Including the Non-financial Spouse in Discussions Can Improve Outcomes for Both Spouses
Disengagement on the Spectrum
Prior to starting Lumiant, at a certain point in my career as an advisor a fact about the financial planning profession became very clear to me: The current tech stack only serves 50% of our customer base or less, if you really think about how many clients are proficient in the language of advice.
Speaking from experience, as an advisor you create a risk profile and share it with the client, then the financial spouse reviews it, then you share an investment proposal, and who reviews that? Ah yes, the same financial spouse.
The non-financial spouse is ignored. Advisors have been taking the easy way out by only gearing the dialogue toward the spouse that makes the most money, or the one they perceive as more financially literate and engaged in the process.
Because men have historically been tasked with managing the finances of their households, this means that women and people who are seen as not “financially oriented” are getting left out of the financial planning experience. That should concern all financial service professionals. So, what should we do about it?
One solution is to design platforms that allow the non-financial spouse to engage easily in the planning experience. In order to do that, first we must gain a better understanding of who they are as people.
Different People, Different Motivators
Likely more than half of the people who come to advisors for their services aren’t motivated by the minutiae of portfolio performance, the market environment, macroeconomic conditions, checklists and spreadsheets.
That’s in part because this approach still strongly anchors the conversation with the client in an investment experience, as opposed to a truly collaborative discussion about what’s important to both individuals and what should be in their financial plan to help them achieve their goals.
Different people are motivated by completely different things. If the plan isn’t purpose-driven for clients, they will not understand how it can drive them to their goals and it will likely leave out clients who are not fluent in investment jargon.
The Advice Engagement Gap
Advisors must discover their clients’ values and goals. In the case of women with spouses, we often see an overbearing partner or one voice that tends to dominate the conversation. We also see many advisors who are accustomed to conversing with the primary person on the account, inadvertently leaving spouses, partners, family members and children out even when they’re in the same room.
Various elements of the planning process will interest certain people more than others, based on their individual personalities and life experiences. For example, some spouses are eager to dive into the minutiae while others focus on the big picture. As the advisor, it’s your job to understand each of your clients’ needs well enough to tailor your services accordingly.
It Is Women, but It’s Not Just Women
According to US Bank research, women are getting more engaged in their finances, but there is still a significant gap when compared to their male counterparts. Also, half of women say their advisor can’t connect with them. These are sobering statistics that need to change if we are to make financial planning the noble profession it ought to be.
But it’s not just women. People of all different backgrounds, experiences and perspectives come to financial advisors for support to meet their needs and help them understand what to do with their money because they don’t know.
Therefore we must learn to speak the language of our clients, learn from our past mistakes that left many people out of the conversation and learn to stop using exclusionary jargon. Unintentional or not, it’s our job to make the process interesting and engage them, even if we think they initially seem uninterested in the process.
How to Engage Non-financial Spouses
To engage the disengaged spouse, advisors must lead by seeking to understand what drives those particular people in life. This way advisors can help those clients make the right financial decisions.
That doesn’t mean starting with questions like, “When do you want to retire?” It means starting with open questions about their values and what matters to them, bridging the gap between what’s important to each client and how financial advice can bring them closer to their best life.
To create an extraordinary financial planning experience for both spouses, we must stop thinking of the disengaged spouse as an extension of the “real client” and start talking to each spouse as distinct individuals, about what is truly important to each of them.
Why We as an Industry Need to Fix This Issue
Not only is engaging both spouses and all clients in the financial planning process the right thing to do – it’s good business, helping create advisor-client relationships that last through significant life events like divorce and spousal death, as well as through multiple generations.
Women are twice as likely to make a referral for your business than men and 2.5 times more likely to share their experience with friends and family. Advisors need to alter their client experience model to place the non-financial spouse at its heart.
Though change won’t happen overnight, meeting the more disengaged party where they are will ultimately lead to more non-financial clients feeling the full benefits and rewards of the advice process, while truly serving with our best possible foot forward.