Planning for a full house — With financial advisor Alex Chan

Kids grow up, graduate from school, leave home, get married, have kids of their own — it’s what many of us think is the natural order of things. But in some cultures, the “leave home” part of the equation is often left out. In some ethnic groups, it’s a given that parents and grandparents will move in with the younger generation or that adult children and their own spouses and children will remain at home with the older generation.

It adds up to a full house — and a unique set of financial and protection needs.

Alex Chan understands this dynamic well. Chan is an advisor with Northwestern Mutual in Allen, Texas, a northern suburb in the Dallas-Fort Worth metroplex. A first-generation American, Chan serves many Asian American clients and multigenerational households.

Chan’s mother was born in China and grew up in Guangzhou, a small town outside of Hong Kong. She often told Chan stories how she worked and took care of her younger brother while her mother lived and worked in a different city. In 1993, the family moved to the U.S. 

“They said, ‘We’re going to make life work here,’” Chan said. They lived in New York and then California before settling in the Houston area.

Chan’s love of cars led to his becoming a mechanical engineering student at the University of Texas at Dallas. His habit of rising at 5:30 a.m. each day caught the attention of a Northwestern Mutual advisor who attended the same church as Chan did. 

“He said, ‘I think you’d be great at this career; you seem to have some discipline in your life.’” 

Chan interned at Northwestern Mutual and soon abandoned his plans to become an engineer as he went on to study economics and finance. He continued his career with Northwestern Mutual after graduation.

“It was too great of an opportunity to pass up,” he said of the internship that led to the career he hadn’t originally planned on. “I like working with people, and I like hearing their stories.”

Chan started in the business at age 21 and has always worked with a young clientele. Now at age 30, he said his clients are close to his age or a little older. Between one-quarter and one-third of his clients are Asian American, and many of his clients are involved in insurance and financial planning for multiple generations.

His experience as a first-generation American helps him relate to many of his clients’ experiences and situations; for example, the expectations placed on the first generation.

“I think part of it is parental pressure, as far as making sure that I live up to my family’s expectations and honor my family — that’s a big thing,” he said. “Another part of it is not sacrificing the hopes, dreams and desires that they’ve placed on me as they moved from a different country to plant here and learn a new language and culture.”

Chan said that when he was growing up, his mother worked as a server in a restaurant. “Every dime that she had went to making sure the family was taken care of,” he said. “We weren’t thinking about Roth IRAs or retirement planning investments because to a degree my brothers and I became the retirement plan for my mom.”

The Asian community in the Dallas area is relatively small but is growing rapidly, the U.S. Census Bureau reports. Between 2000 and 2022, the number of Asian residents in the Dallas metro area increased to 665,000 — a gain of 224.6%. The overall population of the Dallas metro area grew to 8 million during that same time, an increase of 53.2%. Most of the Asian population comes from China, the Philippines and Vietnam. 

Chan said that although each ethnic group within the Asian community has its own culture, his Asian clients’ needs are mostly the same.

“I don’t think their needs are necessarily any different from those of any other group,” he said. “Asian clients are like other types of clients in that they like to work with someone who speaks a similar language and understands their culture.”

Chan said that more of his clients are planning for multiple generations of their families, and that planning can take different forms.

“In the Asian American and Pacific Islander community, there is a lot of discussion around everyone living in the same household,” he said. “A lot of the conversations we have and the stories I hear are similar to mine growing up as a first-generation American, where there are a certain respect and desire to make sure the family is taken care of. Being the oldest son adds an additional responsibility of making sure the household is taken care of.”

Chan said many of his clients who are planning for multiple generations are in the middle of taking care of their parents and raising their children. Other clients have children who are getting married and having their own children, so those clients are planning to set up their children and grandchildren for financial security. He understands the challenges those clients face in trying to protect their multigenerational families.

“A huge part of my job is to consider the story of where they came from,” he said. “If they’re anything similar to my parents, there’s this idea of ‘I moved from a different country and came to America for a better opportunity, to see my kids do better than I did.’ 

“There’s also a difference in culture, a difference in language to consider. And there’s also simply the idea of their trying to make life work.”

He recalled, as an 18-year-old intern in the insurance business, watching his parents figure out how to care for his grandparents as they were getting older.

“There’s a taboo around sending a family member to a nursing home,” he said. “I remember my family really struggling around how to plan for the future and make sure everyone would be OK on a day-to-day basis without jeopardizing their financial situation.”

When helping clients plan for multiple generations, Chan said every situation is different.

“We typically begin the conversation with where they’re coming from and where they want to go. From there, we develop a road map to put in place things to cover long-term care for family members, to do generational planning and estate planning. For clients who have a growing family, we have a conversation about how we protect your income if something were to happen to you. Do you have an estate plan? Do you have life insurance? We discuss ways to pay for the children’s education. How do clients juggle the needs of both generations while not sacrificing their own retirement?”

Generational planning is not one size fits all, Chan said.

“We work with many clients whose children are about to graduate from college and who are starting their own families. It’s an interesting balance between the parents and these children who are starting out, where we ask how do we plan so your kids can start flourishing as they start their own families, yet we make sure you don’t run out of money?”

Chan said that he often thinks of how his mother was diligent about saving as much money as she could from her earnings at the restaurant when she was new to the U.S. But he said he wants to emphasize to clients that financial planning for their families is about more than putting money into savings.

“I think advisors should encourage families to do thoughtful planning and consider how the family dynamic plays a role in how family members approach planning and saving,” he said. “I think sometimes clients believe ‘We’re just going to stick with what we know.’ I remember conversations with my mom that included this thought of ‘If you could just save, save, save and set aside money in cash, that would be great for a rainy day.’ But we need to think about how we can make those dollars more efficient, and how we can be thoughtful and intentional about our approach to saving and investing.”

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].