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Aim for Equality When Planning for Spouses

Help women clients take a more active role in their financial affairs.

By Jamie Hopkins and Marguerita Cheng

As an advisor, you take care of your clients and develop a plan that fits their needs. It’s a straightforward approach, but one that gets more complex when a spouse or “better half” enters the picture. While working with a couple seems like it should be intuitive—the advisor plans for both individuals, right?—one spouse usually gets the short end of the stick.

More often than not, the underserved spouse in heterosexual couples ends up being the woman.

Working with both spouses can be challenging as one spouse often drives and dominates the planning discussions. But advisors have to work to include both spouses— especially as we highlight some of the upcoming trends and issues that will impact women.

The Great Wealth Transfer

The great wealth transfer of nearly $30 trillion in the next 30 years includes more than the money moving between generations—it includes the money moving between spouses, often from male to female. From 2010 to 2015, women’s wealth in the United States grew from 28% to 30% and is expected to hit 32% by 2020 and continue over the next few decades.

Despite this tremendous wealth shift predicted from men to women in the United States, only 22% of women have a wealth transfer plan in placea serious lack of planning.

Sharing the Responsibility

The reality is that spouses aren’t sharing in the financial decision-making process. Nearly 80% of women say they share financial decisions with their spouse, but only 20% say they are the primary decision-maker. Comparatively, 35% of men say they share their financial decisions with their spouse, and roughly 65% say they’re the primary decision-maker.

While men tend to take on more of the financial responsibility, it’s important to note almost no one said they weren’t involved at all with financial decisions—both spouses are involved on some level. So why do 46% of widows leave their financial advisor within a year after the death of their spouse?  

Men who become widowers are more likely than women to keep their financial advisor, adding fuel to the belief advisors gear their planning and attention to the male spouse. Advisors often haven’t created enough value or established a trusting relationship with the female spouse to sustain working together.

Retirement Issues

Women face a number of retirement challenges that men don’t face and tend to enter retirement with more concern about their financial securityand for good reason.

Women have lower retirement savings than men, due in large part to the fact that they earn 18% less on average. In turn, this leads to women having lower confidence in their retirement than men—roughly 45% of women lack confidence about their retirement as opposed to 32% of men.

This is concerning because women are 80% more likely than men to be impoverished at age 65 and older. And women between the ages of 75 and 79 are three times more likely than men to be living in poverty.

This causes a great amount of reliance on Social Security—as it accounts for 90% or more of the income received by nearly half of unmarried women, including widows, ages 65 and older.

Advisors have the responsibility to prepare women and couples for these financial challenges, as women will assume more responsibility for their wealth and are looking for more advice and recognition in the planning process. The value of comprehensive and holistic planning can’t be overlooked.

Now, these are all averages and statistics—not the real people behind the numbers. But, they paint a jolting financial reality for women that emphasizes the importance of advisors—a different reality than many advisors expected.

I often hear advisors say they want to be the advisor for the life of their clients. That situation isn’t realistic as we know many widows leave their advisors, and only 13% of women over age 85 are still married.

At this point, advisors need to step up and include both spouses in the planning process and make sure everyone is comfortable with the recommendations and planning. Start by having the two individuals complete goals and risk tolerance questionnaires independently. This will enable you to track each individual. Any surveys or follow-up questionnaires sent to the household should also be sent to both individuals.

Ultimately, you have one couple and one retirement goal, but you have two distinct individuals with different wants and needs. Truly unique planning, as many advisors claim to offer, requires consideration of both people.


Jamie Hopkins is the director of retirement research for Carson Group, and Rita Cheng is the CEO of Blue Ocean Global Wealth.

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