No Heirs, No Problem. Why Childfree Clients Are a 60 Million-Person Opportunity

Some 60 million US adults identify as childfree, according to the National Institutes of Health, meaning they don’t have children and don’t intend to.

It’s a massive marketplace of advice-seekers with significant wealth and unique needs, said Jay Zigmont, founder of the specialist RIA Childfree Wealth. Few financial advisors focus on this niche, however, and many simply serve childfree adults as an extension of their normal intergenerational approach. That can result in suboptimal outcomes, Zigmont said, especially in the critical areas of retirement, long-term care and legacy planning. It can also leave advisors looking out of touch. 

“Many traditional financial planners find themselves kind of stealing client households from other advisors, and almost trading them back and forth,” Zigmont said. “Our business is totally different. Upwards of 80% of our prospects, who actually pay a consultation fee to engage with us for an introductory wealth checkup, have never worked with an advisor before.” 

Unique Planning Challenges 

Childfree adults have a different lifestyle compared with parents, Zigmont said, so it’s natural their financial situations look different: 

• Very few care about how much money they’ll leave behind after death. 
• Many worry (a lot) about long-term care in case of illness or accidents, so the firm gets power-of-attorney arrangements in place by the time clients are in their mid-40s. 

“It’s very normal for folks in the child-free world to have a much more dynamic life, which needs to be reflected in their financial plans,” Zigmont said. “They change jobs more frequently. They move more frequently. For those who are wealthy and charitably inclined, we work with them to give a lot away while they are alive. They enjoy seeing the impact.”

Bryan Byrer, founder of Millennial Financial Planning, likewise serves a growing number of childfree adults, many of whom are “freaked out” about the long-term care question. “Traditional long-term care policies are really expensive and they might not have the best features,” Byrer said. “We’re putting a bigger focus on life insurance policies with a long-term care rider on top. These are a lot more palatable for clients.”

Tweak the Tech. Financial planning software is generally designed to leave some kind of legacy that may not match a childless person’s goals, warned Lisa Kirchenbauer, founder of Omega Wealth Management. It also tends to project lower safe spending amounts than a childless couple can afford in retirement. Another big question: Who will help manage their affairs after they’re gone? 

“The obvious answer of adult children doesn’t work,” Kirchenbauer said. “Currently, I’m serving as power of attorney to a client who has absolutely no family. I am having to make financial decisions for this client as she has dementia and requires 24/7 care at home. We have donated significant amounts to charity, but we have no idea how long she is going to live, and care costs are expensive. We have to manage that.”