For married clients, combining two separate financial identities and then agreeing on a single objective for the future can prove difficult, especially when assets are north of $1 million.

The way a couple makes these decisions impacts how they invest, how they work with their advisor, how confident they are about the future and how much they argue about money. And when $1 million or more is at stake, the ramifications are magnified as well.

Mistakes will be made along the way and tempers will flare — your clients are married after all. And the advisor is left with the task of helping to managing a fortune, while guiding two people through their collective financial future.

Challenges surface because couples tend to have different risk tolerances. A household where financial decisions are led by the man — 40% in the U.S., according to a study from UBS — can be tricky to navigate because men generally are willing to take on greater risk. That can lead to the wife using the husband’s more aggressive strategies, against her instincts or wishes.

Advisors need to be sure that both spouses are comfortable with the choices being made.

In the same vein, statistically women outlive men so it’s possible that female clients with a lower risk tolerance will one day end up with portfolios that they aren’t comfortable managing.

The UBS study also found other surprising decision-making dynamics in HNW couples. For one, going against a prevailing stereotype, women make the financial decisions in 16% of the households surveyed. Other stats show that 28% of couples share in the decision making, while 16% of those surveyed make separate decisions and hold individual accounts.

No matter the kind of household your HNW client falls into, one thing that stands out as a universal issue is lack of communication. Although it manifests itself differently in various age groups, says UBS advisor Elizabeth Sheehan.

For instance, newly married HNW couples “very often haven’t had conversations about how they each value money and what their approaches are toward money,” she says.

“On the flipside, as couples get older sometimes I found that very often they haven’t shared what their view of retirement is,” Sheehan explains. “They haven’t been completely transparent with their financial goals.”

Indeed, two of her clients, a couple in their 60s, had vastly different plans for how they’d spend retirement. One spouse had believed they’d be moving to Florida, while the other was under the impression they’d be moving to downtown Chicago to be closer to their children.

After decades of marriage, the couple just assumed they were on the same page regarding their retirement.

To facilitate better communication between these clients, an advisor has to ask detailed questions.

For example, advisors need to discover why each person has a certain attitude regarding money.

Sheehan gave an example of another client couple in which the husband is the saver. Growing up, his parents each worked several jobs and the family had to be very careful with money.

(Bloomberg News)
(Bloomberg News)

Although he is now doing well financially, he still has the mindset that, at any moment, he and his wife may not be able to pay the bills. So he has a hard time taking on risk with his investments. He is more inclined to keep money in cash or other liquid securities.

“The husband’s approach toward money and expenses was not only hard on his wife, but on his entire family,” Sheehan explains. “The wife had a great-paying career of her own and from her viewpoint, part of the reason she worked so hard was so that her family could enjoy life leading up to retirement.”

Using this information, Sheehan developed a plan showing this couple that a middle ground could be found. She came up with a detailed savings strategy and pointing out that they could afford to spend money on discretionary expenses.

With the clients’ differences in mind, Sheehan was able to use the plan to create targeted goals.

“I wouldn’t have had that knowledge if I hadn’t asked, 'tell me more about why you’re a saver?'” Sheehan says. “If a financial planner is doing their job well, they’re going to learn about all their client’s financial goals and be able to see a comprehensive view of what those goals are and then come up with a plan to best help them.”