Advising clients on family support: Balancing obligation and financial security

For many South Africans, supporting extended family is a deeply rooted cultural responsibility – one that reflects love, respect, and duty. Often referred to as “Black Tax,” it’s not just a financial transaction but an emotional and social obligation. Yet for many clients, the challenge lies in balancing this ongoing support with their own financial stability and long-term goals.

As a financial adviser, you play a vital role in helping clients honour these commitments without compromising their own financial futures. The goal isn’t to end the support – it’s to structure it intelligently, with clear boundaries, sustainability, and foresight.

1. Help clients establish a “support budget”

Encourage clients to treat family support as a defined financial goal rather than an open-ended expense.

• Ensure clients first prioritise non-negotiables such as insurance, emergency savings, and retirement contributions.
• Then, help them allocate a fixed monthly amount for family support — a “maximum commitment” that allows generosity without destabilising their own plan.

2. Guide conversations around need vs. want

Advisers can help clients distinguish between essential support (like medical aid or school fees) and non-essential assistance. Encourage clients to focus on high-impact support areas that align with their values, while setting healthy limits on ad-hoc financial requests.

3. Coach clients on communicating boundaries

One of the hardest parts of family support is emotional — not financial. As an adviser, you can coach clients on how to approach these conversations with empathy and clarity.

• Position the budget as a means to sustain long-term support, not withdraw it.
• Emphasise that a structured plan ensures they can continue to help family members for years to come.

4. Introduce the concept of “empowerment support”

Encourage clients to think beyond cash handouts. This could include contributing toward skills development, education, or small business support for family members who can work. Over time, this approach fosters self-sufficiency and reduces dependency – turning generosity into empowerment.

5. Ring-fence funds for family support

Recommend setting up a separate bank account or budgeting tool for extended family assistance. This helps clients maintain control and visibility, preventing emotional overspending or financial strain on their main accounts.

6. Link family support to long-term planning

A key conversation for advisers is connecting family support today with financial independence tomorrow.

• Reinforce that preserving retirement savings is the ultimate act of care — ensuring they never become a financial burden to their children.
• Guide clients on maximising contributions to retirement annuities, pension, or provident funds.
• Highlight how proactive estate planning — including a valid will and, where appropriate, a trust — protects their immediate family from potential claims or disputes.

7. Use scenario modelling to demonstrate trade-offs

One of your most powerful tools is visualisation. Show clients how different levels of family support affect their long-term goals, such as retirement age or lifestyle sustainability. This gives context and helps clients make informed, guilt-free decisions.

8. Be the objective voice

Family support is an emotional issue that can easily lead to guilt or pressure. Advisers provide crucial objectivity — balancing empathy with strategy. By helping clients set realistic boundaries and create protective financial structures, you empower them to care for others without sacrificing their own wellbeing.

The bottom line

True financial love is foresight. Helping clients secure their own future is the surest way to protect the generations that follow. By combining empathy, structure, and sound financial planning, advisers can turn “Black Tax” from a source of strain into a framework for empowerment and intergenerational progress.