When a client’s child receives a financial windfall

By Gil Martinez | October 15, 2018 | Last updated on October 15, 2018
1 min read

In the first 10 minutes of a meeting, your client says:

Don’t forget: Emilia’s quince años* is next March. Save the date! She’s so mature. Our family usually makes cash gifts and she plans to save most of it.

At that moment

  • Ask your client how financially savvy her daughter is and if Emilia has specific plans for her birthday windfall.

Later in the meeting

  • Suggest that this is a good opportunity to introduce Emilia to investing.
  • Offer to send some planning options for her to consider.

Before your next meeting

  • If you don’t attend the party, send a birthday card (but not a gift).
  • Send the planning options for Emilia, and invite your client to bring Emilia to the next meeting for a learning session.

At your next meeting

  • Explain the different schemes you sent earlier, how they differ from one another, and what factors Emilia should consider.
  • Consider setting up an informal trust, where parents are the contributor and trustee, and Emilia is the beneficiary (receiving her funds at age 18). Read more at advisor.ca/informal.
  • Canada.ca has a financial literacy resource for teenagers developed by FCAC and the BCSC that could be a helpful starting point. Access it at bit.ly/teenfinancialeducation.

*In Latin America, the celebration of a girl’s 15th birthday marks her entry to adulthood. It can cost as much as a wedding.

Gil Martinez