What’s the key to dealing with a client’s bitter divorce? Keep the emotion out of it and get the full picture.
That’s the view of Wilkie Kam, vice president and senior investment advisor at BMO Nesbitt Burns, who said advisors must stay calm and ask the important questions, including the big one: whether they couple had a prenuptial agreement in place.
In many ways, Kam said a combative separation is harder to unpick financially than when someone has suffered bereavement. He recalls one situation that initially left him powerless.
He said: “If there is a nasty divorce, and they have joint accounts, they have to freeze them as well as their credit cards.
“I’ve had instances where the partner that’s leaving the relationship went crazy on their credit card. Apart from advising the client to stop the card and advise them to let the bank know to freeze the bank accounts, there’s not much you can do.
“Of course, there’s the usual stuff, the kids, the assets and the expenses and the liabilities because one party can just leave but both parties can suffer, especially with their credit score.”
Kam said advisors have to calm their clients down to find out the full financial picture. The danger, he said, is that finance professionals are too pushy and accept it may take more than a couple of meetings to get all the answers you need.
For a less experienced advisor this can be intimidating, he said, but added that it’s vital to ask the tough questions and get the job done.
He said: “When one party passes away there is not the danger of one side messing up the credit of the other because the other one won’t be using it.
“Financially, understanding the whole picture is of the utmost importance in this area. Not to be too pushy and be understanding to help them overcome these issues is very important.
“But a lot of the time the grief and uncertainty is on finances. And once you can assure your client that the finances will be taken care of properly then it usually helps a lot through the process as well.
“Sometimes, I remember when I first started 20-odd years ago, sometimes the advisor can get a little bit apprehensive about talking to clients about this. It’s very important to keep separated from the emotions of the client, be calm and to get the questions answered. It’s also very important to know the full picture rather than guiding the clients blindly.”
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