Rich Parents Worry About Kids’ Values
For many Americans, child-care worries start with day care and end with paying for a college education. For the richest among us, they can include whether to set up a brokerage account for the kids.
According to a poll released Wednesday by New York-based US Trust Co., the wealthiest parents in the U.S. worry that their offspring suffer from what it calls “affluenza.” That’s when children of wealthy parents have such a luxurious, pressure-free upbringing that it distorts their values and robs them of initiative.
The survey polled Americans whose wealth placed them in the the top 1% and found that two-thirds worry that their children “will place too much emphasis on material possessions” and “will be naive about the value of money and how hard it is to earn.”
To fix that, 89% of parents polled said they set up savings accounts for their children and keep them on an allowance. Two-thirds polled said they help them set up a budget for their personal expenses. About half of the parents arranged checking and brokerage accounts for them.
“Affluent parents keep a pretty tight rein on their children financially,” said Jeffrey Maurer, president and chief operating officer of US Trust. “They do not entrust them with large amounts of money and they expect them to pitch in and help at an early age.”
That translates to “appropriate” weekly allowances of $7 for an 8-year-old, $9 for a 12-year-old, $17 for a 16-year-old and $41 for a college student, the survey found. Some of the respondents said a child should no longer receive an allowance past age 19. Others said a child in graduate school should have an allowance of $36 a week.
US Trust, which manages $50 billion of customers’ assets, launched the survey as a client service. “The affluent American is our group and we cater to them,” Maurer said. “We are concerned about how we as an institution can help them.”
US Trust has explored customers’ wealth in previous surveys dealing with such issues as the roots of their affluence, and their financial worries, investment patterns and retirement and estate planning. The company works with New York-based Financial Market Research to do the polling.
The survey was based on telephone interviews with 151 people who earn at least $200,000 a year or have a net worth of more than $3 million. It has a margin of error of plus or minus 6 percentage points.
