Major life events are often the catalyst for equally sizable financial decisions, so most advisors are well versed in what it takes to help their wealthy clients prepare for and manage key milestones. Some events, however, happen without warning, such as death or divorce. Unwelcomed circumstances such as these require a special approach. Late last year, I moderated a Financial Advisor webinar with Kathleen Burns Kingsbury, a Janus wealth psychology expert, on this very subject. In the following interview, Kingsbury, the author of How to Give Financial Advice to Women and How to Give Financial Advice to Couples, tells Private Wealth readers what advisors can expect from their grieving clients and how to engage most effectively with women who are facing difficult life transitions.
Grove: What should advisors know about women in grief?
Kingsbury: It is important to understand the stress and emotional impact of losing a significant other. While everyone grieves differently, advisors need to know that a grieving client may experience a range of emotions, including shock, anger, sadness and even relief—especially when the client was a primary caregiver for an elderly spouse—over the next year. Advisors should work to normalize the client’s emotional reactions and provide plenty of time and space for the client to talk about her loss and any financial concerns she may have related to it.
Grove: Can you share some recommendations with advisors on how to do this?
Kingsbury: It is best to focus on small action steps and help the client determine what tasks need to be completed now and what action items can wait. Recommend a six- to 12-month decision-free zone and assure the client that the long-term financial decisions, such as asset reallocation and adjusting the financial plan for her new life circumstances, can wait. The main goal is to provide clients in these circumstances a place to feel safe and a reminder that they are not alone during these difficult times. I partnered with Janus to develop a practice support program for advisors that looks at both the personal and technical aspects of delivering advice to women in transition. The program materials and advisor resources are available at www.janus.com/widowhood.
Grove: Can advisors make any useful assumptions about how to deal with a widow based on her age?
Kingsbury: I encourage advisors to treat all clients as unique individuals first and then a member of a generation or gender second. Of course, there are some generalities that you can make about a widow who was born around World War II and one who was born at the tail end of the boomer generation. Often, older female clients will have deferred investing and money management to their husbands as a result of the societal messages they received growing up, and may need more education and some hand holding at first.
Grove: How about the specific differences between a widow in her 80s versus, say, one in her 50s?
Kingsbury: A younger widow was probably reared during a time when there was an emphasis on equal rights and women were entering the workforce in large numbers. So, a widow in her 50s may have a career and even be the primary breadwinner in her family. With someone in this demographic, advisors should ask about her role in the couple’s finances and how they made investment and money management decisions when her partner was alive. This question provides useful data about the need for education and support during this transition.
A client in her 80s is more likely to suffer from mild, moderate or severe cognitive impairment than someone who is thirty years younger. Therefore, advisors need to assess the widow’s ability to process information and make sound financial decisions. Sometimes it makes sense to invite an adult child or trusted relative along to meetings as a support system. This, of course, can also be helpful for women in their 50s as grief often makes understanding and processing new information challenging.
Grove: How important is it to include the widow's family in meetings and discussions?
Kingsbury: It is ultimately up to the client to decide who attends meetings. If your client is agreeable to having a family member attend some or all of the meetings, then I think it’s prudent. When a client is grieving, it can be hard to remain focused and learn new information. When a family member is present, this person can take notes, ask questions that their loved one may have overlooked and serve as a support person to your work with the widow. In addition, if the client has dementia or develops dementia or physical impairments, then having a family member knowledgeable about the client’s financial situation is extremely helpful.
Grove: Have you identified any issues unique to widows with significant wealth, say upwards of $50 million?
Kingsbury: Many of the issues widows face are the same no matter what their net worth. However, with women who have assets above $50 million, there is much more complexity to their financial picture. If they are new to managing this level of wealth, there can be a steep learning curve and the process can be very overwhelming. Also, wealthier widows are more often the targets of scam artists, so it’s important to be on the lookout for male suitors, long lost relatives or other “friends” who may take advantage of these women when they are at their weakest and grieving the loss of their partner.
Grove: An experienced advisor can be extraordinarily helpful in those types of circumstances. Do you have any thoughts about how advisors can reach the widows who need their expertise the most?
Kingsbury: The best way for advisors to find widows they can help is through influencers like estate attorneys, hospice workers, grief counselors, funeral home directors and even florists. They are often the professionals who are closest to the grieving client in the time surrounding the death of their spouse. The best approach to take is one that involves getting to know these influencers over time and demonstrating that you are a caring wealth manager with this specific area of expertise. When one of their widowed clients needs financial assistance, a long-standing relationship will make it easier for them to make the referral.
Grove: Can any of your suggestions be applied to women who are going through a divorce?
Kingsbury: When a client gets divorced, they do experience a loss and often display a similar range of emotions as a widowed client might. It is important with divorcing and divorced clients to help them take small action steps toward a larger goal. One mistake advisors tend to make with widows and divorcees is they overwhelm them with long to-do lists. While this is a well-intended mistake, it should be avoided. It is best to take a coaching approach by agreeing on one or two homework assignments at a time. This gives the client a sense of mastery when the tasks are successfully completed and allows them to have time to emotionally process their change in marital status.
Grove: We've all heard the statistics that widows and divorcees and inheritors find new advisors once their life-changing events are behind them. What can advisors do to reverse this trend?
Kingsbury: I believe the best way to reverse this trend is to be a truly couple-friendly advisor when working with partners. A couple-friendly advisor engages both partners in meetings, helps the couple talk openly about financial differences and works to develop a financial plan and investment strategy that truly factors in all parties, even if one of them is not as financially literate as the other one. By engaging both partners from the beginning of the relationship, it increases the likelihood that the female will stick with the advisor if there are any changes in status since she has been part of the process and experienced the benefit first-hand. Also, when well-intended outside parties such as adult children and caring friends try to convince her to move assets or make investments, a woman who has a good working relationship with her advisor is more likely to speak with him or her about it before making any decisions.
More information about Kingsbury is available at www.kbkwealthconnection.com.
