Scott Van Voorhis* says while it’s common for one partner to handle most money decisions in a relationship, it’s important to make sure both have a voice.
Photo: Jacob Wackerhausen
It’s not uncommon for couples to split up their household duties, with the more money-savvy partner handling the finances.
But financial planners say cases where one spouse completely dominates discussions about money and investments while the other partner checks out can be a cause for concern.
Such an imbalance can create serious problems down the line if the financially dominant spouse becomes ill or dies.
It can also point to deeper tensions and problems in the relationship as well.
Faced with this situation, some planners say they attempt, both in subtle and some less subtle ways as well, to connect with the silent spouse and make sure everyone is on the same page.
For financial planners, understanding these dynamics and finding ways to get both partners on the same page is part of the job, requiring at times skills akin to that of a psychologist or family therapist.
“It’s so important for the financial advisor (or unbiased third party) to allow both parties the opportunity to be involved,” said Marguerita Cheng, CEO and founder of Blue Ocean Global Wealth.
Spotting trouble
It may be natural for one partner to take the lead on financial matters.
But failing to engage the other partner in the discussions can have serious ramifications down the line, planners say.
“If only one spouse does all the talking while the other stays silent, it can lead to major misunderstandings later about everything from how much investment risk to take on in trying to meet retirement goals to what age to retire at,” said Chris Schiffer, Executive Vice-President and COO of AEPG Wealth Strategies.
“It can lead to a skewed understanding of goals,” said Schiffer.
Sean Williams, wealth advisor at Sojourn Wealth Advisory, said the impact can be devastating if the partner who has exclusively handled the couple’s finances with little or no input from his or her partner dies.
He recalled working at a bank in the early 2000s and twice having tearful women come to him after their husbands had died.
One said she had seen letters from the bank and was trying to figure out whether her late husband had opened an account there.
“These women were experiencing the great loss of their loved one and felt absolutely abandoned and ignorant,” Williams said.
“I don’t want any of the families I serve to experience anything like that.”
“Sure, one spouse may show more interest in personal finance or the markets than the other, but both have to be informed enough to make decisions together.”
Erika Safran, founder of Safran Wealth Advisors, said it’s okay when one partner is the “primary spokesperson” for a couple’s finances.
But when that partner starts to critique or belittle his or her partner’s financial life, it raises alarm bells for Safran.
“When one person dominates the conversation with ongoing concern about the other person’s financial life and situation, that’s when the problems arrive,” she noted.
“The dominator demoralises their partner who eventually disengages and gives up their power to the dominating force.”
There can also be other baleful consequences when one partner completely dominates financial decision-making.
Advisors need to have a close eye on this dynamic and “should be adept at mediating involvement of both in any discussion to ensure comprehension, consensus and acknowledgement,” said Lili Vasileff, founder and President of Divorcer and Money Matters.
“Without the advisor being attuned to seizing this opportunity, this is [the] most common indicator for couples heading to divorce,” said Vasileff.
Part planner, part therapist
When it comes to getting both spouses talking about their finances, financial planners often borrow a page or two from the psychologist’s playbook.
Neil Waxman, Managing Director of Capital Advisors, said getting out of the trap of simply focusing on the talkative, more financially confident partner requires planners to tap into a different skill set.
For the planner, that means active listening “and engaging both parties in discussions with each other via open-ended and directed questions,” Waxman said.
According to Waxman, it is referred to commonly in the field as “financial social work.”
CFP Kristin Sullivan said she goes out of her way to make eye contact with the quieter partner.
She will also stop the conversation and ask the less talkative partner, “Are you comfortable with this?” or “Would you like me to explain more about this idea?”
Patti Black, a partner at wealth management firm Bridgeworth, said it is common in couples for one partner to serve as the “chief financial officer,” paying the bills, making investment decisions and buying insurance, among other things.
But while this can be fine, it is important that the couple has regular “money talks” to make sure they are both on the same page with these crucial issues.
When she meets with clients, Black asks the “non-CFO spouse” for his or her thoughts first.
Black also makes a point of avoiding financial jargon.
And she checks in regularly with the quieter partner, asking, for example, “what doesn’t make sense about what we just discussed?”
“Our health is not guaranteed, so it is critical for couples to have regular “money talks” to make sure financial information is shared,” Black said.
* Scott Van Voorhis is a US-based business and real estate writer for V2 Content Solutions.
This article first appeared at www.thestreet.com.
