Like Marriage, Financial Planning Is a Team Sport
By June 29, 2016 0 698•
This month, it is hard to walk down Georgetown’s cobblestone streets and not run into a blushing bride or a handsome groom. That’s why we call June wedding season.
Over my three decades as a financial advisor, I have seen hundreds of these loving couples walk into my office at all ages and stages in life.
But when someone walks in alone and says, “My spouse doesn’t care about all that financial stuff. She [or he] lets me handle it,” I immediately cringe. All too often, in seeking to protect his or her partner or heirs from money worries, a spouse who is the boss of family finances only causes financial grief — or, worse, marital problems.
Three of the top ten causes for divorce are: changing roles in life, not having a shared vision of success and finances. Is this surprising? If you don’t have the same idea of what constitutes success, financial or otherwise, it’s hard to plan for your future together.
The problem is only exacerbated when the “money spouse” dies first and the surviving spouse meets the financial advisor for the first time — in an emotional state and clueless about the couple’s affairs. With automatic bill-paying, many spouses can’t even say which account pays which bills. This is a petri dish for financial disaster.
When a newly widowed spouse first meets with the financial advisor, he or she is likely to be anxious, afraid of being hoodwinked or repeating advice from well-meaning friends. This often leads to costly mistakes.
That’s why financial planning should be a team sport. Both partners should be involved in the plan with the advisor from day one. In some instances, so should children. That way, everyone is on the same page.
New or prospective clients who show up for a first meeting with me typically arrive clutching a folder bulging with financial records. I tell them, “Put away the account statements and tax returns, and let’s talk first. I want to get to know you.”
The first few meetings are about their lives, not their money. Before I crunch numbers, I want to know the role of money in their lives, and what they want their life to be like — their priorities and their goals. I want to know the life they’d like to be living, together in retirement and individually as the survivor.
Each spouse may have a very different background, shaping what he or she wants financially. One may have lived in the same house for 40 years and can’t wait to see the world. Another may have spent an entire career traveling and wants to retire, never setting foot on another airplane. It’s never just about the amount of money.
When you get married, you make a vow for richer or for poorer, in sickness and in health. So make sure to find a financial advisor that, for richer or for poorer, in sickness and in health, will become a member of your team.