BALTIMORE — When a client is going through a divorce, planners need to think beyond dollars and cents.
“Never start with just the business, if you start with just the business, they think that’s all you care about,” Amy Florian, CEO of Corgenius, said at FPA’s annual conference. “You need to get better at talking to the person.”
While dividing up a couple’s assets is essential to the divorce process, experts agree that the way in which planners help clients achieve that goal is just as important.
“As financial advisers you’re trained in what to do with the money,” Florian said. “You’re not trained in how to talk to the person.”
When it comes to advising a client who is dealing with divorce, Mark Prendergast, director of tax strategies at Inspired Financial, said that advisers should act naturally. He said that his firm specializes in working with female clients who are coping with transitions such as working through a divorce or having recently been widowed.
“Divorce planning is financial planning,” Prendergast said. He explained that many of his clients maintain the narrow focus of seeking advice when faced with divorce, however, that is an opportunity for planners to secure these individuals as long-term clients. Therefore, advisers should look beyond the narrow focus of the divorce at hand.
One expert who agrees is Peggy Tracy, owner of Priority Planning. She said clients dealing with divorce have a tendency to stick around.
Quote“As financial advisers you’re trained in what to do with the money. You’re not trained in how to talk to the person.” — Amy Florian, Corgenius CEO
“There are issues that crop up year after year, up until five years after the divorce and someone thinks they are single, but in reality they’re still fighting their spouse for these payments that go on,” she said.
BUILD LONG-LASTING LOYALTY
Prendergast said advisers should gather information about all the assets and keep expectations of a short-term gain in check.
Clients who have been cheated on, for example, are thinking with a broken heart, rather than a level head, and they may demand all of the assets from their soon-to-be ex because they feel they were wronged or betrayed. However, an adviser can step in and provide the role of mediator with the long-term vision in mind.
“The rule about 50/50 is that both sides are unhappy,” he said. “They’re willing to walk away but nobody is happy.”
Despite an unhappy outcome in some of these cases, Prendergast believes that divorced clients are an important niche clientele that critically needs financial advice.
“Divorce is prevalent in our society,” he said.
With the right advice, they can become long-term clients.