Four Simple Steps to Retain Widowed Clients

Many financial advisors understand that when it comes to wealth management, most couples do not equally share decision making roles. This disparity in client involvement and education tends to surface only when the decision maker passes away, and more often than not, it’s the wife who’s left behind to bear this burden. To a certain degree, it makes sense - with today’s aging population and increased lifespan, widowhood is becoming a reality for many women. In fact, women age 65 and older are three times more likely than men of the same age to be widowed (40 percent vs. 13 percent).

Working with widows who weren’t the primary decision maker is inevitable. And at the same time, our industry has volleyed around for years the scary statistic that 70 percent of all widows fire their wealth advisor within one year.

Why have we seen this rate of change? Put simply – our clients are in an incredibly vulnerable and stressful position following the death of a spouse. Studies have found that the loss of spouse is one of the most stressful life events. Moreover, other studies have noted the heightened disorganization and trauma that follow the death of a spouse. And on top of that, even more studies have proven that widows are at a dramatically increased risk of illness or even death.

Stress. Disorganization. Illness. Is it any wonder that widowed clients who aren’t as educated about wealth management are susceptible to outside influence regarding their finances? And yet our industry continues to bemoan the loss of widowed clients as an inevitable reality while trying to solve the problem through touchy-feely tips that at best aren’t actionable and at worst are patronizing to the intelligent women we serve.

The fact of the matter is every one of our clients will die someday. As wealth advisors, we have a duty to translate complex financial issues into actionable plans that can be easily followed by both members of a husband-wife client team, particularly following the death of a spouse. Unfortunately, the overwhelming majority of discussions gloss over the issue of working with widows by only making vague, intangible suggestions that should be part of any financial advisors day-to-day responsibility, such as listening to clients and guiding them away from making impulsive financial decisions. Let’s talk about the tangible steps we can take to educate clients well before a tragic event – like the death of a spouse – ever occurs.

Based on my experience, there are four simple steps that wealth advisors need to take when they begin working with a married couple to ensure their client relationship lasts not only years, but across generations.

Taking Action

1. Ask couples to start opening the mail together. This is one of the easiest places to begin. Ask who opens the mail, and specifically, who opens the bills.  If the wife does not open or review bills, encourage her to start.

I’ve found that one of the first tasks my recently widowed clients tend to ignore is checking the mail. Depending on the situation and the length of time that lapses between when mail is delivered and when it’s opened, not opening mail promptly can result in significant financial consequences. 

Taking an active role in opening mail is one of the quickest and easiest ways women can begin learning more about their financial situation. By taking the simple step of reviewing mail, women can become familiar with which professionals and corporations service the household, view account balances and get a sense for when bills are due. Opening bills and correspondence is free, quick, and women can get in the habit of completing this task long before losing a spouse.

2. Insist that couples meet with their collective wealth management team at least once per year. As a financial advisor, meeting exclusively with one spouse is simply irresponsible. At least once a year couples should hold a roundtable meeting in person with you, their CPA and their attorney. This group might also include additional advisors.  As the couple’s financial advisor, you hold a special responsibility to ensure everyone is working together toward your clients’ goals, which includes creating an environment where both spouses feel comfortable asking questions and can clearly understand their wealth management plan. 

3. Create a checklist for couples listing important personal and financial information that should be kept in a central and secure location. When grieving the loss of a spouse, the last thing a widow should be concerned with is tracking down security codes, passwords or account information. Advisors can help couples prepare by creating a checklist of information that should be compiled in a central and secure location, such as a home safe or a safety deposit box. Checklists should be unique to each couple, but as a starting point, I would suggest compiling the following items:

• Social Security numbers
• Car loans/leases/titles
• Mortgage documents
• Insurance policies
• Property tax information
• Names and contact information for all utilities
• Credit cards
• Brokerage account information
• Wills
• Medical directives
• Employee benefits.

Additionally, the file should include information on the couple’s digital estate including:

• Any financial, purchasing, social media and other online accounts
• All relevant account passwords
• All computer, tablet and phone passcodes.

4. Help couples write an ethical will.  Also called legacy letters, ethical wills are not legal documents, but capture information that finances don’t speak to. Essentially, these letters document wisdom from the past and take instruction from the present to inform the intentions of the generations to come. An ethical will answers questions such as:

• What have been the individual’s lifelong hopes and dreams?
• What lessons have they learned on their journey to achieving their dreams, and what wishes do they have for their loved ones?
• What traditions and values would they like to pass on?

The death of a client is never a pleasant experience, but by employing these tangible steps now to educate and prepare couples for this inevitability, you will be better equipped to help your clients through one of life’s most traumatic events, while increasing your chances of maintaining your place as a trusted member of your client’s wealth management team. 

Kyle Walters, CFP^®, CPWA^®, CIMA^®, is the founder of Atlas Wealth Advisors, a Dallas-based wealth management company that partners with WFG Investments, Inc. as its broker-dealer.