By Maura Copsey
For decades, the statistic that “fifty percent of all marriages end in divorce” has permeated American society. Today, that trend has decreased a bit thanks to a variety of factors, but divorce is still a very common and often complicated event, especially among older couples. For those who make the decision to divorce, the financial aspects can be some of the most challenging, and even more so for more established and wealthier individuals. That’s why we think it is wise for wealth management firms to have a Certified Divorce Financial Analyst (CDFA) on the team.
A CDFA is a financial professional certified to provide expertise on the financial issues associated with divorce. Wealth managers can earn the CDFA designation from the Institute for Divorce Financial Analysts after completing a rigorous course of study. The CDFA works as a part of the client’s divorce team of professionals and can provide financial advice ranging from pre-divorce planning though post-divorce financial management. Completing the study required for this certification takes commitment, but the benefits to firms and their clients can make the undertaking worthwhile.
For your clients, there are two primary benefits of having a CDFA as a part of the team. The largest help to clients is that there is someone who has the specific expertise they need who is already familiar with them and their financial situation. Divorce may bring up financial issues that many other financial professionals don’t often encounter. A CDFA has likely already dealt with these issues successfully and is ready to call upon that knowledge for another client’s benefit.
Secondly, a CDFA will be able to provide professional analysis and recommendations for a variety of financial matters. During a divorce, the client is potentially working through many stressful issues –like home ownership, custody questions, and emotional challenges. Having a certified divorce expert on the team helps to relieve the stress of the financial decisions and allows the client to spend emotional and mental energy on the other issues.
It’s not just clients who benefit from this added expertise. Most wealth management teams do not operate in a vacuum; there are attorneys and tax professionals who service your clients, and those paths will likely cross during divorces. Having a CDFA on your team is a valuable resource to those professionals when their clients are going through a divorce, and they will likely be relieved to know that someone they trust is helping guide their client’s finances through a tough situation.
Additionally, the benefits for your business may be significant. The most immediate impact is the opportunity to expand the client services. Divorce has the potential to last several months, and possibly even years—resulting in business outside the annual wealth management needs of a clientThe lasting impact is that the relationship built with a client during a contentious and complicated situation can provide a foundation for a long-term relationship that provides continuous revenue even when the client has hopefully moved on to happier times.
Relationships with clients are central to any firm's success. The ability to provide tailored support to our clients during a tough time, such as divorce, can helps build an even stronger relationship that pays dividends long after the event.
Maura Copsey is a CDFA and Partner with Nachman Norwood & Parrott.