Common ground can be hard to find when you’re working with a client couple that consists of a “spender” and a “saver.” The key to creating a successful financial plan for such a couple is to engage both partners equally in the process.
Bringing a couple together starts them down the road of successful financial planning, says Drew Abbott, vice president and investment advisor with TD Waterhouse Private Investment Advice in Toronto. “If the [plan’s] foundation is set and they’re all on the same page it avoids conflicts down the road.”
To bring your spender and saver clients together, follow this expert advice:
> Have clients talk about finances
Where possible, encourage clients to be open about their approach to money before they get married or enter a common-law relationship.
“Without that discussion,” says Jon Jurus, regional director of Investors Group Inc. in Hamilton, Ont., “the financial stress that plagues many Canadian couples and families becomes even more problematic.”
Have clients discuss openly their financial goals, habits and decision-making styles to avoid stress and conflicts in the future.
> Encourage “full attendance”
Insist both parties attend meetings with you so you know both spouses are engaged and agree with the plan, Jurus says.
Often, if one spouse controls the finances, that partner may plan to come to meetings alone. Such a division can pose problems if the less engaged spouse is not happy with the decisions. Serious problems can occur if the spouse looking after the finances dies first.
When meeting with a client couple, make eye contact with both partners and ask questions to both partners to ensure both are involved in the discussion.
> Mediate through questions
If the partners start taking opposing positions on a financial planning issue, try using open-ended questions to bring clients together.
“Guide them, through your questioning, into realizing that even a small amount of savings over a long period of time will accumulate to something significant,” says John Soutsos, branch manager and senior financial consultant with Investment Planning Counsel Inc. in Mississauga, Ont.
For example, if a client has a history of family illness, doesn’t expect to live long and doesn’t see the need for saving, ask what will happen if the client proves to be the exception, Soutsos says.
Or, if the client simply likes spending money, ask what he or she will do when their income drops by 60% upon retirement. To give your questions more weight, support them with statistics and income projections.
> Create a budget
Let your clients be their own mediators by creating a budget of household expenses.
A detailed, written budget acts as a tool when disagreements come up during the planning process. It shows exactly what the couple can spend and what they can save.
“In times of dispute or conflict, the budget can rule as the referee,” Abbott says.
> Discuss estate planning
A strategy for breaking a deadlock when creating a financial plan is to ask clients about their children. Couples are usually in agreement when it comes to the importance of their children’s wellbeing. Discussions around a legacy or estate planning often bring people together and settle disputes about financial habits.
“The idea of setting a legacy gets people engaged in the planning process together,” says Abbott. “It also sets a good example for the kids.”