Why couples have trouble saying “I do” to financial planning

July 26, 2011
Brennan and Christine Sweet of Montclair, New Jersey, make beautiful music together, literally. He’s a violinist and associate concertmaster with the N.J. Symphony Orchestra, while she plays cello and teaches high school orchestra; next month, they celebrate their 20th wedding anniversary. But mention financial planning, and the Sweets admit they need some tuning up.

The Sweets showed moxie compared to the majority of couples, however, and sat down together earlier this month with a financial planner. The picture is less harmonious for other couples, according to a new study released by the Principal Financial Group and conducted by Harris Interactive. Surveying more than 600 financial advisers, they found 82 percent of couples in financial planning have one spouse that doesn’t want to be involved.

As for why, experts say it’s like that classic reply to “How do I love thee?” That is, let them count the ways marrieds avoid the topic like the plague.

“Some of the biggest contributing factors are procrastination, complacency and just fear,” said Timothy Minard, a senior vice president at Principal. “And clients tend to stretch the truth when asked, ‘Do you live within your means?'”

When the Sweets sat down with Eve Kaplan, a certified financial planner and principal of Kaplan Financial Advisors in Berkeley Heights, New Jersey, she got their attention by listening to and validating both of their points of view. (Brennan is the numbers guy; Christine is an intuitive, global-view gal.)

“She had each of us talk separately, and the other didn’t say a word,” Brennan said.  “She was very holistic in her approach. She really got us to listen to each other,” Christine added.

“It’s very important that both spouses have enough time and space to tell me what’s important to them about money and themselves,” said Kaplan, a fee-only planner. That way, “they become emotionally engaged in the various goals couples have together.”

Plenty of Americans are coping with financial overload, said Jean Chatzky, a New York-based financial expert and author of “Money 911” (Harper). She asked Principal to address spouses and financial planning because of the avoidance issue. “If I ever have to deal with tech in my household… I hand it off to my husband or a professional, and a lot of people feel the same about their finances. But while you can live without your iPod, the same just isn’t true of money,” she said.

The survey supports what Fidelity Investments found in its 2011 Couples Retirement Survey: only 41 percent of couples make retirement investment decisions jointly, with only 17 percent “completely confident” that either spouse is prepared to assume responsibility of joint retirement finances. Likewise, a State Farm survey released last week found that while 81 percent of adults say having a back-up plan is “very important,” only 45 percent say they’ve actually planned ahead and are ready to weather a life crisis.

Money and marriage issues can get so knotty that financial planner Susan Zimmerman went back to grad school for psychology after seven years of advising. She’s now a chartered financial consultant and a licensed marriage and family therapist as well. “So many folks never realize that money is such a complicated subject,” said Zimmerman. “There’s almost an underlying feeling that it will take care of itself, or that if I make enough, everything will be fine. And that simply isn’t the case.”

Zimmerman operates Mindful Asset Planning with her husband in Apple Valley, Minnesota, concentrating on financial counseling that also includes doses of marriage counseling, if need be. The worst circumstances, she said, occur when widowed spouses must take on the financial responsibilities, with no clue where to start.

“That’s a terrible time to catch up with everything,” Zimmerman said. “In the early stages of grief, you can’t process and think optimally. So if you thrust foreign material at someone at a time like that, they’re not able to make a whole lot of decisions. I’ve seen it with widows and even widowers. It all feels extremely overwhelming.”

Because financial issues can intimidate happy, healthy couples, advisers at Wells Fargo Advisors use “Envision cards” at client meetings, printed on bright card stock. Each contains a word or phrase such as “RISK” or “ESTATE PLANS.” It might sound simplistic, but clients appreciate how the cards break financial issues into broad categories.

“Everyone in our industry is struggling with why don’t people plan,” said Karen Wimbish, director of retail retirement for Wells Fargo in Charlotte, North Carolina. “It’s (likely) that the person most involved in the investment accounts is doing the plan, and the other spouse may not even know there is a plan.”

As for the Sweets, only time will tell if they tackle the next round of matrimonial money management. As Kaplan observes, “Making and keeping an appointment to see a planner is already a hugely positive step. Some folks never will take that step. And those folks, regardless of their income and net worth, are the unfortunate people who run the risk of outliving their assets.”

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I am curious about the 82% statistic. Was it the financial advisers who reported if one member of the couple was not interested in the financial planning or was it the clients themselves who self identified? I want to use this statistic in a book but want to make sure I understand it fully.

Thanks. Interesting article.
Kathleen Burns Kingsbury

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