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Every financial advisor has a client or two who is impossible to forget. For Sybil Verch, it’s the couple who once visited her office ready to pick a fight – with each other.
The husband was the more aggressive investor, willing to take on higher levels of risk in their portfolio. Meanwhile, the wife was anxious about their finances, painstakingly crafting spreadsheets on her own and losing sleep.
Soon, they were bickering and yelling in front of Ms. Verch, who’s executive vice-president and head of private client solutions at Raymond James Ltd. in Vancouver.
“She’s crying, they’re fighting and I’m thinking, ‘Woah! This needs marital counselling, not a financial advisor,’” says the 30-year veteran of the industry who also produces and hosts the television talk show, The Wealthy Life.
But then Ms. Verch had a Eureka moment. Their problems seemed to stem from the wife’s fear they were heading for a cliff despite being financially secure. If Ms. Verch could just convince her they could invest money and still live well, perhaps there was hope.
She gave the clients an assignment to complete together – write down what they would do if they won a $20-million lottery.
She then showed them ways of hitting those common (and fun) goals without actually requiring a monumental windfall. For example, dreaming of buying a yacht? Maybe a cruise would fill that need. Want to travel the world? Rack up points on a credit card and get those flights covered by renting out the home while they’re away.
She also showed the couple, in writing, exactly how they would pay for their future together and where the money would come from. She pointed out the buffer in their portfolio gave them plenty of wiggle room, too.
“The wife cried in the office and it wasn’t sad tears,” Ms. Verch says, admitting the reaction made her emotional too. “She felt like a huge load had been lifted off her and it brought them closer together. They’re happily married today.”
Ms. Verch is one of many advisors who have found integral ways to mend romantic relationships despite financial incompatibility. Being a neutral person in the room while helping increase financial literacy can go a long way for couples.
According to a recent FP Canada survey, two in five people in relationships with shared finances argued regularly over money, but transparency and communication lead to less fighting.
It helps to dig a little deeper to find out what’s truly at the heart of the problem, as Ms. Verch found. Usually, it’s not the money exactly, but a deep emotional need that hasn’t been met.
“These couples are arguing over the symptoms, not the root cause,” says Erika Wasserman, a financial therapist in Miami.
She points to one couple who argued bitterly over the amount of food one kept buying. The fridge and pantry were overflowing but the wife still shopped, often draining their bank account. After asking questions about their childhoods, the super-spender revealed she grew up with food insecurity. Suddenly, it all made sense.
Why it’s important to engage both sides
Nathalie Richard, certified financial planner with Insight Wealth Management Inc. in Halifax, says about 90 per cent of couples she sees are unequal in terms of their financial literacy and engagement.
One steers the ship while the other’s along for the ride. Ms. Richard says it’s her job to treat them both equally and bring the less financially educated half up to speed or risk alienating that person even more.
“Sometimes, you act as a mediator and a psychologist to make sure that both parties actually are able to voice their opinions and concerns,” she says. “That is huge.”
Jeff Wu, certified financial planner with Sun Life Financial Investment Services (Canada) Inc. in Montreal, studied psychology in university before entering the financial services industry and says it makes sense to ensure both people feel secure and heard.
“Advisors should spend more time with the person who has less financial literacy so the couple can be on the same page when making financial decisions,” he says.
Knowledge is power and the more comfortable a person is with, say, building a portfolio or investing in education savings for their kids, the better and more informed decisions they can make.
To build rapport, Mr. Wu says he’s not afraid to talk about his own financial situation. Clients can feel he’s being authentic and reaching out on a human level. With that trust comes the willingness to open up themselves. Much of an advisor’s work revolves around these soft skills rather than which fund to pick.
“A lot of times, it’s really not about the technical stuff you can provide, but how much you connect with them in the first place,” Mr. Wu says.
Nevertheless, Jason Pereira, partner and senior financial consultant with Woodgate Financial Inc. in Toronto, says the “technical stuff” can sometimes lower the temperature in the room and bring everyone back to reality.
He points to several times when, despite having a savings plan in place, one person still felt insecure about their future. All he had to do was go over the numbers and offer some tough love.
“I’ve said, ‘Listen, I know you guys debate this stuff, but the honest truth is if you keep spending at the level you’re spending – you’re going to be just fine,’” he says. “There’s no witchcraft to this. It’s just math and decisions.”
Ms, Verch, for her part, has learned that to be an effective advisor you have to be comfortable about having very uncomfortable conversations with couples to keep them on track.
It’s about reminding them how to plan, dream and enjoy life, too. Money is, after all, just a means to an end.
“It’s all about finding common goals. That’s what keeps relationships strong and lets the love flourish,” she says. “Don’t let money get in the way of a good romance.”
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