As all advisors know, it’s one thing to provide clients with appropriate advice and another thing to actually get them to follow that advice. That’s especially the case when clients experience short-term market fluctuations, have troubling conversations with their peers, engage in too much CNBC watching or fall prey to intrafamily disputes over money.
In this series of reports, Investment Advisor columnist and psychotherapist Olivia Mellan and financial behavior specialist Kol Birke of Commonwealth Financial Network address some common scenarios that advisors face in getting their clients to follow through on their advice. This advice for advisors flowed out of a web seminar hosted by Investment Advisor and ThinkAdvisor editor Jamie Green late last year.
What should you do when the spouse who is your primary client contact fades out of the picture due to divorce, death or disability? More accurately, what should you have done earlier to keep the second spouse connected?
Scenario 2: The Missing Spouse
Jamie Green: This scenario involves a client couple of long standing. In the past, the husband always came to meetings without his wife. When you finally convinced him to bring her to your office, you realized from his behavior that he has cognitive issues. Now his wife is not only clueless about the plan you’ve built without her input, but she also has to deal with her husband’s mental problems. What should you have done?
Kol Birke: I really believe in bringing both spouses into the office whenever possible. This allows you to witness the dynamic between them when different financial topics come up, so you can see whether or not they’re on the same page. It also allows you to start connecting with a spouse who might not play as big a role in the financial planning relationship.
Whenever you’re working with a couple, I would suggest visualizing a line between you and the first spouse and you and the other spouse. Which line is stronger? Is there a way to balance them equally? For example, if you meet with one spouse and not the other, maybe you can send them both an email or letter outlining what you discussed. Specifically target the non-present spouse to let them know that you really care about them being involved. Always balance that triangle.
Specific to cognitive problems, some advisors make it their policy to insist on having a POA — a power of attorney — in place for all clients. It may seem awkward to require this, but if it’s your default position, it has a ton of strength to it. That’s because when people have a decision that’s super-hard to make, many of them will just go with the default. For example, in some countries where being an organ donor is the default, more than 99% of drivers are organ donors. In the U.S., where you have to make a choice to be an organ donor, only around 25% of drivers are organ donors. If your default position is that everyone should have a POA, or everyone should have a long-term care plan, or everyone should have a contingency fund, your clients will tend to go along with it. You won’t get 100% compliance, but you’ll do much better than if you hadn’t set that default.
Olivia Mellan: The most important thing with a client couple, as Kol mentioned, is to meet with both of them as soon as you can. If you see that the wife is disengaged or over-surrendered to her husband, or if there’s bad will between the two of them, I recommend following up with one-on-one meetings with each spouse. You may need to educate the wife that if her husband dies first, that’s the worst possible time for her to learn about their financial situation. I think it’s also important to educate the husband about the value of his wife being more empowered and more knowledgeable about money.
Second, I would explore the wife’s network of support with her. Mary Malgoire at the Family Firm has written a wonderful brochure to educate adult children about forming a sort of committee of support for a parent in need. The main thing is to keep communication clear and open and empathetic between all members of the family.
Going Deeper: Planning for Our Mental Decline
As time goes on, more and more of us will face issues with dementia, Alzheimer’s or other losses in functioning, so we have to do some thinking up front about how to handle this situation before it happens. The “network of support” means not just your family but also organizations. Who do you trust? If you find it harder to function, who would you like to be in your network of support?
When Bruce Feiler, who did “Walking the Bible” on PBS, was diagnosed with cancer, he asked some of his closest male friends to step in and support his young twin daughters if he was gone. The book he wrote about this, “The Council of Dads,” is really beautiful. Although his friends’ support was never needed, I think the process of creating this network was very powerful and helpful for him and his family.
- Read the original Investment Advisor column and the entire series of scenarios.
- Check out Investing and the Aging Brain: ‘What Do I Do When I Get Stupid?’ on ThinkAdvisor.