Suddenly Single: How to Plan with Female Clients

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“How does it feel? To be on your own?” — Bob Dylan, “Like A Rolling Stone”

We all start out single, and most women, whether they marry or not, will end up that way. About half of all US marriages fail, and 11 million of the 13 million widowed spouses in the United States are women. That’s more than 80%. So the odds are pretty good that even a married woman will find herself single one day.

My calculation is that 90% of married women will end up needing to manage their own
finances at some point due to divorce or widowhood.

Although 40% of US women over age 65 are widows, widowhood isn’t just for senior women: In any given year, half of all US women who become widows are under 59. Since their average life expectancy is 79, US women can thus expect to manage their finances by themselves for at least two decades if they don’t remarry.

Most of us grew up with the fairytale assumption that we would marry for life, buy a house, have kids, and live happily ever after. Unfortunately, when it comes to financial competence, those stories aren’t serving us well.

So what can we as investment advisers do about it?

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1. This is about risk and opportunity.

The risk? Existing female clients who become suddenly single might also become suddenly former clients.

As Thomas Coyle wrote:

“That women leave their advisors on the demise — through death or divorce — of their marriages at a head-spinning rate is one of the starkest truisms in wealth management. According to the marketing consultancy Iris, 80% of women leave their financial advisors after losing a spouse.”

The opportunity? There are millions of women who are about to control more money who are somebody else’s clients.

Emma L. Smith and Jessica A. McHugh observed:

“In just two short years, women are projected to control two-thirds of private wealth in the United States. Investment advisors, the majority of which are men, cannot afford to be complacent about women and their investing needs. On average, women live four-to-seven years longer than men, and studies show that 70% of new widows fire their financial advisors. It seems like an obvious opportunity.”

A few weeks ago, I received a “Dear Barbara” email that illustrates the opportunity that opens up when a client has a radical shift in life circumstances:

“I am hoping you might remember me from quite a few years ago when my husband and I were clients of yours at [Company X]. Well — nothing in life stays the same. Bob died and now I am looking for a different wealth management company more suited to looking after me and my money. From underwhelming portfolio performance over the years to the company having been bought by a bank and the subsequent poor service, I would like to move on. The whole wealth management scene is confusing to me now. Coupled with being 81 and having some health problems, I am feeling overwhelmed.”

We had a good meeting, and in this case, I acquired a new client. But I have also been on the other side of the coin. After many happy years of working with another very wealthy couple, when the husband died, I was soon fired by the wife. She mentioned that a nice young man from an insurance company had been spending time with her, having tea, and offering her “straightforward investment advice.” Under the guise of simplicity, he had convinced her to lock all of her wealth into an annuity amid the lowest interest rates in history. I learned the hard way that some widows can be victims of clever salespeople with great personalities.

One adviser’s loss is another adviser’s gain. But either way, in situations of divorce or death, there is definitely risk and opportunity.

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2. This is about fiduciary duty.

Helping our clients plan to manage their finances through the loss of their spouse is a critical part of our role as investment advisers.

Erin O’Brien, CFA, is a portfolio manager with Cumberland Private Wealth Management in Toronto. O’Brien helps women in the before, during, and after stages of divorce: every step of the way. Many of her female clients refer their friends to her. The reason? “Maybe it is because I always approach my job as a ‘life adviser’ rather than an investment adviser,” she says.

I invited some of her female clients to participate in a “Suddenly Single: Four Divorces and a Funeral” focus group — over margaritas, of course. The big question: What would they advise other women to do if they became single?

Their collective top tip:

Take the time to understand your financial situation. Before you get divorced. Before your spouse dies. As one woman said, “I really, really regret not learning about finance before my husband died . . . I was too busy with kids and the household stuff.”

According to Merrill Lynch/Age Wave research:

“Men and women who prepare for losing a spouse fare much better in terms of stress and grieving, but a full 53% of current widows and widowers say they had no plan in place for what to do if one of them died. . . Only 14% of widows and widowers say they were making financial decisions by themselves before their spouse died . . . but once they are widowed, the overwhelming majority — 86% — report having to do so.”

We need to make sure that all of our female clients know how they can
bank on themselves. But how?

As fiduciaries, we tell our clients to look at their statements, learn the basics of investing, and have a plan. The problem is that not all of our clients listen. We don’t need advice on what to say; we need techniques to get those who aren’t listening to start.

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How can we convince our female clients that planning to live alone really matters?

All clients seem to enjoy talking about preparing for happy retirements. After all, retirement seems dreamy and romantic in the ads with older couples on their yachts and motorcycles.

But planning to be single? That’s the opposite of dreamy and romantic: It’s more like nightmarish and depressing. Although it might not be as fun a conversation, it is arguably much more important.

Consider a similar dilemma from the realm of medicine.

The number of new diagnoses of Type 2 diabetes in the United States climbed each year for two decades. Until 2009. Why were there more diagnoses? Because doctors met with patients and told them if they didn’t eat better, exercise more, and lose weight, they risked getting diabetes. And patients ignored them. But since 2009, new cases have declined by 35%! What changed?

According to one theory, around 2010, the American Diabetes Association created a new medical condition/diagnosis: prediabetes. Now doctors met with patients and told them they had a disease — prediabetes — and needed to eat better, exercise more, and lose weight.

What the patient needed to do didn’t change — instead doctors had a new technique to explain why they needed to do it. And it looks to be working: That 35% reduction translates into hundreds of thousands of fewer cases of full diabetes per year.

What might a similar planning-to-be-single approach accomplish in the realm of finance? It certainly can’t be worse than the status quo.

According to a 2019 global UBS study, many women learn the costs of failing to take an active role in their financial affairs only after their marriages end:

“Some widows and divorcees were disappointed to discover hidden debt and inadequate savings that compromised their lifestyle. With the wisdom of hindsight, 98% of US women urge other women to take a more active role in their finances.”

Let’s trust what 98% of women are saying. What if we focused more on discussions about life and love in the context of overall financial planning? What if we were to assume that every one of our married female clients will become single one day and talk about this as part of our fiduciary duty?

“Planning to Be Single” with Female Clients: A Five-Step Approach

1. Explore her situation.

  • Is the client’s spouse in good health? Do they take vacations together? What are their interests?
  • Discuss the statistics and reach an understanding of how she feels about the idea of being alone.
  • Talk about her fears.

Income insecurity is a common worry, especially for women. Investment Executive highlighted key findings from a women’s lifestyles poll:

“Nearly one-quarter (24%) say they wouldn’t be able to maintain their financial situations if their spouses or partners were to pass away, a figure that’s significantly higher among women 45–54 than women over the age of 65 (30% versus 14%), potentially reflecting greater financial responsibilities at midlife. Additionally, one-third of women aren’t confident that they’ll be able to afford their preferred lifestyle during retirement.”

2. Make it personal.

If our
client was to become suddenly single, what would the implications be?

  • On her family? On her career?
  • On her financial situation? On her life?
  • What could go wrong? What could go right?

My global
research has shown that women would welcome this type of personal interaction. Women want banks and investment firms to help
both themselves and their families make talking about money just a part of
regular life.

Here is the closing sentence from the “Dear Barbara” email I received a few weeks ago:

“I think I can do better, particularly for my daughter and heir, and I’m hoping you might have a suggestion or two about how I can acquire more financial knowledge.”

And when parents become single, remember that daughters are the rising wealth influencers. Care for elderly parents disproportionately falls to daughters, and increasingly, managing their parents’ investments is becoming a part of “daughter care.”

What if our clients became financially knowledgeable and confident today and became better financial role models for their daughters going forward?

3. Review potential outcomes.

What are the possible considerations if our client became suddenly single?

  • Would she have to sell her house?
  • Would she need to change jobs?
  • What would that look like in terms of her overall financial situation?

What needs to happen to have her feel comfortable with the idea of becoming single? How can we help her worry less about what would happen if she ends up alone?

A financial plan is an excellent tool to use for these types of discussion. Run a wide variety of scenarios using a wide variety of input assumptions. Talk about the numbers in great detail but in the context of her life and her unique preferences.

4. Discuss actions.

“The first step toward change is awareness. The second step is acceptance.” — Nathaniel Branden

  • What can we do today to ensure that our client will be in the best situation possible if she becomes single?
  • How can we work together to enhance her current level of financial knowledge and confidence if this is what is needed?
  • Commit to an action plan — maximize her involvement in all financial decisions today and moving forward.
  • Incorporate the “suddenly single” scenario into her financial plan.

Merrill Lynch/Age Wave research
found that 77% of the widows and widowers they interviewed said they discovered
courage they never knew they had. “They’re forced to jump into complex
financial matters from the start of their journey and adjust to making
financial decisions alone,” said Lisa Margeson, head of retirement client
experience and communications at Bank of America Merrill Lynch, in a companion
interview to the survey. “In fact, 72% say they now consider themselves more
financially savvy than other people their age, and that is empowering.”

Helping our female clients more capably manage their finances after the loss of their spouse can pay off — not just in the short term during the transition, but also in the longer term by building knowledge and confidence.

5. Be open to revisions.

After the death or divorce of a spouse, lives can change faster than anyone might imagine. When lives change, financial plans change. Be open to revisions.

Last August, in “For Humans Only: Five Tips for Outstanding Customer Service,” I wrote:

“Every time you answer a client’s question, think about how your advice adds value. Give them something that is thoughtful and thorough — a deeper reply than if they had asked a robot. What are you offering as your ‘Value over Robot?’”

All five of these steps give advisers the perfect opportunity to provide value over robot.

Three Things Not to Do When Communicating with Female Clients

1. Don’t lecture.

Telling the average woman that she “should” learn more, invest more — this will only make her feel overwhelmed. She can’t imagine adding one more task to her daily to-do list. The word “should” ought to be banished from every adviser’s vocabulary.

2. Don’t judge.

The idea of becoming suddenly single is fraught with emotion, and each individual has their own reaction to the planning discussion. Even when we are given the best possible advice, some of us will choose to ignore it.

3. Don’t make assumptions.

Stay as far away from stereotypes as possible. Believe it or not, some people might feel relieved or possibly even happy after they divorce or after their spouse dies. Kate Chopin’s “The Story of an Hour” is a fascinating read:

“And yet she had loved him — sometimes. Often she had not. What did it matter! What could love, the unsolved mystery, count for in the face of this possession of self-assertion which she suddenly recognized as the strongest impulse of her being! ‘Free! Body and soul free!’ she kept whispering.”

The bottom line? Help your married female clients plan on being single. Whether they like it or not, 90% of them will be at some point in their adult lives.

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

Image credit: Getty Images/simarik


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Barbara Stewart, CFA

Barbara Stewart, CFA, is a researcher and author on the issue of women and finance. She released the ninth installment of her “Rich Thinking” series of monographs on International Women’s Day, 8 March 2019. Stewart uses her proprietary research skills to work as an Executive Interviewer on a project basis for global financial institutions seeking to gain a deeper understanding of their key stakeholders, both women and men. She is a frequent interview guest on TV, radio, and print, and she is a columnist for Golden Girl Finance. Stewart is on the Advisory Board for Kensington Capital Partners Limited in Toronto. All of Stewart’s research is available on Barbara Stewart.



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