Why advisors to divorcing couples shouldn't bet on who'll stay

It’s not an advisor’s job to pick a side in a divorce; it’s best for their practice if they don’t.

Financial advisors who work with a couple who are divorcing may feel like they have already figured out which half of the couple will remain with them. After all, it would be a conflict of interest to represent both parties personally post-divorce. But betting on one of the former spouses is a losing proposition for the advisor; here’s why.

While I was at Fidelity, I worked with a couple who was getting a divorce and the husband was my primary contact. He was the one who came to meetings, responded to emails, etc. To most advisors, that would say that this is the person who wants to continue working with me moving forward.

But in this case, you’d be wrong. The former wife reached out to me and thanked me because while I worked with her and her husband she didn’t have to worry about the money knowing I had her and her then husband’s best wishes at heart. Since then, she’s become one of my most loyal clients.

When I first learned that this couple was divorcing, as I do with nearly all my separating couples, I acknowledged that I enjoyed working with both parties and would like to continue personally serving whichever member would like to do that moving forward while I would provide a warm handoff to a colleague for the other person. 

Had I been betting that the former husband would be my remaining client and been catering to him, communicating with him more and doing other things to continue to woo him, perhaps that would have turned his ex off. But instead, remaining neutral and expressing that I wanted what’s best for both of these individuals moving forward turned out to be an unexpected surprise.

That’s why I counsel advisors who are working with a divorcing couple that the divorce isn’t about them so it’s not their job to pick sides. 

Currently, a lot of firms are losing assets as couples split because of hard feelings from one of the clients and/or the advisor not actively encouraging the couple to maintain their working relationship with the firm. But this doesn’t have to be the case; advisors can be proactive and provide a handoff to a trusted colleague.

I counseled a former colleague who came upon this situation and didn’t want to come off as too salesy to impress upon the couple that he cared about both of the individuals and would be happy to continue working with either of them while transitioning the other person to a colleague. 

A thoughtful way to encourage keeping their assets at the current firm is to say something akin to the advisor “not wanting you to have to start from scratch.” As it is in divorces, there’s a lot of starting from scratch – finding a new place to live, losing certain friends, and getting used to being single again. Providing a divorcee with an opportunity to retain some sense of normalcy may be a welcomed reprieve.
 

Jamie Lima is founder and president of Allegiant Divorce Solutions, a financial advisory practice dedicated to the specific needs of divorcees.