News & Insights
How to Work With One-Income Couples – The Wall Street Journal - www.wsj.com
To help the non-breadwinner feel more secure, it’s important for advisers to be communicative and inclusive
June 26, 2017
Carrie S. Gallaway, managing partner and adviser at YorkBridge Wealth Partners in New York… When couples aren’t open with each other about their finances, the non-income-producing husband or wife can become anxious. PHOTO: MICHAEL BENABIB
Clear communication between partners about money is important no matter where that money comes from. When money comes from only one spouse, however, a lack of transparency often causes fear and uncertainty for the other spouse—which is where financial advisers can be a big help.
I work with a number of married couples who have just one income-producing spouse. With these types of clients, I’ve found it’s crucial that both partners be equally able to engage in conversations on their finances.
When couples aren’t open with each other about their finances, the non-income-producing husband or wife can become anxious about cash flow and the bigger picture. Such anxiety stems from a lack of insight on savings and 401(k) contributions, while the income-producing spouse’s access to these details tends to make him or her feel more secure. This disparity puts the non-working spouse in a position of having to ask the working spouse for information if he or she wants to know where they stand. The resulting dynamic can leave the non-breadwinner feeling powerless, causing unnecessary tension and conflict.
To help address and avoid these issues, we’ve created a formal structure at my firm based on healthy, regular communication. We actively manage interactions so both spouses are always on the same page with their finances. A cornerstone of this method is making sure that annual face-to-face meetings happen with both spouses in the room. We use the meetings to make sure everyone is up-to-date on the couple’s progress, and go in-depth as far as listening to each partner’s current fears and concerns.
We also gain insight on these clients by having them fill out a worksheet on their communication preferences. The exercise gives us actionable knowledge on how each individual prefers we interact with them and at what frequency. When both spouses have the same communication preferences, that gives us a framework to set our appointment schedule. But when their preferences differ, we have to figure out a more sophisticated system of communication, to ensure both partners stay equally informed on their own separate schedules.
For example, a non-income-producing client recently came to us worrying that her husband might be investing assets too aggressively. Because she preferred not to join our quarterly calls with her husband, we set up a system where after each call we would draft and email her a summary memo of the discussion. She told us it’s a major relief getting to review these summaries and see how everything is getting done responsibly. The feedback was a reminder how when it comes to client communications, a small change like this can deliver a large benefit.