How financial openness fuels long-lasting relationships

Advisors can help clients come clean and avoid the consequences of financial infidelity

How financial openness fuels long-lasting relationships

It’s the month of love, and couples across Canada are no doubt still basking in the afterglow of their recent Valentine’s Day celebrations. But statistically speaking, more than one tenth of them may be guilty of infidelity — though it’s not the physical kind.

In a recent survey conducted by, 16% of Canadians admitted to keeping financial secrets from their significant other. Among those, 31% made purchases behind their partner’s back, 28% could not admit they had a poor credit score, and 21% had hidden cash.

“Communication is essential in any relationship, and that includes in matters of money,” said Omar Abouzaher, regional vice-president for Ottawa East Market & Western Quebec at BMO. “Money issues are among the top reasons for breakdowns of relationships, unfortunately. So being honest from the get-go about your finances and money habits is very important, and it helps couples gel together, so the sooner it happens, the better.”

While honesty from the outset is the ideal, that’s not always what happens: many Canadian couples keep financial secrets from one another. And in the world of banking, that has the potential to breed tension and conflict.

“In my experience, financial secrets usually involve secret credit cards or loans that the other person doesn’t know about,” Abouzaher said. “It’s Murphy’s Law; those secrets will eventually come up to the surface when you don’t expect them, or when you really need access to finances.”

Such issues can have potentially life-derailing consequences, he said. A couple may apply for a mortgage for their first house, only to get denied because of a debt that one partner did not tell the other about. Parents that want their kids approved for a student line of credit face similar risks from financial secret-keeping.

“Possibly the worst situation could be during an estate settlement, when a deceased spouse has significant secrets that the surviving spouse would have to deal with,” Abouzaher said. “It’s easy to imagine one spouse’s retirement plan being delayed as they make the decision to share their finances.”

There’s a multitude of reasons why couples would not be totally upfront about their fiscal histories, which he attributed to two major themes. Doubt is a particularly pressing issue for those just starting out on their relationships, when one person isn’t sure how the other will react; fear of being judged is a different but closely related hurdle.

“A couple is like a team that needs to trust each other, which includes honestly discussing their money, as well as their financial strengths and weaknesses,” Abouzaher said. “That can take them a long way on the path to establishing goals and objectives that they can build on collectively as a couple.”

While love can be a strong attractive force, conversations that involve money tend to be fraught with emotional landmines, particularly for the majority of partners who don’t know much about it. That’s why it’s essential to have an advisor to help educate and build a plan, while rationally taking elements like both partners’ risk tolerance and character into account.

“Of course, effectively communicating and starting money conversations starts with patience and empathy, which I think goes for both parties in a relationship,” Abouzaher said. “Regardless of their net worth or income, partners should understand each other’s challenges and learn from each other’s experiences.

“Openness is also important from the advisor’s side,” he continued. “Advisors must listen to their client’s without judging them, while also putting themselves in the other person’s shoes. When all people involved in the financial-planning discussion come from a place of openness, it’s much easier to come up with a common goal that partners can use to build a life together.”