One of this year's hottest books has catalyzed conversations about financial planning. When Belle Burden's "Strangers: A Memoir of Marriage" hit shelves, it unveiled more than just the undoing of Burden's marriage. Despite being an heiress, Burden confessed that until her husband left her, she was ignorant of and uninterested in her own finances. She ended up paying handsomely for that disinterest during her divorce proceedings.
Finances and privilege aside, "Strangers" revealed relatable, harsh financial truths. Celebrities praised the work, educators vowed to craft curriculum around its financial takeaways and media and pundits alike jumped on the coverage.
But as it skyrocketed to No. 1 on bestseller lists and into the literary stratosphere, the book that
And whatever you do, don't forget the "out-spouse."
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Who is the out-spouse?
The term "out-spouse" is borrowed from the divorce lexicon. Nobody deliberately takes on this role, nor does an advisor intentionally cast them into it. In essence, the out-spouse is the person in the couple who sits more quietly through the meeting. They say less, ask less and risk being left behind if their advisor doesn't catch on. On occasion, advisors will need to determine who the out-spouse is, although women disproportionately fall into this role.
Lisa Kirchenbauer, senior advisor at Alexandria, Virginia-based Omega Wealth Management, finds that men occasionally assume the role of out-spouse when their female partners express take the lead on asking about the firm's technology or portfolio performance. But by and large, Kirchenbauer finds that although her women clients often handle their family's purchase decisions and day-to-day expenses, the same can't be said for the family's investment portfolio.
"It's not that they don't have a sense of what's going on, but it's a question of if they have a sense of what's going on now," she said.
A UBS report on the great wealth transfer and women found that 80% of those who had already inherited money from relatives had not discussed the inheritance and did not know their relatives' financial situation in advance. Among widowed women, 83% reported facing challenges due to a lack of a financial plan, conflicts among heirs or unexpected surprises about their family's finances.
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How to avoid deal-killers and 'veto power'
An out-spouse's lack of involvement may be nobody's fault, but it's still the advisor's responsibility to involve both parties in planning, said Erin Botsford, founder and CEO of The Advisor Authority, during a June 17 webinar for estate planning software firm Vanilla.
Noting that opposites often attract and that one spouse usually tends to engage more than the other, she discussed what can happen when the wife is less engaged.
"This is an absolute deal killer," said Botsford. "She may sit there quietly and listen to what you have to say, but she does have a superpower I like to call absolute veto power. By the time she gets to the car and closes the door, you're history."
Targeted questions and intentional redirects
One way to ensure this doesn't happen is by engaging both parties.
"We take a pretty firm stance that at least in the onboarding phase, both people in the couple are engaged," said Kirchenbauer in an interview. During preliminary meetings, prospects participate in a communication exercise.
"We want to know how to communicate with each person in the couple, not just the one who's more engaged," Kirchenbauer said. "Going forward, we want to tailor our communications, advice and everything to both of them, even if it's different."
Before prospects are onboarded, Kirchenbauer also implements a pre-onboarding protocol that includes training from the Kinder Institute. She said she asks both clients three questions to break the ice:
- What would you do if you had all the money in the world?
- What would you do if you had five to 10 years to live?
- What would you regret not doing if you had only 24 hours to live?
By the time they reach this phase of the conversation, Kirchenbauer said, "the spouse who would otherwise not be as engaged is often quite engaged at this point."
Getting to that point in the client relationship can at times require more than a well-placed question. Kirchenbauer said sometimes she has to be "fairly aggressive in saying to the husband, 'Hey, I'm looking forward to hearing from you, but I really want to hear from [your spouse] first.'" This small, deliberate redirect is a necessary tool if a dominant spouse is used to speaking for the couple.
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Call out inattention in the moment
Advisors can appeal to the out-spouse at first only to lose them later on — especially when that spouse is a woman, with whom
For Kirchenbauer, if one party begins to drift during the session, she is quick to bring them back in by calling the moment out and saying, "I think I'm losing you. Tell me a bit about what money means to you." Doing so helps ensure the less engaged partner walks away "much more knowledgeable and empowered than they would have been otherwise."
Advisors and clients alike may not be aware that in some small way, the popularity of the book "Strangers" helped nudge this once-quiet side of the financial-planning conversation into the open.
The out-spouse, once easy to overlook, is becoming harder to ignore.
