Divorce financial planning has a Rodney Dangerfield history — it got no respect. Formerly besmirched by some as the ambulance chasers of the advice business, planners with this expertise are now becoming a recognized, established and sought-after group.
Lawyers increasingly recommend their wealthy clients seek specialized financial advice from these professionals before finalizing their marital breakups. That's created a booming business for advisers with divorce financial planning experience — and more advisers are arming themselves with the skills and knowledge these clients require.
In fact, 16% of financial planners surveyed said they plan to add divorce planning to the spectrum of services they offer clients in 2014, according to a Financial Planning Association survey released last month. And about a quarter of the 1,954 advisers surveyed said they already offer divorce planning help.
“There's been a greater realization within the divorce community that a divorce financial planner brings added value to the process,” said Carl Palatnik, founding president emeritus of the Association of Divorce Financial Planners and chief executive of Divorce Analytics.
Divorce financial planners help people with the myriad of financial issues that arise when spouses split, including whether a particular settlement is workable and what a spouse's financial needs are and will be after their marriage has ended. The process often involves retirement plan analysis, education planning, assessment of earnings potential and helping clients set financial goals.
Most divorce planners charge an hourly fee of $250 to $350 or a flat fee between $5,000 and $10,000, according to Mr. Palatnik, who started the association with five other professionals 15 years ago. There are now 225 members in the group, which has grown especially quickly over the past five years, he said.
Most association members are certified divorce financial analysts, the most common designation of those who specialize in divorce planning. There are about 1,700 CDFAs in the U.S. and Canada today, a number that's grown by 40% since 2011, according to the Institute for Divorce Financial Analysts, which oversees the certification. Other divorce planning professionals are certified financial divorce specialists, a designation offered by the Financial Divorce Association.
“It's a good area for advisers because it's an area where there is money movement and it very often involves large amounts of money. The people who are going through the divorce are often disenfranchised from their adviser,” Mr. Palatnik said.
The specialty is even finding its way into the curriculum of financial planning schools, although it's not typically part of the core set of courses.
For instance, later this month the Department of Personal Financial Planning at Texas Tech University is hosting a two-day, 12-hour course on the financial intricacies of divorce. Justin Reckers, chief executive of Pacific Divorce Management, will lead the course.
“This will be a great opportunity for our students to learn about an important aspect of financial planning that is not generally part of the core curriculum,” said Chris Browning, an assistant professor in the financial planning department. “Providing instruction on special topics, such as divorce planning, from industry leaders helps ensure that our students are on the cutting edge of key issues faced by today's planners.”