Financial professionals must embrace role to help partners overcome barriers to openness and sharing
Decades ago, it might have been hard for couples to imagine not sharing a bank account. But today, things have changed. People’s perspective on their money has shifted and every couple is different. Recognizing this, Chris Turchansky, president and CEO of ATB Wealth at ATB Financial, said there is still one piece of financial-planning advice that remains the same.
“We don’t believe that there’s a one-size-fits-all, but we do think couples, whether they’re spouses or partners, should spend time having conversations about their finances,” he told Wealth Professional. “Whether they have joint bank accounts and joint investment accounts or keep their assets separate isn’t the point; what’s more important is to talk about and be open with each other about money.”
A recent survey of Albertans conducted by ATB shows the range of financial arrangements among partners. In a section covering married, common-law, divorced, and widowed individuals, the poll uncovered different degrees of financial sharing ranging from sharing everything to keeping everything completely separate. Overall, 45% of respondents reported sharing all their finances, with members of the boomer generation driving the trend.
“I think the finding that older couples tend to share is inline with the traditional way to view things; you’d get married, then you share bank accounts, investments — everything,” Turchansky said.
Among baby boomers, “everything” includes information about their finances. According to the survey, boomers who are married or common-law spouses are more likely to say they’re familiar with their spouse’s finances, and that their spouse is familiar with theirs, than millennials or generation Xers.
“I think it has to do with the stage of life as it relates to financial sharing,” Turchansky said. “At this point, boomers have been with their spouses for decades, and it’s likely that they’ve developed a level of familiarity and comfort that allows them to share more compared to couples who are in earlier phases of their lives together.”
As couples move into different life stages—buying a shared home, for example—their finances may become more intermingled. However, not all of them have had conversations about money with their parents. The fallout, notably among millennials, tends to be an awkwardness or helplessness which makes it more difficult to effectively plan and share financial information with their own partners.
“Depending on what survey you look at, money and challenges with money and investing tend to be among the top three causes of divorce and separation,” Turchansky said. “And in our view, financial advisors can play a huge role in mitigating that emotional stress on people’s lives.”
Some couples are already seeking advice. According to the survey, 37% of married or common-law Albertans share a financial advisor with their spouse, while 10% have their own. Practically speaking, being open and transparent with finances is easier for couples who share one financial advisor, but that can give rise to another challenge.
“One of the perils comes when someone in the relationship plays a dominant role, and the advice tends to be given to the more dominant person,” Turchansky said. “Recognizing that advising a couple means advising both partners, I think, is one area where we as an industry have room to grow.”
Advisors also have to recognize their role as facilitators, which is important for two reasons. Because money is an emotional topic, people tend to push difficult conversations to the side; encouraging discussions prevents small issues from developing into worse problems down the road.
“Another important objective is to ensure an alignment of goals,” Turchansky said. “What are you trying to save for? What are you looking to do? You can be together for 20 years or more, and if you don’t talk about what those years are going to look like today, it’ll be much more difficult when you decide to discuss it later on.”
More often than not, couples that discuss money and financial goals will have to negotiate and compromise. Because of differences in background and upbringing, even the most loving partners don’t have the same financial philosophy. But as Turchansky points out, having open conversations is the starting point for long-term, and hopefully life-long plans. He says advisors can make an invaluable contribution in that discussion.
“Advisors probably didn’t have to think about this 10 or 15 years ago, but it’s something they have to consider today,” he said. “The bigger the role they can play in driving couples to have conversations about money, the more they will ultimately help their clients be successful.”