Networking up the Family Tree: Helping the Sandwich Generation Can Help Your Practice Thrive

Networking up the Family Tree: Helping the Sandwich Generation Can Help Your Practice Thrive

As you help your clients plan for retirement, there are multiple challenges that can threaten their ability to reach their financial goals. The expense of raising children certainly ranks near the top, but when caring for aging parents is added to the mix, clients who are juggling the responsibilities of careers, college-bound teenagers, and parents in their 70s and 80s can feel like they’re bearing the weight of the world on their shoulders. It’s no wonder they’re called the “sandwich generation.” It’s a confluence of events that can be immensely draining—both emotionally and financially.

For financial advisors, this presents a unique opportunity to help everyone involved. By lending a hand during this challenging time, you can help your existing clients preserve and protect their hard-earned retirement savings. At the same time, you can help the older generation manage the details of their estate to help ensure their own assets last for the rest of their lives and ease the transfer of wealth to their children after death. Here are five steps to help expand your practice across generations:

1. Offer emotional support.

Growing older is inevitable, but it can be difficult to accept the fact that parents are aging. They may feel sad, helpless, and overwhelmed by the responsibilities of caring for Mom and Dad. Because this added burden often comes just as couples are becoming empty-nesters, they may also feel some level of guilt for not wanting to have to take on this added responsibility. Talk though these feelings and be willing to share your experiences with your own parents. Assure your clients that whatever feelings may come up are normal—and that planning for the inevitable can help ease the road ahead.

2. Introduce the need for multi-generational planning.

Open the door to the idea of multi-generational planning by asking clients if they’ve spoken to their parents about the legal, medical, and financial issues that come with aging. Discuss how a lack of planning on their parents’ part can impact their own plans for the future. Walk through some basic scenarios, including what would happen to their long-term financial security if their parents fail to plan for the inevitable. Suggest that your clients broach the topic with their parents and offer the guide Your aging parents and you to support the conversation.

Related: Worried About Wealth Transfer? It's Time for the Human Touch

3. Become a valuable resource to the whole family.

Not all of the challenges of aging are financial, but nearly all of them have the power to impact the finances of the entire family. Rather than focusing solely on dollars and cents, offer to help your clients and their parents understand how to plan for the future. Suggest sitting down with their parents for an hour at no charge to explore what plans are in place and identify what tasks need to be handled next. Walk through housing options and costs, healthcare expenses and payment strategies, and the importance of having a Durable Power of Attorney and Healthcare Power of Attorney in place before an event occurs that requires either one. Lastly, share how a lack of planning can create emotional stress and the potential for financial difficulties for their adult children in the future.

4. Suggest a formal financial planning relationship.

If the parents do need additional help, talk to them about how your financial planning services can make a difference—even at this late stage. For most seniors, outliving their assets is their biggest fear, and yet many don’t have a clear retirement income strategy or a plan to tax-efficiently transfer their wealth to their children and grandchildren. Discuss how careful planning can help address both challenges, and offer to work together with both generations to create a clear plan that includes income planning, legacy planning, beneficiary designations, estate planning, long-term care planning, and asset management.

5. Prepare to “serve two masters.”

Once your new client relationship is in place, you will inevitably be faced with serving two masters: your younger clients and their parents. Until the time that a Durable Power of Attorney is executed, confidentiality is key, and you will need to walk this line carefully. To serve both generations to the best of your abilities while also honoring your confidentiality agreements with each party, be clear about which details can be shared—and have that permission granted in writing. To facilitate decisions that will impact everyone involved, suggest family planning meetings. This approach can help you offer valuable guidance without putting either client relationship at risk.

Related: Your Clients Need More Than a Robo-Advisor!

As your clients’ trusted advisor, protecting their wealth is your primary responsibility. For clients in the sandwich generation, this can be a unique challenge. By offering to help your clients’ parents take control of their own finances, you can help reduce the financial and emotional impact of aging for the whole family. Not only can this approach help you build even greater client trust, but it can also expand your reach across generations and, perhaps most importantly, ensure that the wealth of the whole family is protected and under your care for years to come.

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Disclosure: The information and opinions herein are for general information use only. The opinions reflect those of the writers but not necessarily those of New York Life Investment Management LLC (NYLIM). NYLIM does not guarantee their accuracy or completeness, nor does New York Life Investment Management LLC assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice and are not intended as an offer or solicitation with respect to the purchase or sale of any security or as personalized investment advice.
Laura McCarron
Building Smarter Portfolios
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Laura joined New York Life & MainStay Investments in 2009, and is currently the Director of Value Add Marketing. She is responsible for the development of investor educati ... Click for full bio

An Emerging Theme In Thematic Investing

An Emerging Theme In Thematic Investing

Exchange traded funds (ETFs) are popular vehicles for market participants looking to engage in thematic investing. Thematic investing looks to take advantage of future growth trends, including disruptive technologies. Given that forward-looking approach, stock-picking in the thematic universe is equally as hard, if not harder, than in traditional market segments.

Go back to the late 1990s, before the bursting of the Internet/technology bubble. Back then, investors stood an equal chance of selecting E-Toys over Amazon or some no longer in existence networking equipment maker over Cisco.

“History is littered with examples of prospering industries with no indication of which company will come to dominate the industry,” according to Nasdaq. “This suggests that successful thematic investing is more about selecting baskets of investments rather than single securities.”1

The ALPS Disruptive Technologies ETF (DTEC) provides basket exposure to a broad swath of thematic investments. DTEC features exposure to not just one or two emerging technologies, but 10 such themes on an equal-weight basis.

Disruptive Efficiency

The 10 themes represented in DTEC are as follows: 3D printing, clean energy, cloud computing, cybersecurity, data and analytics, fintech, healthcare innovation, Internet of Things (IoT), mobile payments and robotics and artificial intelligence (AI).

Generally speaking, fund issuers have been quick to respond to disruptive and transformative technologies, bringing products to market to tap these themes. Prior to DTEC coming to market late last year, there were ETFs devoted exclusively to cloud computing, cybersecurity, robotics and other themes featured in DTEC. However, few use the basket approach to themes employed by DTEC.

Related: Getting Paid to Play The Energy Patch

February, a rough month for U.S. stocks, highlighted the advantages of DTEC's multi-theme methodology. Seven of the 10 themes found in the fund finished the month lower, but DTEC was able to outperform the S&P 500 on a monthly basis.

Focusing on individual themes can be rewarding over the long-term, but not all investors have the risk tolerance for such a strategy. Consider this: the Indxx Global Robotics & Artificial Intelligence Thematic Index jumped more than 48% in 2017. That type of performance is enough to seduce many investors, but that same benchmark slipped 7.60% in February, generating monthly volatility of 34.10%.Said another way, that robotics and AI index's February slide was more than triple the loss experienced by DTEC during the month.

More Advantages

While it probably is not accurate to call the indexes devoted to individual disruptive themes “old,” many use old school weighting methodologies. For example, the two largest components in the ISE Cloud Computing Index are Netflix, Inc. (NFLX) and Inc. (AMZN). Only two members of the S&P 500 have larger market values than Amazon while Netflix currently has a larger market cap than Wal-Mart (WMT) and McDonald's (MCD).

Holdings subject ot change as of 12/31/17

For its part, DTEC not only equally weights its 10 disruptive themes, but its 100 components as well, potentially reducing single stock risk in the process. As the chart below confirms, equally weighting stocks is rewarding across sectors and market capitalization segments.

Past performance does not guarantee future results

Annualized returns for the past 10 years show seven of the 11 S&P 500 sectors, when equally weighted, outperform cap-weighted equivalents, according to S&P. Three of those seven sectors – financial services, healthcare and technology – are prominent parts of DTEC's roster.

1 Source: Nasdaq Dec. 28, 2015

2 Source: ETF Replay data


An investor should consider the investment objectives, risks, charges and expenses carefully before investing. To obtain a prospectus which contain this and other information call 866.675.2639 or visit Read the prospectus carefully before investing.

An investment in the ALPS Disruptive Technologies ETF (DTEC) may be subject to substantially greater risk and volatility than investments in larger and more mature technology companies.

There is no assurance that the market developments and sector growth based upon the themes discussed in the article will come to pass.

ALPS Disruptive Technologies ETF shares are not individually redeemable. Investors buy and sell shares of the ALPS Disruptive Technologies ETF on a secondary market. Only market makers or “authorized participants” may trade directly with the Fund, typically in blocks of 50,000 shares.

ALPS Advisors, Inc. (AAI) has engaged IRIS Werks, LLC (IRIS) to produce analysis and commentary on ALPS-advised ETFs. IRIS currently has a compensated business relationship with AAI. AAI is not affiliated with IRIS.

The content and opinions expressed in this article are that of the author and not the views and opinions of AAI.  In addition, AAI assumes no responsibility to ensure the accuracy of the content written by the author.

There are risks involved with investing in ETFs including the loss of money. Additional information regarding the risks of this investment is available in the prospectus. Past Performance is not indicative of future results.

The fund is new and has limited operating history.

ALPS Portfolio Solutions Distributor, Inc. is the distributor for the ALPS Disruptive Technologies ETF. AAI is affiliated with ALPS Portfolio Solutions Distributor, Inc.

The author is not an investment professional and this article should not be considered investment advice. While the information and statistical data contained herein are based on sources believed to be reliable, the author takes no responsibility to ensure the accuracy of the content. Additionally, this article should not be relied on or be the basis for an investment decision. Information that is historical is not indicative of future results, and subject to change.

S&P 500®: A capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

S&P SmallCap 600®: A capitalization-weighted index that measures the small-cap segment of the U.S. equity market.

S&P MidCap 400®: A capitalization-weighted index that measures the mid-cap segment of the U.S. equity market.

Indxx Global Robotics & Artifical Intelligence Thematic Index: The Indxx Global Robotics & Artificial Intelligence Thematic Index is designed to track the performance of companies listed in developed markets that are expected to benefit from the increased adoption and utilization of robotics and Artificial Intelligence ("AI"), including companies involved in Industrial Robotics and Automation, Non-Industrial Robots, Artificial Intelligence and Unmanned Vehicles.

Tom Lydon
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IRIS Co-Founder and Editor and proprietor of Tom is a frequent contributor to major print, radio and television media including Forbes, The Wall Street Jou ... Click for full bio