The widow was long past the first stages of money management after her husband died, leaving her to raise her school-age children.
She was past ordering extra death certificates and changing the names on credit cards and other financial accounts. She was still at work and managing the household by supplementing her income with life insurance proceeds from her husband’s estate.
But her life was far from back to normal, said her financial adviser, Eve Kaplan, a fee-only financial planner. There were stock options to decide what to do with and just-discovered accounts that needed investment management. There was still college tuition to think about.
Kaplan has several clients who have gone through divorce or the death of a spouse and has learned that these arrangements often call for a different approach.
“I do a lot of hand-holding and am happy to do it,” she said. “Normally, all my client meetings are in my office, but I make exceptions. … This woman who lost her husband unexpectedly was just at a loss, so I’ve gone to her house on a regular basis to help go through the mail and deal with her accounts.
“It overlaps with more traditional bookkeeping services, but this is way more than issuing checks.”
As more financial advisers offer specialized services to clients who have lost a partner, it pays to check out what’s available and what is worth paying for, experts said.
“There’s a huge push now in financial services to pay attention to women,” said Nancy Fellinger, vice president for investments at Coburn & Meredith Inc., an advisory firm. More than ever, she said, clients in transition need to scrutinize credentials and consider potential advisers’ “time in the saddle.”
Getting beyond the perfunctory nod to some issues can be a challenge.
A survey of about 500 financial advisers presented this month in a webinar for the Retirement Income Industry Association found that 36 percent provide clients with a recommendation for claiming Social Security benefits, for example.
Though almost all advisers (92 percent) said they provide support for making decisions about Social Security, nearly two-thirds said they provide education or create potential claiming strategy scenarios without recommending a strategy, said Howard Schneider of Practical Perspectives, which conducted the survey with GDC Research.
“Clients want support in this area, and when you think about it, virtually everyone is impacted by Social Security and yet there’s very little frame of reference going into it,” Schneider said.
Advisers said many clients don’t want to hear about delaying benefits, because they fear cuts in the program, Schneider said, and many advisers simply aren’t aware of all the services available that can crunch the numbers and make recommendations. (There are free and relatively low-cost calculators available to the public).
Another important issue is planning for long-term care, which may now be more important than maintaining life insurance policies, Kaplan said.
For pre-retirees, she said, the most important financial planning tool may be priming the pay pump.
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For a client going through a divorce, Kaplan made an introduction to a career counselor to help the client boost her income and stretch the divorce settlement. Unfortunately, the counselor started giving the client financial advice, which Kaplan found to be unethical and confusing to the client.
There’s another key lesson there. Clients who are compromised by stress can often act on suggestions without considering the qualifications of the adviser or jump to wrong financial decisions, particularly when they are newly single, Kaplan said.
“Widows and divorcees are often very insecure and they rush to pay off the mortgage, but if they have a very low interest rate, that might not be a good idea,” she added as one example. “For me, it’s about knowing who to tap to look at critical things like long-term care, which they may need now more than ever. It’s also just about listening at a very emotional time. I’m not trying to pose as a therapist, but it’s important to listen to their concerns.”
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