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Family Financial Talk is More Important in Challenging Times, Say Wachovia Securities’ Experts


Even among loved ones, privacy and embarrassment prevent sharing of financial information, survey finds

ST. LOUIS, MO — This year, families gathering during the upcoming holiday season may be more concerned and focused on their financial future than ever before. And a tough challenge they could face is how to talk with each other about financial matters, what questions to ask and what pitfalls to avoid.

A national survey sponsored by Wachovia Securities, LLC has found that when families gather for the holidays they are more likely to talk about politics, sports or what’s on TV than long-term financial matters.

Only three of 10 respondents to the survey, conducted by Richard Day Research Inc., acknowledge ever having discussed financial plans at a regular family gathering or at a meeting called for that purpose, but nearly two thirds believe that their family is aware of their preferences regarding finances. There is peril in that assumption, said Brian D. Carpenter, Ph.D., associate professor of psychology at Washington University in St. Louis.

“Family members often assume they know about each other’s financial situation and preferences,” Carpenter said. “But then some crisis arises in the family, and people realize they don’t know as much as they thought. Or what they thought they knew turns out to be inaccurate. Rather than relying on assumptions, families benefit from talking with each other about their circumstances and sharing important documents.”

People who communicate about money with family members have distinct advantages, Carpenter noted. “Families that know about each other’s financial status, life goals, priorities and desires tend to be better prepared to make informed, rational decisions during a crisis or major life event.”

The survey of 1,200 American ages 25 and older revealed:

* Privacy and embarrassment are two key factors preventing family members from having conversations about money and financial planning.
* Nearly four in 10 said that finances are private, even among family.
* Social and financial differences among family members also inhibit financial conversation, and lack of financial know-how also appears to be a barrier.
* There were minor differences in responses along demographic lines. More affluent and college educated respondents were slightly more likely to talk to families about finances. Women indicated more hesitancy regarding family financial talk than men.
* Of the survey respondents who reported having participated in a family financial discussion within five years, only a quarter said the meeting had occurred without the impetus of a major life event.
* The most common occurrences prompting family financial conversations were job or business transition, illness or major surgery, death of a family member, or preparation of a living will or estate plan.

Kortney Christensen, director of Life Event Services at Wachovia Securities, said, “Particularly during these volatile economic times, dialogues about changes in life plans and financial status-or even a conscious decision to change nothing and ride out the present upheaval-can help make everyone in the family better informed and more secure.”

Christensen, CPA and CFP©, manages a group that assists financial advisors and their clients on issues such as Social Security, executive compensation, tax planning, estate planning, and education planning. “Family financial talk can strengthen relationships, bring peace of mind, and ensure more positive outcomes,” she added.

The Web site and a 54-page booklet-“Talking with Loved Ones about Money ... A Financial Guide”-available on the site provide help on how to begin the family conversation, topics to discuss and preparations for talks .

The Web site, sponsored by Wachovia Securities, includes tips and examples to guide families before, during, and after the money conversation, as well as key topics to consider. The booklet includes chapters on Talking with Adult Children about Your Finances, Talking to Adult Children about Their Finances, Talking with Elders about Their Finances, as well as a helpful resource guide.

About Brian Carpenter
Brian Carpenter, Ph.D., is an associate professor of psychology at Washington University in St. Louis. He has focused his research on family relationships in late life, with an emphasis on how family members work together to make decisions. Other studies have examined how well adult children know what their older parents want. As such, his work inevitably brushes up against financial issues and preparations.

About Richard Day Research
Richard Day Research is a leading full-service market research and opinion polling firm headquartered in Evanston, Illinois. The company serves corporate, government and not-for-profit information needs in the U.S. and globally.

About Wachovia Securities
One of the nation’s largest full service retail brokerage firms with $1 trillion in client assets, Wachovia Securities provides financial advisory, brokerage, asset management and other financial services through more than 18,000 registered representatives in over 4,000 locations nationwide.* Wachovia Securities is the trade name used by two separate, registered broker-dealers and non-bank affiliates of Wachovia Corporation providing certain retail securities brokerage services: Wachovia Securities, LLC, member SIPC, and Wachovia Securities Financial Network, LLC, member SIPC.

*As of 9/30/2008. Assets, registered representatives and locations include Wachovia Securities and A.G. Edwards brokerage offices as well as selected Wachovia Bank financial centers. A.G. Edwards is a division of Wachovia Securities, LLC.


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