Advising widows: Tips to serve clients at a sensitive time

PART 2 OF A THREE PART SERIES

Attracting and serving female clients through their various life journeys

By 2030, female investors could possess roughly $30 trillion in assets, as women of the Baby Boomer generation survive their spouses. For advisers, that wealth transfer could portend great opportunity … or great risk. Much will depend on how well financial professionals attend to the acute needs of newly widowed females.

If history is any guide, there is room for improvement. Seventy percent of women leave their financial advisers within the first year of a spouse’s death, a clear indicator they feel underserved during widowhood.

The key to improving service during this challenging life phase is — above all — patience, said Heather Ettinger, CEO of Luma Wealth Advisors, and author of the book, Lumination: Shining a Light on A Woman’s Journey to Financial Wellness.

“You should only be working in this space if you are long on patience and understand that there are going to be times where you have to repeat yourself 6-8 times before they feel comfortable,” Ettinger said.

Her remarks were made on the Retirement Repair Shop podcast, hosted by Transamerica and InvestmentNews, to help advisers better appreciate the unique needs of newly widowed clients, a challenging life phase that an estimated 80% of women experience.

Ettinger is no stranger to serving women who experience it. She built her practice more than 20 years ago, focusing on serving female clients and the unique challenges they counter. When serving widows, Ettinger said it is important advisers understand their client’s memory is not going to function normally when they are first thrust into this vulnerable position.

“We have to be aware that when she first loses her spouse, all short-term memory goes, so it’s important to, first of all, be patient,” Ettinger said. “Second, be aware that she needs to have a trusted friend or family member join her for those meetings [with an adviser] because during the period of grief it’s going to be very difficult for her to start any new relationships with an advisers or take in any massive amount of information.”

The Two Tracks of Widowhood

When women experience widowhood, they typically follow one of two tracks, Ettinger said. Some women will be a “doer.” They will want to keep getting things done and checking things off a list to delay their grief.

“It’s really important that [an adviser] helps her check things off the list, but they should also realize four to six months from now she will probably derail as she starts to deal with her grief,” Ettinger said.

The second track is experienced by widows that haven’t been as involved in financial matters. These widows are going through grief and trying to learn about finances at the same time. For this client, Ettinger said it is crucial to have a friend or family member attend meetings with her because it will be tough to take in new concepts and move at the pace she probably needs to.

First Things First: A Financial To-Do List for Widowers

For a woman experiencing widowhood, there are suddenly a lot of financial issues on their plate. A to-do list can help them stay focused and feel assured that progress is being made. Ettinger’s firm develops a visual transition plan for her clients. The plan includes a list of what needs to be done, ranked by priority. The plan also details whether the task can be delegated to an adviser or family member and an updated status of that task.

Some of the first things to prioritize include determining how many death certificates the family needs, and then filing for those, and updating beneficiary designations. It’s also important to learn where financial assets are located, to contact the spouse’s employer to learn what benefits may be due, and to contact the social security office.

“Make sure someone is on that call with her to so that you understand what your options are to claim the benefits,” Ettinger advised.

Larger-scale planning items, such as changes to an investment portfolio, decisions on what to do with a home or optimizing a tax strategy, can wait. The same goes for decisions on charitable giving and major gifts to family members. Some of these items are better decided after the client has a clearer picture of their benefits and what near-term cashflow looks like.

“Give yourself some space to wait on those big weighty decisions,” Ettinger said.

She recounted a time she told a client to hold off on purchasing a home in the city she moved to after her spouse’s death. The client chose to rent instead. That proved fortuitous as the neighborhood wasn’t as friendly to single women. The client eventually found a different neighborhood that was much more compatible, and the widow bought a home there instead.

“Nothing gives me more joy about her situation than to see her on social media with her friends in the new community she’s living in,” Ettinger said.

Think of the Little Things

When helping a client through something as difficult as widowhood, small gestures can go a long way. Ettinger’s firm helps their clients go through mail. It not only prevents potential elder fraud, but it can also turn up items that are useful to an adviser. For example, after going through one client’s mail for three hours, Ettinger found something on a substantial amount of stock options that would have expired if she didn’t file.

Last year, when clients couldn’t meet for things such as holiday parties due to COVID restrictions, Ettinger’s firm set up a holiday party on Zoom, and contacted family members of widowed clients to get them to help get that client set up for the online festivities. She also put together a recipe book from the adviser team and sent it to widows.

Celebrating the person she lost is also important. “Be absolutely aware of their anniversary date, birthdate and date of death and make sure someone from your team reaches out on those days,” she said.

By showing more awareness – and more patience – advisers will be better equipped to serve newly widowed clients. As $30 trillion in wealth changes hands to female investors over the next decade, it may prove absolutely critical to their practice.