Fidelity unveils “Financial Compatibility Quiz” to help advisors facilitate conversations and create more balanced involvement for couples in their financial planning
December 18, 2013- BOSTON–(BUSINESS WIRE)–Fidelity Investments® has released new insights from its 2013 Couples Retirement Study on the retirement expectations and preparedness of couples who work with financial advisors. The study uncovered a dynamic between couples and advisors that is not commonly discussed: the role men play in facilitating – even sometimes inadvertently hindering – their partners’ relationships with their advisors. Only 42 percent of couples who work with a financial advisor interacted “jointly” with that advisor, and men were 58 percent more likely than women to be the primary contact with the advisor. This imbalance in financial “ownership” may put many women in a difficult position, as data2 shows most will outlive their significant others, forcing them into the financial driver’s seat.
“Men reported that they are afraid of leaving their partners financially unprepared should they need to manage the finances themselves,” said Jylanne Dunne, senior vice president of practice management and consulting, Fidelity Institutional Wealth Services®. “What they may not realize is that by driving their households’ relationship with their financial advisors, they could be unintentionally turning this fear into reality. The good news is that there are simple steps couples can take to attempt to align their financial future and prepare for a smooth transition – and advisors can play a critical role in that process.”
What’s Your Financial Compatibility I.Q.? Take the Quiz
In fact, the study found that couples were more comfortable talking to their advisors than one another about many topics, including difficult long-term planning conversations such as death and inheritance. To help advisors initiate the discussion with their couple clients, Fidelity is unveiling the Financial Compatibility Quiz, an online tool that can help couples find their individual—and combined—financial personality. It can help start the conversation: “Are you the driver or the passenger?” This allows advisors to address their involvement today, transition into playing out specific scenarios and discuss how each partner’s role might change. It may also help advisors strengthen their relationships with both members of the couple.
“Women are not unwilling to step into the financial driver’s seat,” said Brian Nelson, vice president of practice management, National Financial®, Fidelity’s clearing division. “According to the study, women are interested in working with an advisor, but they say they hand over the reins because they trust their partner. This may not only create instability for the family, but also for the advisor-client relationship. While our study found that 8 in 10 women do not intend to fire their advisor upon their partner’s death, when reality hits and there is no relationship in place, many do. An advisor’s bond with both members of a couple can be key to bridging this gap between intent and reality.”
Additional insights from the 2013 Fidelity Investments Couples Retirement Study include:
- Younger women even more likely to hand over the reins
Women were more than twice as likely as men to say their significant other was the primary contact (31 percent vs. 13 percent of men). This trend was even more prevalent in younger women, with 41 percent of Gen Y women reporting their significant other was the primary contact compared to 33 percent of Gen X women and 28 percent of Boomer women.
- Trust and relationship with advisor drive the ceding of control
While the majority of women do have an interest in the advisor relationship – only 15 percent reported they do not have an interest in interacting with their financial advisor – the No. 1 reason they hand over control of the advisor relationship is they trust their partner (53 percent), followed by 33 percent of women who said their significant other had a personal relationship with the advisor.
- Fears about lack of preparedness are valid
More than half of women (52 percent) were confident in their partners’ ability to assume full financial responsibility of retirement finances and strategy. Many men did not share the same level of confidence in their significant others – only 43 percent of men were confident in their partners’ ability to assume full financial responsibility of retirement finances. This is a valid concern since, according to the study, fewer than half of the women surveyed (45 percent) were confident in their own ability to assume full financial responsibility.
- Financial advisors can serve as the bridge to help ensure both members of a couple are engaged and prepared
Four in 10 respondents (43 percent) were more comfortable talking with their advisor than their partner about certain topics, particularly for difficult long-term planning conversations, such as retirement decisions, estate planning and wills. Clients’ comfort in talking with their advisor about these topics suggests a fitting role for advisors – to bring couples together to address these sensitive issues.
Some considerations for advisors to implement in their relationships with couples include:
- Be Frank with Your Current Male Clients
Acknowledge the fear that men have of leaving their partners unprepared should they die. Share the hard truth that this one-on-one relationship could be creating just that situation. Ask them to bring their partners to the next meeting and every meeting thereafter.
- Implement a New Client Policy Requiring Joint Participation
To help maintain the client relationship after the death of a spouse, advisors may want to consider implementing a new client policy that requires married couples to include both spouses in the planning process.
- Address the Tough Topics Together with a Conversation Starter
One way to start to tackle serious planning conversations is with a conversation starter, like the Financial Compatibility Quiz.
To read more about the full findings from the 2013 Fidelity Investments Couples Retirement Study, see this additional report, or to find out more about how to help women who have experienced a divorce or loss of a spouse, view the Fidelity whitepaper, “Sudden Decision-Makers: Empowering Women in Transition.”
About the 2013 Fidelity Couples Retirement Study
The 2013 Fidelity Investments “Couples Retirement Study” analyzed retirement and financial expectations, and preparedness among 808 couples. Respondents were required to be at least 25 years old, married or in a long-term committed relationship and living with their respective partner, and have a minimum household income of $75,000 or at least $100,000 in investable assets. The 2013 study expanded on studies of prior years by including 109 Gen X couples and 109 Gen Y couples, in addition to retired and pre-retired couples ages 47 and older. Gen X couples were between the ages of 35 to 46 (born between 1967-1978) while Gen Y couples were slightly younger, between the ages of 25 to 34 (born between 1979–1988). The 2013 study also included 110 couples who were not married but reported being in a long-term committed relationship. Fidelity Investments was not identified as the sponsor. GfK’s Public Affairs & Corporate Communications division executed the study, which fielded in May 2013.
About Fidelity Investments
Fidelity Investments is one of the world’s largest providers of financial services, with assets under administration of $4.5 trillion, including managed assets of $1.9 trillion, as of October 31, 2013. Founded in 1946, the firm is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products and services to more than 20 million individuals and institutions, as well as through 5,000 financial intermediary firms. For more information about Fidelity Investments, visit www.fidelity.com.
The content provided herein is general in nature and is for informational purposes only. This information is not individualized and is not intended to serve as the primary or sole basis for your decisions as there may be other factors you should consider. Fidelity Investments does not provide advice of any kind. You should conduct your own due diligence and analysis based on your specific needs.
National Financial is a division of National Financial Services LLC. Fidelity Institutional Wealth Services is a division of Fidelity Brokerage Services LLC.
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Fidelity Institutional Wealth Services provides brokerage products and services and is a division of Fidelity Brokerage Services LLC. National Financial is a division of National Financial Services LLC through which clearing, custody and other brokerage services may be provided. Both members NYSE, SIPC.