(Reuters) - As the fall wedding season begins, advisers should make sure they have a comprehensive plan to help clients who are getting married.
Advisers need to look at the big picture, like if the couple’s retirement goals align, and the nitty gritty, such as insurance policies and estate plans that need updating.
For David Edwards, president of the New York-based wealth management firm Heron Financial Group, this process starts when the couple gets engaged.
Just as an architect wouldn’t go into an initial client meeting with blueprints, an adviser should get to know a client’s spouse-to-be first before creating a plan, Edwards said. His first step is to meet in a non-business setting, like a restaurant.
The adviser should look at each individual’s financial holdings, insurance coverage, risk-tolerance levels, retirement goals and estate plans. A few good questions to ask: Who will pay the bills? How will you plan for big purchases? When do you want to retire and where? If there are children from a previous marriage, how will inheritances be handled?
Clients’ betrothed who do not already have an adviser will hopefully sign on to work with you. If the fiancé or fiancée already works with someone, ask to review all their financial accounts, looking at how their asset allocations overlap with your client’s holdings.
Having two advisers for one couple can get complicated, but usually they will eventually gravitate to one adviser.
“You can’t force it,” said Barbara Shapiro, president of Dedham, Massachusetts-based HMS Financial Group.
The next step can be awkward: convincing the clients to get a pre-nuptial agreement.
This is typically an easy sell for clients who are on their second marriage, but oftentimes younger, childless clients insist they don’t need one.
Try taking the emotion out of it for clients who fall in the latter category, said Shapiro, who co-authored the book “He Said: She Said: A Practical Guide to Finance and Money During Divorce.”
“This is just good financial planning,” she tells clients.
James D. Lange, a lawyer, CPA, and president of Pittsburgh-based Lange Financial Group, recommends that each member of the couple get separate lawyers, since oftentimes the spouses aren’t financially equal.
Pre-nup or not, advisers should send the couple to a lawyer who can help them update their estate plans. Couples should go to that meeting with printouts of all of their financial statements and insurance coverage.
After the wedding, update beneficiary information, including for insurance and retirement plans. For clients who have changed their name, help them update their social security card, credit cards and passport.
The newlyweds need to decide how much they want to co-mingle their accounts.
“In general, the fewer the accounts the better,” said Walter (J.R.) Gondeck, a Deerfield, Illinois-based managing director and partner at the Lerner Group of HighTower Advisors LLC.
Edwards said the best thing advisers can do for newlyweds is take an unromantic view of marriage.
“People generally think of marriage as being a romantic engagement, but it also is a business relationship,” he said.
Reporting by Jennifer Cummings; Editing by Suzanne Barlyn and Frances Kerry