When you have a client who is outside the financial loop, reassure them that taking an active role in household finances does not mean becoming an expert – it simply means becoming more involved and aware.
By Eileen Stoner, Financial Advisor
“I don’t even know what to ask!” I hear that statement with regularity from women as we talk matters of financial planning, retirement preparedness, and general financial decision making. Generational differences don’t seem to exist with respect to these topics as I’ve heard Baby Boomers, Gen Xers, and Millennials all use this exact phrase.
As professionals, we can understand how this presents a problem against data that shows 8 out of 10 women will be solely responsible for their financial well-being at some point during their lives.¹
UBS Wealth Management USA published a whitepaper report on April 13th, 2018 detailing reasons why women abdicate their roles in family financial decision making. According to their research, the reasons vary but can be drilled down to a few factors: persistent gender roles in the family, men’s status as the primary breadwinner, and time constraints for busy women.²
The report suggests that “Together, history and society have conspired to affect women’s financial confidence. Both women and men think men know more about investing, and women are less confident than men in making major financial decisions. Women consistently underestimate their own abilities while overestimating what is required to be financially involved. In reality, taking an active role in household finances does not mean becoming an expert – it simply means becoming more involved and aware.”²
Empowering a Client Who is Outside the Financial Loop
How do we move the needle towards “more involved and more aware” to bring women into the financial loop? In our practice, we work with couples, singles, men and women alike. It is among the population of women who seek us out because of divorce or death we see the greatest need for financial education and support. According to the UBS study, 59% of widows and divorcees wish they had been more involved in long-term financial decisions. Further, a full 98% of them urge other women to become more involved early on.²
To facilitate improved financial understanding, it is most important for financial professionals to be plain-spoken, avoiding jargon. We take pains to use the terminology of common conversation as much as possible. Ideally, these conversations that help women to become more financially informed/empowered take place within a series of meetings held over a period of months. We’ve found that the stress experienced during separation, divorce or death can be a significant impediment to one’s capacity to absorb new information and/or to manage financial decision making. Clients verbalize better understanding when we focus on specific topics one at a time and when we limit sessions to 1 hour each.
Take a “Go-Slow” Approach to Financial Education
To enhance understanding and retention of financial detail we suggest scheduling separate meetings to address specific concepts. The topics vary slightly but generally could include:
- Spending well (the budget)
- Saving well (the investments)
- Planning well (analysis of future goals)
- Leaving a legacy (updating the estate planning strategies).
We encourage a go-slow approach so the client could be brought into the financial loop, encouraged to gain knowledge and feel good about their increasing understanding and involvement.
Besides being sensitive to allow them enough time to “own” the new knowledge, some topics are just still too painful for them to tackle, and some days are just too tough for a meeting to take place. If a client pushes back on the meeting schedule, downshift as necessary. We suggest financial professionals consider using software tools to enhance success in staying on track with planned client tasks so nothing is overlooked. These tools can provide flexibility for the timing and sequence of educational meetings or important tasks that must be completed. I believe this can add enhance the value provided in the client relationship by customizing the curriculum, especially for a spouse who has been out of the financial loop. Using such software, various action item schedules could be designed with the specific needs of a widow, divorcee or any unique client group in mind.
While we are diligent in getting the tasks completed, as professionals we need to be sensitive to the softer side of financial learning; with the goal being to help our clients to be more empowered. As such, the timetable can be more relaxed with no need to wrap everything up by a certain date.
How Can Trusted Family Attorneys Help a Client Who is Outside the Financial Loop?
Consider centers of influence in the financial arena. In cases of separation/divorce, Certified Divorce Financial Analyst ® professionals can help clients develop a realistic picture of their financial situation. A CDFA® professional can help provide the advice necessary to cover all”bases” as women transition into their next chapter of financial life.
While everyone is good at something, financial decisions can be complex. It can be helpful when considering difficult challenges our clients face to remember that it is not necessary for most people to be financial experts. Consider instead that they simply need to be more involved and aware, step by step. They don’t have to go it alone. Take a deep breath; it’s a process, not a destination.
Eileen Stoner is a Financial Advisor with UBS Financial Services Inc. a subsidiary of UBS AG. Member FINRA/SIPC in 16810 Kenton Drive, Huntersville, NC 28078 and is a Chartered Retirement Planning Counselor and Certified Divorce Financial Analyst®.
¹National Vital Statistics Reports, Vol. 66, No. 6, November 27, 2017
²“Own Your Worth”, UBS Wealth Management USA whitepaper report April 13, 2018; full report available upon request
*The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. Investing involves risks and there is always the potential of losing money when you invest. The views expressed herein are those of the author and may not necessarily reflect the views of UBS Financial Services Inc. Neither UBS Financial Services Inc. nor its employees (including its Financial Advisors) provide tax or legal advice. You should consult with your legal counsel and/or your accountant or tax professional regarding the legal or tax implications of a particular suggestion, strategy or investment, including any estate planning strategies, before you invest or implement. In providing wealth management services to clients, we offer both investment advisory and brokerage services which are separate and distinct and differ in material ways. For information, including the different laws and contracts that govern, visit ubs.com/workingwithus. For designation disclosures visit www.ubs.com/us/en/designation-disclosures
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