As the old Frank Sinatra song goes, love and marriage go together like a horse and carriage, but when it comes to marriage, it’s not all about love 24/7. Squabbles about money see to that.
That’s further confirmation that registered investment advisors wear many hats and those can include psychologist and marriage counselor. Of course, many advisors aren’t schooled or trained in those particular pursuits so it’s best to leave “therapy sessions” with clients, including couples, to financial matters. Don’t worry. There’s plenty of work to be done on this front, but advisors should view it as opportunity to better connect with clients and much like a good marriage counselor, advisors that prove adept at “financial therapy” could well earn referral business.
As advisors know, the money issues between couples have been around, seemingly, forever and that’s not going to change. In fact, and this is compelling for advisors, some generations take money matters more seriously and can be more easily scorned by these issues than others.
With those factors and more in mind, advisors should take the time to evaluate the findings in Orion Advisor Solutions’ new Couples and Money Survey.
Key Survey Findings
Indeed, Orion’s Couples and Money Survey confirms what many advisors already know. Couples may well love each other, but there’s plenty of work to be done when it comes to discussing money and financial planning.
“The survey results also show more than a quarter (27%) say their relationship would be better if their partner would change something about the way they handle money, and one in five (21%) wish they had known more about their partners’ financial attitudes before committing to the relationship. A quarter (25%) of respondents have kept a purchase secret from their partner while nearly one in 10 (9%) have debts they’re keeping secret from their partners,” according to the study.
An interesting point revealed in the survey is that many couples aren’t quarreling about each other’s spending patterns, but a far too high percentage regularly argue about money, often doing about factors that are beyond their control.
“Twenty-eight percent of the surveyed investors have money-related disagreements with their partner at least monthly with 58% claiming they never have disagreements related to money. The data shows disagreements are related to fears about market risk and the economy (35% of disagreements) more often than personal spending philosophies. Nearly three in 10 respondents (29%) disagree about whether to spend for today or save for tomorrow,” adds Orion.
Believe it or not, there’s actually some good news above for advisors, particularly those with mastery of soft skills. For starters, the spending today/plan for tomorrow debate should focus on exactly what today’s expenditures are. Couples, particularly those with children, need to realize that college costs are escalating at a pace that far exceeds inflation and wage growth. Additionally, retirement planning, without the help of an advisor, can be treacherous, especially for couples that don’t have access to employer-sponsored plans. In other words, limiting frivolous indulgences can go a long way toward sowing the seeds of financial matrimonial harmony.
Helping couples navigate financial matters takes on an element of life coaching for advisors, but help is on the way.
“Financial advisors are gradually expanding their horizons as investment managers and are now having an even larger impact on clients’ lives in a role more similar to a life coach,” said Dr. Daniel Crosby, Chief Behavioral Officer at Orion. “A recent Accenture survey1 reveals half of the respondents (51%) already view their current advisor as a life coach and over nine in 10 (91%) respondents cited the importance of an advisor who ‘gets’ them as a person.”
The aforementioned help for advisors is Orion’s new behavioral finance tool called BeFi20, which is rooted in behavioral finance concepts such as bias, desires and fears. At its core, BeFi20 can help advisors give clients the tools they need to stop arguing about money and get on the same wavelength, financially speaking.
“The tool arms advisors and their clients with more personal insights and helps position the advisor as a mediator to facilitate better communication between feuding families,” concludes Orion.
Technology is never perfect, but BeFi20 could prove to be worth its weight in gold if it can help clients achieve more matrimonial bliss by avoiding money tiffs.