When I get divorced, what should I expect from an advisor?
If you add into the emotional and financial whirlwind that is called divorce a high net worth and sizable assets, you take the stress and complexity of divorcing to a whole new level. So, for spouses of means, enlisting the help and advice of professionals is of added importance. And hiring a divorce lawyer is only a start.
In particular, if your knowledge of the family business, its investment portfolio, the properties it owns, its trusts, etc. is limited, seeking the counsel of your own accountant, estate attorney and financial advisor during the divorce will better protect your interests.
But first, we suggest that you try to think candidly about your situation. Simply put, your life is going to change. While that may seem obvious, in our experience many people have difficulty grasping or accepting this fact.
Also, think about your family’s goals during the marriage. Perhaps, as we advise our clients to do, your family drafted a mission statement, laying out objectives to attain and values to respect. Revisit it and use it as a basis to draft your own “personal mission statement.”
If your family drafted a mission statement, use it as a basis to draft your own.
Having done that, you will be ready to hire your own financial advisor. Here are some of the things you should expect of him or her:
AN UNDERSTANDING OF THE IMPLICATIONS OF YOUR POST-DIVORCE INCOME
Whether you were the primary/sole breadwinner or managed the household, your net income and how you spend it are going to change. It will most likely be less, and often you will receive a set amount on a scheduled basis. The family credit card, joint bank account, etc. will be gone. It will be your advisor’s job to know your situation, prepare you for these inevitabilities and help you recalibrate your life to deal with these changes.
THE KNOWLEDGE NECESSARY TO EDUCATE YOU ON MARKETS AND INVESTMENTS
This is essential for a non breadwinner client who relied on a spouse to manage his or her finances. You don’t need to become an expert, but your advisor should educate you to the point that you become an informed consumer of financial services.
EXPERTISE IN MANAGING A DIVERSE PORTFOLIO
Particularly in a low interest-rate environment, like the one we have now, an advisor needs to broaden the spectrum of your investments. For example, invest in higher-yield securities and other instruments to bolster your income.
A TEAM EXPERIENCED IN THE COMPLEXITIES OF DIVORCE
The administrative aspects of a divorce are, in fact, complicated, and often can get emotional. An advisory firm’s employees, even at the assistant level, need to be skilled administrators, but also sensitive to all aspects of divorce.
THE LEADERSHIP SKILLS NECESSARY TO MANAGE A CLIENT’S TRANSITION TEAM
Again, both spouses should have their own team. And an advisor can and should take a leadership role in coordinating the team’s members so the interests of the client—you—are protected.
To sum up, for couples of means, divorce is immeasurably complicated and emotionally trying, and like it or not, life is going to change, for both parties. But, as is true of many things in life, the best policy is… be prepared.
The Jordan Group is a financial advisory team with the Wealth Management division of Morgan Stanley in New York, NY. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Smith Barney LLC, Member SIPC [www.sipc.org]. Morgan Stanley Financial Advisors engaged Worth to feature this article. They may only transact business in states where they are registered or excluded or exempted from registration [www.morganstanleyfa.com/thejordangroup]. Transacting business, follow-up and individualized responses involving either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made to persons in states where they are not registered or excluded or exempt from registration. Morgan Stanley Private Wealth Management, a division of Morgan Stanley Smith Barney LLC. Member SIPC.CRC1885040 09/17