female advisor shaking hands with a young couple

From the first meeting with a prospect, an advisor needs to gauge their expectations, not just in respect of returns on investments, but their personal goals. This can get complicated when you meet with couples.

Sheesh Fine is a 37-year-old physiotherapist. She just moved in with Moe Stash, a 45-year-old dentist who has two children from a first marriage.

In your first meeting with Sheesh and Moe, you gather that it was Sheesh’s idea to open a joint investment account to save for their future. However, Sheesh and Moe are not aligned on their personal goals.

Moe talks about marrying Sheesh and having more children, while Sheesh is unsure. Sheesh talks about having two residences — a condo downtown closer to their work for days when they don’t have Moe’s children, and a small home closer to where the children go to school. Moe wants to stay in their cramped rental apartment, as he is already paying all expenses for his ex-wife’s house.

The housing issue alone creates friction, and potentially conflict, between Sheesh and Moe, and you aren’t sure how to manage the joint account they want to open to save for the future.

Before you even consider opening an account for them, you need to first determine if their goals are so conflicted that they will be unable to meet them in a single joint account. Further, before you accept them both as clients, you need to ensure that there is no conflict between them. If you are satisfied that you are not conflicted taking them both as clients, you need to manage expectations by establishing what you can, and cannot, do for them. Here is a short list of issues to consider:

  1. Engage in further discussions with them, either together or separately, to identify and work toward achieving their common financial goals, which are tied to their personal goals.
  2. If they conclude their financial goals are not aligned, they should not have a joint account and should instead keep their accounts and money separate. This is not what they had in mind, so you will have to explain this in a delicate manner.
  3. They both have assets from before they moved in together, so you need to tell them that they might need to consult with a family law lawyer to determine whether they need an agreement or something to protect each of them in case they separate down the road.
  4. If they ultimately decide to have separate accounts, you can meet with them separately or together, but their goals and know-your-client (KYC) information need to be gathered in a manner that is clearly attributable to each of them as individuals, rather than the way it would be gathered for a joint account. You might want to speak to each of them separately to determine whether there are privacy issues or whether joint meetings are appropriate.

This is complicated, so the advisor needs to understand the issues and manage each of them, as Sheesh and Moe are both your clients.

What about elderly clients — are the issues different? Let’s look at Stevie and Nick. They are a married couple in their 70s. Nick has done all the money managing and Stevie is nervous about whether they have enough money to support themselves for the rest of their lives. They are both retired, and Stevie thinks they need to meet with an advisor and develop a financial plan. Nick says they will be fine but doesn’t share information with Stevie, so Stevie doesn’t know how Nick arrives at that conclusion. Stevie reaches out to you, so you need to navigate this challenging situation.

What you can do:

  1. Meet with Stevie and find out how much she does know about their financial situation.
  2. Meet with Nick either separately, with Stevie’s permission, or together with Stevie. You need to assess how they are doing financially and how you can assist them further.
  3. You will need to learn from Nick what is driving him to keep financial information so private, even from Stevie — is it a personal issue with Stevie or his own personal story that needs to be unraveled? It would be helpful If you could get a glimpse of why Nick might be so secretive with Stevie before you meet with him.

Sometimes a couple meeting with you will present themselves in a manner that appears to be unproblematic — but that could just be how it looks on the surface. You need to dig into issues with clients and find out each of their private and personal relationships with money to ascertain their goals. Don’t just take what they say at face value. Look beyond what they “present” to you for non-verbal signs and indications of any underlying issues and make sure you bring these to the surface. You don’t want one person from the couple to be dissatisfied later on, as that may lead to them moving on to another advisor.

While servicing couples, be certain to dig into the financial goals and risk tolerance of each person. These should not be a “compromise,” so if the couple is misaligned in their goals and risk tolerance, recommend against joint accounts in favour of separate accounts with two different KYCs. Of course, document everything, especially what is said at the meetings with them, to ensure you have a paper trail to support the information each of them provided, the advice that was given and their instructions to you.

Meeting with prospective clients is always challenging, but meeting with couples presents even more complexity. Be sure to be awake to these issues and manage them carefully. This will protect you as well as your clients if they later need evidence of what decisions were made, and why they were made.