Coaching one person on financial matters is hard; you have to consider their risk tolerance, life stage, financial condition, life goals, and so on. When you have to confer with a couple, the potential for trouble increases significantly. When partners or spouses have differing financial priorities, there’s a much greater chance for emotions to run high. In such a case, it can be useful to separate the two and get them on the same page with a simple list.
That’s what Matthew Carbray, financial planner and managing partner at Ridgeline Financial Partners and Carbray Staunton Financial Partners, advises based on personal experience. “Recently I walked into a meeting with a couple thinking that I knew these people well since I had worked with them for years,” he told Financial Advisor IQ
. “They had been pretty frugal throughout their professional years and I assumed those traits would carry over as we looked harder at their retirement years.”
However, when it turned out that the couple had some “extra” money coming their way, they took different stances on what to use it for. One wanted to spend it, while the other wanted it to go toward a charitable legacy.
“I sensed their disagreement was about to derail the meeting,” Carbray said. He called a timeout, asking them to try an exercise. Producing a set of 20 index cards — each of which stated a financial goal or concern — he asked the couple to separately rank the statements in order of importance, from highest to lowest. After the two completed their rankings, Carbray brought them together, asking them to reveal their lists to each other.
“I also asked them to explain why certain statements took precedence over others,” he said. “Each spouse had a turn, during which the other spouse listened without comment.”
The spouses were initially surprised at how different their lists were, but as the discussion proceeded, they realized that they were more closely aligned than they initially thought. An animated discussion followed, which ended with both planning together to give more to charity but still save enough to supplement and enjoy their retirement.
“[S]eparating the couple is important because it lets spouses who otherwise might feel constrained have a say in the matter,” Carbray said. “Also … even the savviest spouses have not considered all the factors that come into play when planning their financial future, so putting those statements in front of them challenges them to consider all the issues at hand.”
Financial advisors need to be alert and empathetic enough to listen to their clients. At the same time, when dealing with two clashing personalities, they to be able to mediate and eventually help them come to a peaceful resolution.
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