Urgent Check: 6 Urgent Checks for Your Child’s Investments
When it comes to setting kids up for financial success, early investing is a powerful tool. But simply opening a custodial account or stashing money into a 529 plan isn’t enough. Markets change, fees shift, and your child’s goals evolve—so it’s critical to regularly check in on those investments. Whether you’re saving for college, their first car, or long-term growth, your child’s portfolio needs more than a “set it and forget it” approach. If it’s been a while since you reviewed their account, here are six urgent checks for your child’s investments to make sure their money is working as hard as it should.
1. Review the Current Investment Allocation
Start by checking how your child’s investments are currently allocated between stocks, bonds, mutual funds, or other assets. Many custodial accounts are set up with an initial allocation, but those percentages may need adjusting as your child ages or as market conditions shift. If your child is very young, a higher stock allocation might make sense for growth, while older teens may need a more conservative mix. Make sure the balance reflects their time horizon and financial goals. An outdated allocation could expose the account to unnecessary risk or limit long-term growth.
2. Check Fees and Fund Performance
Some of the biggest drains on your child’s investments are the fees hiding in plain sight. Whether it’s management fees, trading costs, or expense ratios from mutual funds or ETFs, these charges can quietly chip away at returns. Compare the fees of current investments with low-cost alternatives and check how each fund or stock has performed over time. Even a small percentage saved in fees can make a big difference over 10 or 15 years. Make it a habit to review these details at least once a year.
3. Update Contribution Plans and Goals
If you set up a monthly transfer or automatic deposit into the investment account, it’s time to revisit that amount. Has your financial situation changed? Has your child’s timeline or goal shifted—say, from college savings to something more flexible? Adjust the contribution amount as needed and make sure you’re on track to meet the goals you originally outlined. Even modest increases in regular contributions can dramatically improve the final outcome for your child’s investments.
4. Rebalance Based on Market Changes
Market performance can cause an unintentional imbalance in your child’s portfolio. For example, if stocks have done especially well, they may now make up too much of the total investment, increasing risk. Rebalancing means selling some assets and buying others to bring everything back in line with your original plan. It’s a way to stay disciplined and avoid letting emotions drive investment choices. A yearly rebalance is a smart, simple move to protect long-term gains.
5. Review Tax Implications and Account Type
Your child’s investments may have tax consequences, especially if held in a UGMA/UTMA account or other taxable account. Take time to review how dividends, interest, or capital gains might impact your family’s tax return. Depending on your goals, switching to or supplementing with a tax-advantaged account like a 529 plan or Roth IRA for Kids (if eligible) might make sense. It’s also wise to revisit beneficiary information and ownership to avoid future confusion or missed opportunities. Talking with a financial advisor or tax professional can bring helpful clarity here.
6. Make Sure It’s Still Aligned with Your Values
Beyond numbers, ask yourself whether your child’s portfolio still reflects your family’s values and priorities. Some parents prioritize socially responsible or ESG (environmental, social, and governance) investments. Others want to focus on stability or industries that align with their beliefs. If you’re using a robo-advisor, explore the available filters or switch to one that allows for more control over those choices. As kids grow, including them in these conversations is a great way to build money confidence and awareness.
Keeping Your Child’s Financial Future on Track Starts Now
Your child’s investments aren’t just numbers on a screen—they represent opportunity, freedom, and a head start in life. But staying hands-off for too long can turn a promising plan into a missed chance. With these urgent checks for your child’s investments, you can course-correct, improve performance, and teach your child what it means to be a smart steward of money. This is your chance to set them up not just for financial success, but for lifelong financial literacy.
Have you reviewed your child’s investments recently? What’s one thing you’d add to this checklist? Let us know in the comments!
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