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Forgive the ominous opening tone – things get better from here – but death is a certainty and the unfortunate reality is large percentage of marriages don’t “go all the way.”
That is to say, on a daily basis, advisors are working with clients that recently endured a death in the family and/or are dealing with divorce. Speaking of dissolved marriages, advisors know, the money issues between couples have been around, seemingly, forever and that’s not going to change. In fact, and this is compelling for advisors, some generations take money matters more seriously and can be more easily scorned by these issues than others.
Something for advisors to consider is the fact that, in the cases of either death or divorce, there’s likely opportunity to further enhance relationships with female clients. The fact is women live longer than men, meaning there are a variety of estate planning issues to address when a husband dies. Likewise, more and more female clients want to take charge of their financial futures and wanted the related guidance, particularly following divorce.
Why Advisors Are Need in Both Circumstances
In either case, death and divorce are emotionally trying. As such, clients may not be up to meeting with an advisor and talking finance. Certainly not soon after these events. However, leveraging soft skills, advisors should, after an appropriate amount of time, reach out to clients in these situations.
Consider the following advice Morgan Stanley has for clients:
“Depending on the complexities of your situation and your financial savvy, you may want to seek out several professionals, including an attorney, tax professional and Financial Advisor. Because you don't know what you don't know, getting the right advice is critical in the early stages of a transition. A common mistake is to delay financial planning until after a divorce is final or the estate is settled. You want to understand what you're up against financially before you agree to anything.”
In the same piece, Morgan Stanley warns clients that are going through spousal death or divorce about advisors that immediately try to sell them insurance or investment products. That’s probably something advisors ought to pay attention. Don’t look at the vulnerable as fee generators.
Advisors can certainly add value to clients in these situations in myriad other ways – plenty of which are sure to be appreciated by clients. Organization is a basic though necessary starting point.
“A Financial Advisor can walk you through all the steps you need to take to get organized, but you can facilitate the process by tracking down key documents, including: recent brokerage and bank statements, life and health insurance policies, recent tax returns, loan documents, and Social Security statements,” adds Morgan Stanley.
Diligence, Patience Required
Following death or divorce, diligence and patience is required on behalf of both advisors and clients. In some cases, an advisor can add value simply by helping the client to not make any rash decisions, such as significant liquidation of assets or exorbitant purchase.
After some time, clients will need and expect a firm financial plan for moving onto the next phase of their lives and that’s more opportunity for advisors to deliver.
“The same is true of coming up with a financial plan. A good Financial Advisor will take their time building a solid foundation than rush and create a plan that is unrealistic. You want to start the planning process as soon as you can, but you may not have all the answers right away, and that's to be expected,” concludes Morgan Stanley.