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What Couples Need to Know About Working with a Financial Advisor

Here are four reasons why you need to find a financial advisor you can trust.

Beyonce is famous for asking the question, “Who run the world?”

“Girls!” is the answer, by the way.

From a financial standpoint, that’s accurate. Slews of research published by financial giants keeps stacking up in favor of females. Women live longer than men. Women control more wealth. A 2015 report by BMO Wealth Institute found that women controlled 51 percent, or $14 trillion, of U.S. personal wealth at the time. That number is expected to grow to $22 trillion by 2020.

Yet earlier this year UBS reported almost 60 percent of widows wish they would have been more involved with long-term financial planning. A large majority of widows and divorcees blame themselves for not being more financially involved. Those statistics are staggering.

The best time to become involved in your financial plan was from the beginning; the second best time is today. It’s never too late to get started with a financial advisor you trust. As for couples where the husband takes care of the investments? Move to an advisor with whom the wife can connect. Here are four reasons why.

The wife will eventually switch advisors.

As many as 80 percent of women leave their husband’s advisor when he dies. This is a troubling statistic for an industry that’s largely comprised of men. But consumer choice always wins, and a widow will most likely change financial advisors.

Some advisors may think that women only want to know the phone number to call when “it’s time.” That isn’t a good plan for anyone. In the event a spouse dies unexpectedly, trading in accounts tied to his Social Security number needs to stop immediately. Deceased persons can’t have taxable events like stock trades. Waiting days or weeks to inform the advisor creates additional red tape for everyone.

Imagine yourself in a time of crisis, calling a complete stranger to report the death of your spouse (inciting more stress). Compare this to calling a trusted advisor whom you know you can rely on. Fiduciary financial advisors are focused on being a partner with you, and if you don’t have that kind of advisor, it’s time to find one.

Women understand more than they think.

Don’t assume men understand investing better than women, even if it appears that way. A recent study by Market Strategies International showed that men have a higher confidence in their knowledge about financial-related terms, even though women actually knew more than the men surveyed.

Regardless of gender, it’s important to ask and understand these simple questions:

  • What’s in your portfolio?
  • Why is it there?
  • What is it designed to do?
  • What should your retirement withdrawal rate be?
  • Can you achieve that withdrawal rate with your current allocation?

It’s not realistic to rely on insurance proceeds or Social Security to fund retirement.

As it stands, more women are likely to die in poverty than men. This is another troubling statistic. Social Security was never meant to replace your entire income. It’s important to understand your own retirement accounts to avoid needing to make drastic lifestyle changes.

Many couples divide household finances this way: The husband handles the investments, and the wife handles household budgeting and bills. It’s easier to step in and pay some bills if one spouse dies than unravel an insufficient investment philosophy.

Couples should be on the same page about both investments and expenses. That way, the surviving spouse will be more likely to keep the same lifestyle if the other passes away.

Meeting with a financial advisor shouldn’t induce panic. The good news for women is that the financial services industry is changing. Stockbrokers, as depicted in movies like “Wolf of Wall Street,” were notorious for selling investments just to line their pockets. A fiduciary financial advisor is different and can bring you greater satisfaction with life. This reason alone should have you excited to meet with them.

A financial advisor should take a holistic approach that doesn’t only address investments. Look for a fee-only planner that’s a fiduciary to give you financial guidance without worrying if they have your best interest at heart. They should improve your entire well being by creating a plan that addresses all your concerns and desires in life.

And please, work with an advisor who includes both partners in the conversation.

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Better Money Decisions