Even the most civil divorce—and let’s face it, how many of them are?—can pose its share of challenges for a spouse who hasn’t needed to manage her (or his) own money before. When you add the acrimony and complex negotiations that often go with the territory, you have a potential minefield to deal with. Not only is your client in need of education and resources, but she’s likely also upset and not thinking clearly.
Barbara Shapiro, CDFA, has 16 years’ experience with this kind of situation. Prior to becoming a financial advisor, she worked as a teacher. Her degrees in counseling and special-needs education weren’t of use to her as she tackled her third master’s degree in finance, but they sure came in handy when she realized that her niche was helping women navigate the frightening waters of financial independence.
Not that she has all the answers for these women, mind you. “Part of reason is that the financial aspects of the divorce are just a piece of the divorce,” says Shapiro. If you’re going to specialize in this important market, it’s good to build relationships with attorneys and counselors—those relationships give your professional colleagues a “value-added” for their clients, which means referrals for you. But more than that, having these people on your team will help you avoid accidentally practicing law or falling into a role of counselor.
But just how do you become this kind of specialist? Be sure to read “Untying the Knot” for information on the market. But Shapiro also offers these tips for dealing with divorcing clients:
Make the client comfortable. Shapiro keeps her Boston office full of eye-catching things that will help her clients start talking. Artwork, “toys” on the bookshelf, sports memorabilia are things that a client can latch onto. That way, if they come in nervous, as they often do, “they’ll start talking nonchalantly,” says Shapiro. “We’ll just chat, and once I sense they are starting to relax, that’s when I’ll ask, ‘What can I do to help you?’”
Always have tissues on hand. Many divorcing clients aren’t there because they want to be. As they tell their story, be prepared for them to share their pain.
Let them talk, but know when to say when. “It should take about 15 to 20 minutes,” says Shapiro. But make sure they stay focused or “you might be there for 15 to 20 hours.” If it looks like they’re going off on tangents, ask them, “Where would you like to be next year at this time?” By keeping them focused on the future, they’re less likely to drown in the present.
Help them understand that they know more than they think they do. Perhaps they don’t know about investing and retirement planning, but they do know how to balance a checkbook and follow the grocery budget. Or perhaps they’ve never been the breadwinner of the family, but they’ve run a tight ship when it comes to the business of the household. By showing them how useful their skills are, you can help boost their confidence.
Be straightforward. Shapiro notes that one of the most important things you can do is talk plainly to your clients, and don’t “talk down” to them. It’s a tricky balance to communicate on their level and in their language in a way that still preserves the important concepts they need to develop their financial savvy. Look for cues that they understand: they’re responding by repeating what you said in their own words, or otherwise demonstrating they’re engaged.
Don’t evade. Even if you have bad news, don’t sugarcoat it. “In my experience, people in a really bad situation already know that the picture is grim,” she says. “I preface it with: ‘You haven’t come here for me to tell you what you want to hear want to hear. You’ve come here for me to tell you what you need to hear.’ I’m not doing them any favors if I say everything is going to be fine, when I know it’s not.” The end result? They’ll appreciate your honesty and be more prepared to take the required action.
Help them reach their own conclusions. An emotional client makes emotional choices—and that can lead to bad decisions. “If the client comes in with an irrational decision, sit down with them and help them understand what the long-term ramifications of that decision are going to be,” says Shapiro. Let them talk it through, and generally speaking, they will come to the realization that this isn’t based on reality and come to another conclusion. “It may not be what you choose, or would have chosen in the same situation,” she adds, “but as long as it’s grounded in reality, that’s fine.”