Today we cringe when we watch an old-school movie where the traditional gender stereotypes are portrayed so blatantly, but the fact is that these stereotypes are still alive and well in personal financial planning.
Very often, a financial advisor will work exclusively with the husband, with all finances, life insurance policies and even a last will and testament focused only on him. While this might sound prudent in light of the statistical fact that women outlast men, it often leaves women in the lurch, with no knowledge of their partner’s finances and very little experience in managing the household finances.
To be fair, neither the financial advisor nor the husband wants to intentionally exclude the spouse from the planning and administration. It often “just happens” that the husband focuses on the money matters, while the wife takes up the role of homemaker.
In instances where the wife also works, she will often use her income for immediate or regular expenses and again entrust the life savings and long-term planning to her husband. It is unfortunately still the case that many women earn less than their male counterparts.
To exacerbate the problem, many women who still have the primary responsibility of homemaker, will opt for part-time or contract work, which often pays less and is unlikely to carry any retirement benefits.
The fact that women often earn less than men also means that the financial industry, and commission-driven financial planners, prefer to focus on the husband as it is a more profitable commercial relationship.
We strongly advise our clients to view their financial planning as a couple’s activity. This does not necessarily mean that all responsibilities in relation to a family’s finances should be shared, but it does mean that the couple should have a regular “money conversation” and that both spouses should be fully aware of their investment, life insurance and related plans.
For men who have traditionally taken full responsibility of the finances, a regular money conversation might feel like an unnecessary hassle. Many men also report that their wives have little interest in the complexities of retirement and financial planning.
Regardless of where the push-back comes from, it is recommended that the partners push through this initial resistance. Most long-term planning is frustrating, but it is infinitely less frustrating than the effort of trying to sort out your deceased partner’s accounts.
Sharing the responsibility of planning for your financial future is even more important if the husband owns his own business or has business partners. Stories abound of how a husband left his shares in a business to his wife, only to have the business partners exclude the widow from future profits by moving expenses around or simply hiding the income in complex financial structures.
As always, a competent and certified financial planner holding CFP accreditation and is who truly independent can be your saving grace. A CFP-certified planner don’t only help partners plan for their future, but also help them have these difficult conversations in a professional and constructive manner.