Divide and conquer? Splitting household responsibilities between spouses might seem more efficient, but some things are just too important to leave to someone else.
Key findings of a recent study published by UBS Wealth Management USA, reveal that 56 per cent of married women still leave the investment and financial planning decisions to their husbands, mainly because they believe their husbands know more about these topics. Surprisingly, millennial women are even more likely to follow their mothers’ example, with 61 per cent leaving investment decisions to their spouse.
This decision has a serious downside, as most women will end up alone at some point in their lives —without the financial skills and confidence to manage their affairs. Ninety eight percent of widows and divorcees interviewed strongly advise women to take an active role in their finances now.
Getting started is straightforward
Get Help – You Don’t Have To Be an Expert to Get What You Want
Despite what you hear, most investors are not skilled “Do-it-Yourselfers”, although one partner often has slightly more knowledge and interest than the other. Most successful investors, male or female, hire a financial professional to assist them, just as you would retain an expert to assist with any other aspect of your life. Document what you want out of the relationship with an advisor, what it will cost, and how you will measure success. Discuss these goals with your partner, noting any differences of opinion. If you’re asked to complete a questionnaire about your financial goals and risk tolerance, consider completing it separately from your partner.
Commit to a Full Financial Planning Process
Investing cannot be done in isolation. A detailed financial plan, done early, will ensure the household is on the path to success by examining all aspects of your life strategy including budgeting, retirement planning, tax, risk management, legal, estate planning and investments. A dynamic financial life strategy starts by setting goals and establishing a road map to achieve them, taking into account the unexpected. Experts in investments, tax and estate planning are all part of the team working together to make you successful. The plan should be reviewed regularly and anytime you experience a major life event.
Interview Financial Professionals Together
A couple’s decision to hire a financial professional must be made together. Create a short-list of firms you will interview. Take notes and evaluate each on a short-list of key criteria that are important to both of you. Understand that your criteria may be different than your spouse’s, but equally important. There needs to be a high level of trust and comfort among both of you. Does the financial professional speak to each of you? Are they asking how you each feel, what you each think, if you each agree? Do they ask what is most important to you? Would you feel comfortable dealing with this person if your spouse wasn’t with you?
Plan to be an active participant in all portfolio and financial planning meetings. It’s best if one partner does not do all the talking. Prepare your own questions. Get to know the other members of the financial professional’s team and the full range of services offered to you. Know who to call if you have a question or want to conduct routine business. Take turns doing this so that you both build a trusted relationship and comfort level with the people serving you.
Insist on Plain Language
Ask questions and insist on plain language explanations. The finance industry is rife with jargon, and professionals sometimes get caught up in their own terminology. You are not expected to know all the technical terms a financial professional might use, any more than you would those of your doctor, lawyer, or real estate agent. They must speak your language. If you do not understand, ask again and don’t go away unsatisfied.
Take an Active Interest
As with anything in life, understanding leads to engagement. We all have our favourite pursuits, and others we care less for. Learning to build a successful financial life strategy is interesting, empowering and opens many doors. It begins by participating in meetings, asking questions, attending a seminar, webinar or reading a book.
In our practice, we often hear one partner say, “my spouse has no interest in this and leaves it to me.” Asked directly, however, (she) will usually say, “I don’t understand it, so I leave it to (him)”. Armed with some basic financial knowledge and the confidence it brings, building wealth together will become an activity you manage together.