Advisers: Can you pass the ‘trust fall’ test?

If your best conversations with your clients’ wives take place at annual holiday parties, that relationship may come to an abrupt end at a time you least expect — right after your client’s wife becomes a widow.

With some estimating that about 70% of widows leave their financial adviser in the first year after their husbands’ death, and with widows comprising about a third of women 55 and older, advisers must do more to build trust if they are to retain the female side of their client relationships.

Client events foster better business relationships, but they aren’t enough to develop deep ties built on trust, said adviser John A. Frisch, president of Alliant Wealth Advisors, who has many widows as clients.

Developing such ties is particularly important because it is far more likely that the wife will be the surviving spouse. According to the 2000 U.S. Census, widows outnumbered widowers almost 4-to-1 in the over-55 age group.

“If the adviser is trying to advise on more than just investments, the only way to do that is to get to know both parties, and you can only have those conversations if both show up to client meetings,” Mr. Frisch said.

He and other advisers who have been successful at working with widows said that the biggest hurdle in developing an independent relationship with a client’s wife is that husbands are more likely than wives to be the adviser’s primary contact. If advisers don’t push the issue, wives typically see the adviser only at events.

That may establish an relationship, but it does little to establish trust. Advisers who have been successful at keeping accounts after the death of the spouse who is their primary contact said that it is crucial to their business and to their clients’ well-being to build trust with both spouses.

EASIER TRANSITION

“It is beneficial to the couple for both to come to meetings as much as there is a benefit for me,” said Peter Lang, managing director of HighTower Advisors LLC. “It makes the surviving spouse’s transition far easier when they know where things are.”

Mr. Lang recalled one client whose wife called him in a panic when the husband had a medical crisis and went into a coma. She had left most of the financial planning to her husband, and needed substantial help coping while he was ill.

“She didn’t even know where the checkbook was,” Mr. Lang said.

The husband recovered, and Mr. Lang was able to persuade the wife to come to client meetings.

“It is kind of a generational thing,” Mr. Lang said.

With younger clients, however, wives are more likely to be involved, or even take the lead. Often, the less involved spouse feels that they don’t understand financial issues very well.

“No one likes to ask the first question,” and frequently that spouse will keep quiet even if he or she does attend meetings, Mr. Lang said.

“You pay attention to their body language and make sure they are following along. I don’t talk down to people,” he said.

“I treat them with respect.”

Susan Honig, president of Veritana Financial Planning Inc., won’t take on a married couple as clients unless both spouses agree to come to at least the first few meetings, she said.

Widows “need to feel a level of comfort” dealing with their adviser, she said, and that comes from a having “a relationship that is fostered over time.”

Especially during important transitions, advisers need to think beyond investments, said James Barnash, senior vice president of Merion Wealth Partners LLC.

He recalled one retirement-planning meeting with a couple during which the husband went into great detail about their retirement plans, which included moving to Florida and daily fishing expeditions.

“He even knew what color boat he was going to buy,” Mr. Barnash said.

Meanwhile, the wife was silent, so Mr. Barnash asked her what her thoughts were.

She surprised both her husband and Mr. Barnash when she started to cry and revealed that she was devastated at the thought of moving so far from her grandchildren.

To find out if there was a solution that would work for both of them, Mr. Barnash spoke to their adult children, and collected school schedules and vacation times to develop a calendar for frequent visits, complete with airline schedules and a cost estimate. Addressing the wife’s concern in a concrete way made her feel heard and increased her enthusiasm for the move.

Richard C. Salmen, senior vice president and senior adviser of GTrust Financial Partners, thinks that spouses are more likely to feel included if two advisers attend client meetings.

“We find the dynamic is better with four rather than three at the meeting,” he said.

Because the majority of planners at Mr. Salmen’s firm are women, at least one adviser with a client is usually female, though he said that the gender of the adviser isn’t as big an issue as getting both spouses to talk about their expectations.

TWO CONVERSATIONS

“Sometimes there are two conversations going on, with one adviser talking to the wife and the other talking to the husband,” he said.

If, however, the advisory relationship with the wife begins only after her husband’s death, the few meetings are crucial, Mr. Salmen said.

“We don’t jump straight to money issues,” he said. “We get to know them.”

Expect first meetings to be emotional, and be prepared to listen, Mr. Salmen said.

One recent widow told him her biggest concern was how to deal with her adult children, who were pressing her to make quick decisions. She didn’t want to cause hurt feelings and asked Mr. Salmen to help.

“A big part of our job was to run interference,” he said. “It is not a cookie cutter thing at all.”

[email protected]