December 18, 2013

Men Dominate Couples’ Advisor Relationships

Fidelity study finds less than half of couples interact jointly with their advisor

Men may be limiting their partner’s financial success without realizing it, a study released Tuesday by Fidelity found.

Just 42% of couples interact equally with their financial advisor, and men are 58% more likely to be the primary contact.

The 2013 Couples Retirement Study surveyed more than 800 couples who work with a financial advisor. Respondents were at least 25 years old and, if not married, in a long-term committed relationship living with their significant other.

Women, especially young women, were more than twice as likely as men to say they were not the primary contact in their advisor relationship. More than 30% of all women said their significant other drove the advisor relationship; 41% of Gen Y women agreed, compared with 33% of Gen X women and 28% of boomer women.

“Men reported that they are afraid of leaving their partners financially unprepared should they need to manage the finances themselves,” Jylanne Dunne, senior vice president of practice management and consulting for Fidelity Institutional Wealth Services, said in a statement. “What they may not realize is that by driving their households’ relationship with their financial advisors, they could be unintentionally turning this fear into reality. The good news is that there are simple steps couples can take to attempt to align their financial future and prepare for a smooth transition – and advisors can play a critical role in that process.”

According to Brian Nelson, vice president of practice management for National Financial, Fidelity’s clearing division, women aren’t unwilling to take the lead in their family’s financial strategy. Indeed, only 15% of women said they weren’t interested in interacting with their advisor.

“According to the study, women are interested in working with an advisor, but they say they hand over the reins because they trust their partner,” he said in a statement.

The study found 53% of women said trust in their significant other was their reason for letting them lead the relationship with their advisor. However, a third of women said it was because their partner had a personal relationship with their advisor.

“This may not only create instability for the family, but also for the advisor-client relationship," Nelson said. "While our study found that eight in 10 women do not intend to fire their advisor upon their partner’s death, when reality hits and there is no relationship in place, many do. An advisor’s bond with both members of a couple can be key to bridging this gap between intent and reality.”

Another reason men are taking the lead in financial relationships, inadvertently or not, is a lack of confidence in their partner’s ability to make sound financial decisions. More than half of women said they were confident their significant other could handle the responsibility, while just 43% of men agreed.

When asked about their own confidence in their ability to handle financial decisions, Fidelity found respondents’ concerns weren’t unwarranted. Just 45% of women said they were confident they could assume full financial control.

Interestingly, despite most respondents saying they communicate well on financial issues, the study found couples were more comfortable talking to their advisor about financial matters than they were talking to each other. Forty-three percent, in fact, said they would rather talk to their advisor about long-term planning issues, like retirement and estate planning and wills, than to their partner.

Women are less likely to be involved in long-term planning issues overall. Although the percentage of women who say they are the primary decision maker in long-term retirement decisions has doubled since 2011, just 19% of women said they fill this role. About a quarter said they were the primary decision maker for day-to-day financial decisions.

According to Fidelity, a good number of couples need help aligning their long-term goals. Almost 40% of pre-retiree couples disagree about what they want in retirement, and 36% don’t agree or haven’t talked about where they’ll live in retirement. Thirty percent don’t even agree on the primary beneficiary on life insurance and retirement accounts.

Advisors should pay especially close attention to female partners who don’t work. Those clients are significantly more likely to have financial concerns, the study found. Nonworking women were significantly more likely than working women to worry about building an emergency savings account and covering day-to-day expenses. Their biggest concern was saving for retirement, an issue 70% of nonworking women said they worried about, compared with 57% of working women.

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Read more on ThinkAdvisor about working with couples.

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