The Woman Problem

Financial advisors want to build relationships with the heads of households who make the financial decisions—such as choosing an advisor. They want to identify this financial decider as soon as they can and focus most of their attention on him or her; they want a personal relationship with the person who has the power to hire and fire them. But in their rush, male advisors—and most financial advisors are male—often make a big mistake: They focus on the male head of household. They assume, rightly or wrongly, that the husband is invariably the decision maker. As a result, they often alienate women who often have at least as big a part to play in a household’s financial choices.

The Spouses

Both spouses should be equally involved in family financial matters in case one has to take over for the other. For example, both spouses should agree on the selection of a financial advisor and attend quarterly meetings with the advisor. One spouse should not dominate the other when it comes to communicating with advisors. If this imbalance occurs, advisors may focus on the spouse who happens to talk more in meetings or respond to emails first—but who doesn’t necessarily dominate financial decisions. The result: A high percentage of women say they feel disrespected by advisors who show favoritism toward male spouses. For the advisors, that can lead to lost clients. For the clients, that can mean that the advisor doesn’t get a full picture of the family’s financial issues.

What About the Children?

Adult children should be involved in family finances if there is even a small chance they may have to manage them in the not-too-distant future. Think of children as insurance: They’re there if you need them.

But for this insurance policy to function, children have to be involved before they are needed. Doing so can be tricky if the kids are irresponsible, disinterested or just not very smart. But engagement can help them become more financially responsible—and in the meantime, you get to watch them and evaluate their decision-making capabilities.

Sudden Impact

Three primary events create “sudden” financial responsibility for a spouse: premature death, catastrophic illness and divorce. In one day, a spouse’s life can change forever. Ready or not, he or she is instantly responsible for making the family’s financial decisions.

Think Versus Feel

Three primary events create “sudden” financial responsibility for a spouse: premature death, catastrophic illness and divorce. In one day, a spouse’s life can change forever. Ready or not, he or she is instantly responsible for making the family’s financial decisions.

Sudden Impact

Communication style can be at the core of any disconnect between financial advisors and clients’ spouses. Sometimes sexism is the problem; financial advisors are used to the idea of men being the dominant wage-earners in a household. It’s not always about sexism, though. Many advisors are quantitative and analytic by nature; they intellectualize feelings to the point where they forget how to connect with people on an emotional level. But an equally high percentage of male and female investors are in the “I feel…” camp. They have emotional connections to their assets. They’re euphoric when asset performance is positive and fearful when returns are negative.

Bottom Line

The best way to protect the interests of families is to be proactive about getting both spouses involved. Both spouses should know what advisors are thinking, and advisors should know what both spouses are feeling about their advice, risk exposure and results. The family will benefit—and so will the advisor.

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