Why You Shouldn’t Keep Your Ex’s Financial Advisor
September 12th, 2019
By: Stacy Francis
Divorce is meant to be a clean break with your spouse, so why do so many women stay with their exes’ advisors?
In Allianz Life’s 2019 “Women, Money and Power Study,” 60% of the women surveyed said that their current “financial professional treats their spouse/partner as the decision maker.”
Some women tell us that it is easier to stay than face the task of finding their “right” financial advisor. However, there are several situations when women should consider overcoming the comfort of keeping things the same and move on to a new financial planner.
Your advisor is closer to your ex than to you.
Many women we speak with admit that their husband or spouse is the one with the chummy relationship with their financial advisor. If this was the case in your marriage, divorce is a great opportunity to interview other advisors and find one who understands your exact needs and is able to tailor their services to you — not your ex-spouse.
You are no longer a big enough client for your advisor.
Many women also fear that they will not benefit from the same level of attention and service that they received when they were married, and rightfully so, because they now have only half the assets they used to have with the advisor. If a woman has custody of children, she may have also agreed to take the house and give up more investment assets, making her appear an even less profitable and worthwhile client, compared to when she was married.
Your financial situation is different, and your advisor is no longer the right fit.
Your personal goals have most likely changed since your divorce. Is your current advisor the right fit for you at this point in your life? Maybe your ex-spouse handled the finances and was much more comfortable with risk than you are. This may have worked during the marriage, but as a newly single person, you will want, and need, to invest differently. Can your advisor help you answer questions such as: Can I stay in my home, or do I need to downsize? Do I need to go back to work, and if so, how much do I need to earn? What does my new cash spending plan need to look like, and does this allow me to eat out, do special things for my kids or go on vacations? Has your advisor written a comprehensive financial plan that answers these and all of your other important questions?
Moving On To A Healthy Relationship With Money
Engaging with a new financial advisor post-divorce can also make a lot of sense psychologically. In an unhealthy relationship, money can be one of the primary ways in which a spouse will try to control the other. One spouse’s financial expertise might have been held out as a way to diminish and disempower the other spouse. Staying with the same financial advisor as your ex-spouse can keep this line of financial bullying open.
Because the bullying spouse knows how the shared advisor works, they may feel empowered to tell you how you should be interacting with the advisor, or even think that they can ask the advisor questions about you, such as how you are spending your money and how much you are taking out of your portfolio. Financial advisors of high integrity will keep your information confidential, but do you even want to run the risk that your information will be shared with your ex-spouse without your knowledge or permission? And do you want to run into your ex at the financial advisor’s holiday party or at the client education event that you really want to attend?
If any of these situations applies to you, it makes sense to start anew, distance yourself from your ex financially and find your own financial advisor.
How do you find a financial advisor who can cater to your own personal financial situation?
When choosing a financial advisor to hire, you want to find the best fit for your values, so you need to ask the critical questions that pertain to your specific situation.
If you are recently divorced, it’s important for you to feel that you have your own relationship with the advisor and that you are being heard. Working with a financial professional requires you to be vulnerable about all the personal aspects of your life — especially in the event of divorce. Find an advisor that listens to you and understands your goals.
I would suggest that you choose to work with a fee-only advisor, which means they do not sell financial products or accept commissions from any other source. They have a fiduciary responsibility to act in your best interest, and you can expect and receive independent advice. You can easily find a fee-only advisor near you through NAPFA or Garrett Planning Network.
Once you believe you have found an advisor, you can use the CFP Board-compiled top ten questions to ask at your first meeting.
Divorce may be the first time you’ve handled the finances, but even if you’ve managed the household finances before, it’s still critical to have an advisor on your team who you trust and who will work to educate and empower you during this next chapter of your life.