Last year I celebrated 20 years as a financial adviser and I took a moment to reflect on my experiences helping people manage their financial affairs. While much has changed over two decades, I came to the conclusion that one thing in particular had not. And that is, in my opinion, couples who share their financial decisions achieve better outcomes and faster financial progress.
In this article, I’d like to share a few stories that demonstrate why it’s not only empowering for both halves of a couple to be actively involved in their financial planning, but why it’s imperative.
The majority of our clients are involved in the mining and resources industry. They are business owners, professionals and executives, and it’s fair to say they are time-poor and their financial affairs have inherent complexity.
For some couples allocating financial responsibilities comes down to divvying up domestic chores and I often hear people say that one half of the couple is “better at finances” than the other. Time pressures, work and family commitments are other common influences that dictate whether both halves of a couple attend to financial planning.
One person taking responsibility for the joint finances is well and good, so long as nothing goes wrong and that person is happy to accept the pressure of sole decision making.
I have a client, let’s call her ‘Sally’. Busy in her own career and raising the couple’s children, after many years of her husband ‘Jeff’ (not his real name) exclusively managing their joint finances, Sally has been forced to take an active financial interest.
Unfortunately, Jeff suddenly became unwell and he is no longer capable of making important financial decisions on the couple’s behalf. Understandably, Sally is distressed and not only because of Jeff’s declining health, she is grappling with unfamiliar financial matters made worse by having no prior knowledge of their financial circumstances. If Sally had been involved in financial progress meetings (reviews) from the start, even if she didn’t fully understand some of the complexity, she would have a general understanding of their financial position. This would have enabled her to feel financially confident, and with our support, take the lead and continue managing their financial affairs rather than feeling anxious and out of control.
Similarly, ‘Ellen’ takes care of the family finances because her husband, ‘Rick’ is a senior executive who works long hours and travels extensively which means he’s frequently away from home. They are both in their late-fifties and while Ellen feels it’s time for Rick to begin slowing down, Rick is worried they won’t have enough savings to retire in the lifestyle he wants for them both. Rick doesn’t attend financial planning progress meetings and he doesn’t have a good understanding of his retirement options. Despite Ellen’s explanations, he worries unnecessarily about money and their financial future.
In my experience, it’s common for the financially less informed half of a couple, to stall decision making.
Another client, ‘Graham’, having missed out on an earlier opportunity, had found a property that he felt suited their financial strategy, but his partner ‘Jill’ wasn’t sure they could afford it. In the time it took to prove to Jill they could, and more the point, why it was an appropriate financial decision for them, they nearly missed out (again) on what has proven to be a valuable income-producing investment.
Conversely, couples who share their financial responsibilities and support one another in financial decision making feel a sense of control. They are empowered by the knowledge they have gained working together with their adviser and this in turn encourages them to be financially proactive and motivated to achieve financial goals.
Generally, they ask more questions which increases their financial knowledge and confidence. They commit to their financial plan, explore opportunities and because both are informed, they are more likely to take actions that generally achieve goals sooner and this can enhance their overall financial position and lifestyle.
If you are one half of a couple and you are carrying the load of financial decision making, your next steps for involving your spouse or partner should include:
1: Sharing this article with them!
2: Inviting them to attend scheduled financial progress meetings together;
3: Suggesting they take our 5 Minute Health Check as this questionnaire asks a range of questions that are financially thought provoking and insightful;
4: If it’s not possible for your partner to attend a financial progress meeting, share the meeting notes or ask us to include them in our meeting notes email;
5: No matter where you are in the world, know that you can contact us if either of you have questions. It’s all part of our service and there’s no need to wait until the next scheduled progress meeting.
For more information about financial planning, our approach which includes regular financial progress (review) meetings, please contact Brett Cribb on +61 7 3007 2000 or email email@example.com
Stratus Financial Group and its advisers are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306. This is general advice only and does not take into account your objectives, financial situation or needs, so you should consider whether the advice is relevant to your personal circumstances. You should also read the relevant Product Disclosure Statements (PDS) before making any financial decision.
Please note: Advice and services not offered under the Fortnum Private Wealth AFSL are referred to appropriately qualified professionals.
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