You’ve heard me lament that women’s financial sophistication doesn’t seem to be improving. In a 2013 Allianz study, twice as many women as in 2006 (62% versus 35%) said they were interested in learning more about financial planning, retirement planning and investing. Yet 70% said financial information was hard to understand, compared with only 44% in 2006. It’s no wonder that women are twice as likely as men to report high or overwhelming levels of financial stress, according to Financial Finesse.
What we’ve got here, as Strother Martin told Paul Newman in “Cool Hand Luke,” is failure to communicate. Its consequences are shockingly apparent when women who relied on the financial savvy of others are all of a sudden on their own.
One advisor who focuses on helping this type of client is Barbara Shapiro, president of HMS Financial Group in Dedham, Mass. Besides holding CFP credentials, Shapiro is also a Certified Divorce Finance Analyst (CDFA). Reading an article she recently wrote for attorneys, “Dealing with the Financially Unsophisticated Spouse,” I realized that anyone who deals with divorcing or widowed clients needs to understand how to reach this audience.
Olivia Mellan: Are we mostly talking about women here?
Barbara Shapiro: Typically, yes, but anyone who has abdicated their financial responsibility to somebody else is the subject of my article—anyone who is now trying to make rational decisions without any information. This applies not only to divorce, but to anyone who needs to make financial decisions and doesn’t know where to start: widows, people who have inherited a lot of money. We try to educate everyone who walks in here, but people in the process of divorce have that extra layer of anxiety.
OM: What’s going on in these folks’ brains?
BS: Dr. Daniel Goleman, a psychologist, journalist and author of “Emotional Intelligence,” coined the phrase “amygdala hijack” for when a person’s inappropriate emotional response overrides their general intellectual functioning. That’s when they get that glazed-over, deer-in-the-headlights look we’ve all seen. My article focuses on how to deal with it.
OM: What’s your first step?
BS: The first step is to relax them so I can get a feel for their baseline comfort level. In our office we have lots of things that people can relate to like Disney cels, Red Sox memorabilia, model cars, baseball stadium models and Fazzino 3D pictures. Our focus is on helping the client relax and feel comfortable, so we spend a lot of time at the beginning chitchatting. When we feel they are ready to move on, we finally ask, “How can we help you?”
We never send preprinted questionnaires in advance. There are certain questions we want to ask, but we write things down the old-fashioned way. With divorcing clients, I don’t take any notes. It’s a way of trying to establish an interpersonal conversation.
OM: What have you learned about people’s attention span as far as integrating new information?
BS: The average attention span is about 45 minutes, but with these deer-in-the-headlights folks it’s much shorter. In client meetings, keep monitoring when they are saturated. Sometimes they’ll say, “I’ve had it,” but even if they don’t, their body language—fidgeting, looking around the room, etc.—makes it inordinately clear. You might revert then to casual chatting for a while, offer the client a soft drink or take a bathroom break.
If a couple comes in where both people are on board, you can accomplish a lot in one meeting. With someone who’s unsophisticated or frightened, I typically plan on taking three meetings to accomplish the same thing. It takes a lot of patience, educating and reassurance that financial expertise is not intuitive.
OM: Many women say learning about money is boring. They want information that’s simple to understand. Do you take this into account?
BS: I often tell clients that if they’ve run a household, it’s a lot like running a small business. There are certain things we need to communicate, but we use examples rather than just facts and figures. For instance, instead of talking about a 3% rate of inflation, I talk about seeing that the price of milk has gone up from $3.50 to $3.60.
OM: Tell me about what you call the “Circle of Support.”
BS: This is an arrangement with the client in the middle and all the professionals they may need around them. In a divorce situation, you might have a therapist, the attorney, a mortgage broker and the CDFA. This community of experts should interact among themselves for the benefit of the client. Obviously, the client gives them permission, but they function like a team. Each one will talk to the client about their specialty and will communicate on whatever level is necessary for the client to understand the choices they need to make.