Only 42% of couples who work with an adviser said they do so “jointly,” analysis of Fidelity Investment’s 2013 Couples Retirement Survey shows. Researchers argue the imbalance in financial engagement may put women in a difficult position later in life, as census data shows women will, on average, outlive their spouses.
“Men reported that they are afraid of leaving their partners financially unprepared should they need to manage the finances themselves,” says Jylanne Dunne, senior vice president of practice management and consulting for Fidelity Institutional Wealth Services. “What they may not realize is that by driving their households’ relationship with their financial adviser, they could be unintentionally turning this fear into a reality.”
The good news, Dunne continues, is that there are simple steps couples can take to prepare for a smooth transition—and advisers can play an important role in the process. In fact, the study found couples were more comfortable talking to their advisers than one another about many topics, especially long-term planning conversations around death and inheritance.
“Women are not unwilling to step into the financial driver’s seat,” explains Brian Nelson, vice president of practice management for National Financial, Fidelity’s clearing division. “Women are interesting in working with their adviser, but they say they hand over the reins because they trust their partner. This may not only create instability for the family, but also for the adviser-client relationship.”
Nelson points out that, while the study found eight in 10 women do not have plans to change advisers upon their partner’s death, when reality hits and there is no solid relationship in place, many do.
“An adviser’s bond with both members can be key to bridging this gap between intent and reality,” Nelson says.
Younger Women Less Engaged
Overall, women measured over twice as likely as men to say their significant other was the primary contact in a couple’s advisory relationship (31% compared with 13% of men).
The gap was even wider for younger women, with 41% of Gen Y women reporting their significant other was the primary contact person. For Gen X women the number is 33%, and for Baby Boomers the figure falls to 28%.
The most widely cited reason for women to hand over control of the adviser relationship is trust in their partner (53%), followed by 33% of women who said their significant other had a personal relationship with the adviser.
Not surprisingly, the increased likelihood that women will allow their partner to manage an adviser relationship comes along with lower confidence in their own ability to assume full financial responsibility for retirement finances and strategies. Fewer than half of women surveyed (45%) said they are confident in this respect.
Study authors also make a series of recommendations to advisers on helping women close the confidence and preparedness gap.
Some considerations for advisers to implement in their relationships with couples include the following:
- Be frank with male clients. This includes acknowledging the fear that men have of leaving their partners unprepared should they die, and stressing the hard truth that this one-on-one relationship could be creating just that situation. Ask them to bring their partners to the next meeting and regular meetings thereafter.
- Implement a new client policy requiring joint participation. To help maintain the client relationship after the death of a spouse, advisers may want to consider implementing a new client policy that requires married couples to include both spouses in the planning process.
- Address the tough topics together with a conversation starter. One way to start to tackle serious planning conversations is with a conversation starter, such as running an online retirement needs calculator or having clients take a financial education quiz, such as Fidelity’s Financial Compatibility Quiz.
To read more about the full findings from the 2013 Fidelity Investments Couples Retirement Study, see this longer summary, or view Fidelity’s whitepaper, “Sudden Decision-Makers: Empowering Women in Transition.”