The dangers of not including spouses in financial planning

For most of their 33 years of marriage, Laurelea Conrad, owner of the Toronto-based graphic design firm Conrad Ferguson and Associates, was happy to let her husband, Steve Ferguson, deal with the couple’s retirement investment decisions.

Since Mr. Ferguson was a financial adviser and tax consultant, she said, “I knew he had the skills and knowledge to take care of our finances.” And while her creative roles at advertising companies such as Hill and Knowlton and Burson-Marsteller kept her busy, she added, “I was on a need-to-know basis.”

It was only after meeting financial planner Rona Birenbaum through a networking group that she began to question that strategy. “I thought, ‘Steve knows everything and I know nothing,’” she said. “What happens if he gets run over by a bus? What am I going to do?”

It took two years to persuade her husband to agree to a joint meeting with Ms. Birenbaum, owner of Toronto-based Caring for Clients. “They did a complete overview and a retirement plan,” Ms. Conrad said. “Everything was in alignment with what Steve had been doing, but for the first time, I was there, included.”

When Mr. Ferguson was subsequently diagnosed with advanced cancer, it was a relief to have Ms. Birenbaum on board. “I cannot tell you how thankful I was that she was there.”

While attitudes are changing, for many married couples, especially baby boomers, the husband assumes responsibility of the family finances by default.

Ms. Birenbaum said, “I find that women are sometimes not involved, either because they are really not interested, and they have confidence in their spouse’s ability to deal with all this stuff, or their spouse wants to be in control and is really not drawing them into that part of their lives.”

For Ms. Birenbaum, Ms. Conrad’s example is telling.

“If the male partner is the one leading the charge and managing the money,” she said, “and he is taken out of the picture by death, divorce or illness, the other partner is going to be like a fish out of water.

“So having some involvement is the sensible and prudent thing to do. It makes them less vulnerable at what would be a very vulnerable time.”

What’s more, in a largely male-dominated industry, some financial advisers don’t make the effort to include women in planning decisions, even though, statistically speaking, they will outlive their husbands by five to 10 years.

But that, too, is changing. “When we are dealing with just one individual, we are only getting one side of the story of what the actual family goals and guidelines are,” said Crystal Wong, a senior financial planner with TD Wealth in Victoria.

The earlier women become involved in financial planning, the better, she added. Often, couples have “very different ideas about it – about how to save, what their goals are, and what retirement looks like.”

As a result, she said, “We always encourage the attendance of both parties during that initial discovery process.”

Open and honest talk about goals and financial priorities can also enhance the couple’s relationship and defuse conflict, Ms. Birenbaum said.

“Financial decision-making is really life planning,” she said. “Money is a tool to live a lifestyle, both in the here and now and to make things happen in the future.”

Ms. Birenbaum has also found that women are as likely to understand finances, market risk and return on investment as well as their male partners. “There is very little difference between men and women in terms of how they approach the information, perceive the information and deal with the information,” she said.

Similarly, women are no more or less risk-averse than men, she said.

“I have found that people are either comfortable taking risks or they’re not, and it isn’t gender-specific. That’s why when I read those articles about how women are different investors, that they are less risky, I always bristle because I just don’t see it. I don’t find that the generalizations are particularly helpful, because they further a stereotype.”

How couples deal with money issues often reflects their relationship in general. “People either approach it as a partnership or they remain very separate.”

Nowadays, she said, younger couples are seeking joint financial planning advice even before marriage.

“They are coming in and they are saying, ‘We should figure this stuff out. How we are going to look at our finances and our money management and our investment strategy as a couple?’”

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