Widows' needs being ignored by advisers

The key to keeping them as clients is to make sure you have a relationship already in place

Jun 21, 2009 @ 12:01 am

By Lisa Shidler

The nearly 800,000 women who become widows each year share something beyond loss. About 44% say widowhood caused them to seek out financial guidance in a new way, and 70% of those using financial advisers said that they considered firing their advisers in the first three years after their husbands' deaths, according to recent studies conducted by Minneapolis-based Allianz Life. Accountants and estate attorneys aren't surprised that advisers often strike out with widows. “I find advisers to be patronizing and really demeaning to widows, even when I'm sitting there with them. I can't tell you how many times I've seen reputable advisers do not give the widow the respect they need,” said Susan Bruno, a certified public accountant at Beacon Wealth Consulting LLC in Rowayton, Conn. “Advisers aren't attuned to dealing with widows' issues because they're not trained,” said estate attorney Roy Kozupsky, a New York-based partner in the law firm Smith Gambrell & Russell LLP of Atlanta. For advisers who make the effort, however, meeting the special needs of widows can result in long, re-warding relationships, say those who have studied the issue. And those relationships should begin early. When dealing with older couples, advisers often fail to develop a relationship with the wife because they focus on the husband, who is usually the chief breadwinner, said Tracey Flaherty, senior vice president of retirement strategy at Boston-based Natixis Global Associates. “Advisers need to start thinking about the household as a whole. If you're not working with both decision makers and building a relationship then you'll be in trouble,” said Ms. Flaherty, whose firm recently completed a study showing that women were four times less likely than men to be contacted by their adviser during the recent market downturn (see Retirement Watch, Page 23).

In fact, the key to keeping widows as clients is involving both spouses in the planning process, said Alexandra Armstrong, chairman of Armstrong MacIntyre & Severns Inc. in Washington and author of “On Your Own: A Widow's Passage to Emotional and Financial Well-Being” (Armstrong Fleming & Moore Inc., 2006).

“If you have done your job and really involved both spouses, you won't lose the client,” said Ms. Armstrong, whose firm manages about $500 million in assets.

Because they weren't included in discussions while their husbands were still alive, market downturns and other unsettling events cause widows to question the financial advice they're receiving, said Ivan Taback, an estate planning attorney and partner in the personal planning group of New York-based Proskauer Rose LLP.

“I see a lot of people changing advisers,” Mr. Taback said. “I'm seeing widows open their eyes more so than before.”

Many advisers, of course, recognize that widows and widowers need extra hand-holding, attention and emotional understanding.

“I think it comes down to the adviser; some are simply more patient than others,” said Andrew Menachem, a Miami-based senior vice president and financial adviser with Morgan Stanley Smith Barney LLC of New York.

“Widows and widowers especially need an adviser who is patient and listens and is their advocate,” said Mr. Menachem, whose Menachem Group manages $350 million.

Advisers also must realize that a new widow or widower may not feel able to make difficult financial decisions on the spot, said Kathleen Rehl, owner of Rehl Financial Advisors in Land O' Lakes, Fla., where about 25% of clients are widows.

She said she vividly recalls how hard it was to make simple decisions after her husband died of cancer two years ago.

“There's shock and confusion,” Ms. Rehl said. “I couldn't remember where I put my car keys or even what my ZIP code was.”

“I think widowers are even more lost than widows,” said Carolyn Walder, an adviser with Lifetime Wealth Planning and Management LLC in Alexandria, Va., which manages $32 million. She said that even if widowers are more familiar with the finances, they too have special needs.

“The widowers we work with have been much more dependent on their wives, and they're so lost when their wives are gone. The women grieve harder but function better.”

One difficult aspect of dealing with widows and widowers is persuading them to change decisions that were made when their spouses were alive, such as selling certain stocks, said Antwone Harris, an adviser who manages $300 million in Washington for The Charles Schwab Corp of San Francisco.

“The husband may have bought a lot of stock because he worked for the company, and the widow may want to hold on to the stock because it reminds her of the husband,” he said.

In fact, portfolio adjustment is one of the more difficult tasks an adviser faces, said Bryan Wisda, a certified financial planner who works from Irvine, Calif., and Scottsdale, Ariz., for Summit Wealth Management Inc. The Roswell, Ga.-based firm manages around $1 billion in assets.

“There's a sainthood that comes into the way the husband did it,” Mr. Wisda said.

Rather than putting financial books in front of her clients' faces, certified financial planner Judy Lau often hands her clients books on grieving.

“I remind them that grieving is like wearing concrete shoes on your brain,” said Ms. Lau, whose firm, Lau Associates in Wilmington, Del., manages $450 million in assets.

E-mail Lisa Shidler at lshidler@investmentnews.com.

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