Broker Check

Mediating Disputes Between Spouses is Part of an Advisor's Job

Howard Hook, CFP®, CPA quoted in InvestmentNews.com, September 21, 2014

Watching a longtime married couple in their late 50s driven to the brink of divorce over financial issues, Lili Vasileff realized her role as a financial planner was morphing into that of a marriage counselor.

The couple had paid for college tuition for their two older children, so the husband thought it only fair to pay the freight for their third child. He was poised to dip into the couple's savings to do so. His wife disagreed, especially as they prepared to retire. She felt they couldn't afford it.  

“She didn't want to be budgeted during retirement,” Ms. Vasileff said.  

Advisers often find themselves playing domestic diplomat in an effort to keep financial plans on course.

RIPE FOR DISCORD

Retirement in particular seems to be a prime time for marital discord as couples get ready for what is sometimes a drastic change in lifestyle. And with 10,000 baby boomers retiring every day in America, financial advisers are bound to encounter couples who don't see eye to eye about their golden years.  

“People just naturally assume, 'We've spent the past 40 years together — of course we're going to have the same ideas about retirement,'" said Howard Hook, a certified financial planner at EKS Associates. “That isn't true. Sometimes you can't even agree on what color to paint the living room.”  

Mr. Hook is no stranger to spousal tensions arising during client meetings.  

He recalls one situation where the husband had been retired for a few years and now his wife was retiring.  

Their primary residence was in New York, but she wanted to buy a vacation home in Florida, where they would spend the winter. But the husband was afraid that they couldn't afford it.  

Rather than launch into the numbers, Mr. Hook said, he made sure both spouses had a chance to speak their mind before working toward a solution.  

“I try to not feel like I'm favoring one spouse over the other,” he said. “If you immediately take somebody's side — even if it might be the better option — you won't create the harmony, and somebody is going to walk out upset.”

COUNSELING MODE

Upon further conversation, it became clear the husband also was interested in moving to Florida but thought it was too expensive to own two houses. Mr. Hook switched out of counseling mode and into advising mode.  

“We ran a retirement projection that showed they could afford the second home,” he said. Within a short time they were enjoying Florida so much that they sold their New York home, which more than paid for the Florida home.”  

While some advisers don't mind stepping into counseling territory, others say disagreements about money can be a symptom of deep-seated marital problems that are better addressed elsewhere.  

Christopher Jones, president of Sparrow Wealth Management, said he has referred between a third and half of his clients to a marriage counselor at some point.  

“If you can tell the issue is something that they've been dealing with for a decade, you should recommend them to professional counseling, because they aren't going to resolve that in a one-hour session,” Mr. Jones said.

Susan Zimmerman, a financial consultant with Mindful Asset Planning, went back to school to become a licensed marriage and family therapist after two of her clients came into her office, sat at opposite ends of the table and started yelling at each other.  

“I thought, if I'm going to keep seeing clients, being a financial planner is not enough,” Ms. Zimmerman said.

In her dual role as adviser and therapist, she lets clients know that people have different — and often emotional — approaches to money.

She also trains other advisers at her firm to deal with spousal arguments.

“The therapeutic element of financial planning is helping people realize they might feel differently,” Ms. Zimmerman said. “Rather than avoid a topic that we think might be uncomfortable, we want to at least provide help.”

She pointed out that she makes it clear to clients that she is a financial planner first and a marriage counselor second.

FIRST THINGS FIRST

“We want to make sure that people don't expect us to provide counseling,” Ms. Zimmerman said. “We tell them we aren't here to do marriage counseling but to help resolve issues about your money.”  

And what about the couple who thought they couldn't pay for their son's college as well as their retirement?  

Through compromise, Ms. Vasileff was able to help them come to an agreement. She suggested they pull a little from their savings and contribute something toward their son's education but also have him take out loans in his name.

“I'm not saying I saved the marriage,” Ms. Vasileff said. “But I opened their eyes to exploring greater nuances and additional resources available to them.”