Recent Widows Need Money Advice
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The loss of a spouse is among the most difficult experiences you could face in this life.
With the understandable barrage of emotions you might be dealing with, it’s probably hard to imagine taking concrete steps to secure your financial future. But now is exactly the time to do it. It’s what will set you on the path to emerging from this loss with the tools, skills, and strength to lead your finances into the future.
It’s obvious that money issues can be one of life’s biggest stressors, but it doesn’t have to be. Once you are ready to take control of your financial situation, you may need more clarity and direction on certain things. You may be asking yourself more important questions about your financial future, like how to make your money last.
You may also need help settling your spouse’s estate, transferring assets into your name, closing accounts, updating beneficiaries, and planning for your future needs. For all these questions, a financial advisor can help you.
Various surveys show that nearly 80% of women will at some point become the sole financial decision maker in their lives. Additionally, many widows will spend several decades controlling their own finances.
At this point, half of all women who become widowed in the United States are under age 59. Given that the average life expectancy for women is 79, this means that these women often find themselves managing their finances on their own for at least two decades.
While some women like to manage their finances on their own, others will prefer to work with an advisor. For those seeking advice on key issues like estate planning, tax planning, and financial planning and long-term investments, it’s essential to work with a financial advisor who understands your unique needs and goals.
A recent study conducted by UBS revealed that 85% of women manage day-to-day expenses, but only 23% take the lead in long-term financial planning. So while women are proactive with their day-to-day household finances, they may not have experience making long-term financial planning decisions and managing an investment portfolio.
You may have already established a relationship with a financial advisor before your spouse passed away. If you like this person, then it’s time to schedule a meeting with them to “recognize” and discuss your future financial plans now.
However, you may end up going to another adviser who seems more suitable to you. If you decide to make a change, know that you are not alone. At this point, 80% of widows change financial advisors within a year of their husband’s death.
Why? Because in many cases the advisor had a relationship with the deceased spouse and never fully involved the spouse in the financial planning and investment processes.
It’s important to take your time and find a financial advisor you trust and who understands your unique financial needs and goals.
Truth be told, anyone can call themselves a “financial advisor”. Just because someone calls themselves a “financial advisor” does not mean they have specific training, background, experience or certification that actually qualifies them to give financial advice.
There are advisors, brokers, brokers, certified financial planners, certified financial analysts, certified investment management analysts, investment counselors and wealth managers, to name a few. Admittedly, choosing an advisor can be confusing and overwhelming.
Ultimately, the financial advisor you choose should be a fee-only fiduciary advisor.
A study of investors by Personal Capital found that nearly half of Americans mistakenly believe that all financial advisors are fiduciaries bound to act in the best interests of their clients at all times. But that’s just not true.
The fiduciary standard explained
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A financial advisor adhering to the fiduciary standard is legally bound to act in your best interests. Fiduciary advisors must put the interests of their clients before their own.
Others who call themselves advisors are only held to a standard of suitability, which means they only have to suggest products that are right for you, even if they are more expensive and earn them a higher commission.
Additionally, paid financial advisors make money from the fees you pay for their services. These fees can be charged as a percentage of the assets they manage for you, as an hourly rate or as a flat rate. Almost all fee-based advisors are trustees.
Whichever type of advisor you choose, you need to make sure you know how they make money. This helps you determine if their recommendations are actually better for you.
In fact, alarm bells should ring if the advisor you’re interviewing doesn’t make it clear how they’re paid. If their fee structure is unclear, ask them to clarify the details.
You should also be on high alert if they offer to meet you only once a year. An annual meeting is insufficient, especially after the loss of a spouse. You deserve a counselor who will be available to you through all the vagaries of the new path you are forging your way.
Your relationship with your financial advisor should be positive. When you leave your advisor’s office, you should feel heard and know that your goals, priorities and concerns have all been considered.
Working with a finance professional forces you to be vulnerable to the very personal aspects of your life, especially after losing a spouse.
Remember, you are paying for your advisor’s time and services just as you would a doctor or lawyer. You should always feel encouraged to ask questions and feel confident that you are in control of your financial life.
— By Stacy Francis, President and CEO of Francis Financial