(The opinions expressed here are those of the author, a columnist for Reuters.)
By Robyn Post
CHICAGO, Aug 8 (Reuters) - Before meeting a client couple for the first time, financial adviser Jeff Stoffer has each partner answer a questionnaire asking everything from “Why are you seeking an adviser?” to “Are you living the life you want to be living?” and “What does your financial life look like to you?”
To get a clear view of where each spouse is coming from, the San Rafael, California, financial adviser allows no collaboration. “If you don’t understand what drives them each independently, you’re doing them and yourself a disservice,” he says.
The working relationship between an adviser and a married couple can be almost as complicated as marriage itself. Advisers challenged by multiple perspectives and personalities can make missteps, such as not getting equal input from both partners, not understanding the differences in how women and men approach investing or working with an adviser, and not incorporating this information into the planning process.
All this can lead to “misunderstandings and strain on the adviser-client relationship,” said Nellie Oster, a financial strategist for investment management firm BlackRock Inc.
But those who take the time to avoid simple mistakes can build loyal and productive relationships with their coupled-off clients.
Even when it is unintentional, many financial planning conversations with couples are still driven by a dominant partner.
A 2013 study by Fidelity Investments showed that only 42 percent of couples who work with an adviser interacted jointly with that adviser. (Based on the study, Fidelity came out with a Financial Compatibility quiz to help advisers assess each partner's strengths bit.ly/1zNMPTE).
Letting one partner dominate can put your advisory business at risk, says Jylanne Dunne, Fidelity’s senior vice president of practice management. Consider that 70 percent of widows fire their advisers within a year after their husband’s death, a 2011 study by research firm Spectrem Group showed.
An adviser should be clued in to the different investment styles and vulnerabilities typical of the two sexes, suggests BlackRock’s Oster. Women tend to be more risk-averse. Men tend to suffer from “confirmation bias,” trusting information that validates their beliefs and discounting evidence that contradicts them.
Of course, those patterns are not always linked, but when they are, Oster recommends that advisers assuage women’s worries with diversified low-volatility investments and work to educate men on how confirmation bias can work against them.
She suggests that advisers also be aware of different communication preferences. While men may be happy with bullet-point presentations, women like to be educated on the details and take longer to make decisions.
When Stoffer’s clients argue over spending, saving or choosing heirs for their nest egg - such as when step-families are part of the equation - he has clients share childhood money experiences to gauge how old emotions may be influencing them.
“This isn’t a popular approach among advisers,” he says. “But it helps them see each other’s perspective, rather just pushing their own agenda.” (Reporting by Robyn Post; Editing by Linda Stern and Lisa Von Ahn)