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Thought Leadership in Action

Things All Financial Advisors Should Keep In Mind

Money management can seem pretty straightforward — customers set goals, and financial advisors help them meet those goals. But things aren’t always so simple. Emotions, family situations and the client’s financial standing can pose challenges for financial advisors if they’re not prepared.

“Every individual is unique, and makes decisions about investing and wealth management influenced by their emotional makeup,” says wealth management adviser Chris White. “Financial advisors need to understand the emotional factors that drive their clients’ behavior, and their attitudes about risk-taking and money management. If they do, they will be better able to fashion wealth management plans that are suited to an individual client’s personality, temperament and risk-tolerance.”

Here are some things to keep in mind.

Plan for a Solo Life, as Well as Marriage

Married couples who start financial planning generally don’t give any consideration to the chance of divorce, even as a remote contingency, says registered investment advisor Rosemary Frank. But with divorce rates for people over 55 doubling over the past 20 years, it’s important to consider because people who get divorced could end up with half the savings they thought they had. “One solution, without even mentioning the ‘D’ word, is to plan as a couple and plan as individuals,” Frank says.

While that approach is unusual for many financial planners, it’s important to help each person plan for their own future, she says. In addition, it’s important to remember that a divorce can affect an investment advisor’s income if one of the exes feels like their concerns weren’t addressed and finds another advisor, Frank says.

Address Women’s Issues

Married women tend to outlive their husbands, but that issue is seldom addressed, says Dan Thompson, founder of Wise Money Tools, which provides information about financial planning. “Concerns include having enough money, assets or life insurance to provide for the surviving spouse’s income and lifestyle needs,” he says. “It’s also important that she gets more involved in the family finances if she isn’t already.” Many women are surprised by how little they know about finances when the time comes for them to manage on their own, he says.

Recognize Millennials’ Special Challenges

People should start investing when they’re young, but those in their 20s and 30s are facing their own challenges to financial planning. “Many of the jobs they are taking are relatively low-paying, and many millennials have significant college loans to pay back as well,” says Clifford Caplan, a financial planner with Neponset Valley Financial Partners. “As a result, many graduates are living with their parents to minimize their living expenses. Married graduates are often delaying having children and purchasing a home as a result of the financial burden of paying off large and long-lasting college loans.”

Establish Savings for Nonworking Spouses

Even nonworking spouses should find a way to sock money away. A spouse who isn’t working should consider at least a traditional or Roth IRA to establish an investment foundation, says Michael Shea, a financial advisor with Applied Capital, a registered investment advisory firm.  “This can be a great way to increase retirement savings,” Shea says.


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