Delores sat in the lawyer’s office with her son a few weeks after the death of her husband of 45 years. She was still consumed by her grief and her feelings of abandonment when he asked her if she had any idea of the financial situation she was in. She was at a complete loss because her husband had never shared any financial information with her. He had just told her she had nothing to worry about because he had a pension and some investments that would keep her very comfortable and able to live in their home for as long as she wanted. Her son said he had never had a substantive conversation with his father about their finances either.
Two weeks after meeting with their lawyer, Delores began getting things in the mail with nasty overtones about making payments or late fees would be charged. This was very upsetting to Delores because she knew Bob always made sure everything was paid on time. Delores had lingering fears that without someone in charge of all this, it would be one surprise after another. She had no great trust in the lawyer whose office did not return her calls, and she did not know their accountant’s name, so she could not call him. (For more from this author, see: 7 Things Widows Wished They Knew About Finances.)
Historically, more than 70% of widows leave their husband’s advisors within the first year after their death. Why would Delores do this? The reasons couldn’t be clearer: her ignorance and illiteracy about their finances cripples her ability to ask questions that could accelerate the process of returning to some sense of normalcy, the lawyer’s lack of engagement with her during her husband’s lifetime creates a wariness of this person in a very vulnerable time, and her inability to verbalize the fears to someone she hardly knows makes it difficult for the advisor to address her needs. So how do we create trust while there is time to do this?
Developing Trust With Both Clients Ahead of Time
First of all, the development of trust must begin while the primary contact is alive. It is difficult for a woman who is used to having all the finances handled by her husband to be included in the conversations and meetings with his advisors. If the advisor is not used to dealing with both members of the couple, then the advisor should work with someone who can bridge that gap. Annual meetings with both partners are vital to transferring the trust when one of them passes. If that surviving spouse is not interested in continuing the relationship, the advisor has no one to blame but him or herself. It should be the responsibility of the advisor to cultivate the relationship with both parties so that each party’s goals and interests are considered in the planning process. (For related reading, see: What Women Want From a Financial Advisor.)
If a lawyer is selected to process the will and move the assets to the beneficiaries of the estate, the lawyer become a functionary whose role will end once the estate is settled. On the other hand, if the lawyer is working with the accountant and financial advisor as a team, the relationship with the CPA and the CFP should survive the estate settlement and create goodwill for the entire advisory team.
Including Wives in Financial Conversations and Meetings
Secondly, the advisors must include the wife and invite her to all meetings so she participates in the conversation and feels free to ask for clarification if she does not understand something. Women have different goals and motivation for financial planning than men do. That is not to say they are mutually exclusive, but she is more responsive to planning for specific goals, like college education for grandchildren, a second home in retirement, or a desire to move to be closer to her children. He is more interested in accumulating $2,000,000 in the brokerage accounts or seeing the IRA reach $1,000,000. In our competitive culture, men are more motivated by specific financial targets to feel a sense of achievement than wanting the lifestyle goals. Knowing how to approach a woman’s more nurturing and goal-oriented side will help to strengthen that relationship with an advisor. (For related reading, see: Women and Investing: It's a Style Thing.)
And thirdly, the advisors must move away from using industry jargon, like “S&P 500” or “The Dow.” Most women don't know what this financial shorthand means and will shut down if that language dominates the conversation. Women are not stupid, so dumbing down a conversation doesn’t work either. It helps to check in every now and then in the meeting to see if women are following by asking questions, like, “Is there anything I can further clarify?” or, “Are you with me?” It is also helpful to ask her to repeat to you what she heard.
We’ve finally acknowledged that women need to be treated differently in a financial advisory relationship since our culture has misled them to believe all will be taken care of once their husbands pass. There are too many opportunities for the less scrupulous to benefit from this illiteracy. And the level of engagement of the advisors needs to be more accommodating to this very real state of affairs.
(For more from this author, see: Deciding Where to Live After Losing Your Spouse.)