Successful advisors offer services such as family trusts. Once you have a family trust, it’s incumbent on you to meet the kids,” she says.

“As a retail broker in 1983, I developed a course teaching women financial literacy. Our kids need to be taught the same,” she adds. “Economic literacy gives power and independence.”

Bind your book

Susan Latremoille, wealth advisor with The Latremoille Group at Richardson GMP and author of It’s Not Just About the Money—The Whole Life Approach to Wealth Management, says financially mentoring clients’ children is a great way to offer value to current clients while building a relationship with the next generation.

A client’s daughter who attended one of Latremoille’s seminars later approached her and asked, “Will you take me?” Latremoille said yes. That’s her usual answer when dealing with a family, even if the kids don’t have the usual $2 million to qualify for her practice.

Read: Gen Y: Your future clients

“Many times those adult children will help settle the estate,” she says. “We only have 100 clients, and we want to be all things to a few people rather than be meaningless to a lot of people. It works better if we keep it in the family.”

Some of Latremoille’s clients ask if they can bring their 18-year-old children for an introduction because they want her to form a relationship with the next of kin. Typically they put some money into an account in the name of their child and request she work directly with their son or daughter.

The meeting demystifies the severe aura of a financial practice. “It can be intimidating for young people to come to formal finance offices. But once they lose their inhibition, many ask sophisticated questions, like how the recent quantitative easing might impact their portfolios, or [mention] how they’d like access to emerging markets,” Latremoille says.

Once the relationship is established, Latremoille constructs an investment policy statement. “We talk about specific types of investments and if the money is for higher education, buying a house, or long-term investment,” she says. “We determine their time horizon and they examine how risk-averse they are. We educate them about building wealth through a portfolio approach and investments they can understand. And like with their parents, we review their account once or twice a year.”

Get ’em young

Kids can absorb information about financial matters, but parents are not getting support from the most expected quarter—schools. Canadian school curriculums have typically lacked money management training, and Montreal-based Philippe Racine’s entrepreneurial success is glaring proof. Three years ago, he wanted to teach his two daughters about money. He searched for educational materials, but aside from bulky manuals, he didn’t find much.

Undaunted, he founded Ekomini.com, the world’s first interactive, web-enabled piggy bank. Although Ekomini—a play on economy—doesn’t teach kids how to steer clear of high-interest loans, pass up houses they can’t afford, or avoid Earl Jones, it does teach them financial basics.

Read: Canadian youth unrealistic about finances

“We encouraged our girls to set themselves concrete targets. Every time they had a new demand, our reaction was, ‘Let’s start saving,’ ” says Racine.

Racine integrated this deferred-gratification concept into his digital piggy bank. With the help of relatable characters and a virtual town called Ekominiville, the game literally teaches money doesn’t grow on trees.

The response has been overwhelming. When he launched in 2010, Racine wasn’t prepared for the slew of product requests he received from major banks in more than 20 countries. This pent-up demand for financial literacy is partly due to the global recession, which has made the economy an overriding concern for most households. “It’s become easy to introduce this concept to parents, and to pitch it to bank managers and financial advisors,” Racine says.

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