When a spouse dies, financial advisors have amazing opportunity to step up

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Earlier this year, I read an interesting op-ed piece in the Globe and Mail written by my friend and medical doctor Jean Marmoreo about “the disengaged spouse.”

Jean’s piece inspires reflection on what happens when “a woman whose husband either dies or divorces, leaving her adrift, not without money but with no idea how or where to manage it.” The answer is often a major overhaul of everything – including their financial advisors.

It took me back to the time, more than 12 years ago, when I was newly widowed myself.

I can attest to the overwhelming and incapacitating fear of managing on one’s own, and I was in a better position than most. We had wills in place. We had time to prepare, as my husband had been ill with cancer. During our marriage, I was the one who managed our finances. I worked for a wealth management firm and had a portfolio manager I knew, liked and trusted.

And still, it was hell. I was bereft, exhausted with grief, and anxious about my future.

I remember asking myself, “If this is how I am feeling, what must it be like for people without my experience, resources and confidence in managing money?”

To answer that question – and to help my firm at the time learn how to better support grieving spouses – I interviewed more than two dozen high-net-worth widowed women. Though all were financially independent, many, like Jean, had depended on their spouse to manage the financial piece of their lives.

Based on that research and my experience working with widows, here are five things professional advisors should consider when a loss occurs, and their clients are at the most vulnerable time of their lives.

Don’t ignore the elephant in the room

Everyone always wonders about the right thing to say. There isn’t any one right thing to say. In fact, having led numerous grief groups over the years, I can tell you that what is comforting to one grieving person seems insensitive to another. Still, saying nothing at all is not the answer, either.

What’s most important is to acknowledge the loss. Speak of your own memory of the deceased and what you miss. Share a story. Say their name. While it’s true that your words may invoke tears, know that tears are healing. Strive to create a trusting environment in which your client can be vulnerable and feel supported in their vulnerability.

One of the senior partners at my firm took me to lunch one day, and I’ll never forget his words: “I know everyone is asking you how you’re doing. I’m not going to ask you that. I’m going to ask you how you’re doing financially.” I think my exhale was audible across the room. No one had asked me that before and it gave me liberty to talk about how I was really feeling – instead of the “keep calm, carry on” attitude I showed the world.

Be prepared – know that grief can impair cognition

Neuroscientists know that grief and loss affect the brain, causing changes in memory, speed of information processing, decision making and emotional response. You may see this show up in your clients as forgetfulness and/or confusion; they may have trouble paying attention or expressing themselves.

At other times, these symptoms are not readily apparent. As one widow I interviewed told me, “Even though you think you are in your right mind – you feel normal – you are not. I look back on that first year and I barely remember it.”

Wading through grief with a client is never easy, but if you can earn their trust, they will remember your kindness and empathy forever.

Advisors to the grieving person should be extra vigilant for signs of cognitive impairment, and exercise patience and compassion. Consider allowing extra time for meetings and phone calls. If it isn’t already your practice, recap the discussion points in a follow-up note to your client, including the action points you each will undertake. Make sure you follow up to ensure any important deadlines are met; don’t assume your client will take care of it, regardless of what’s been agreed to.

Find practical ways to offer meaningful help

With the best of intentions, many people will say, “Let me know if there’s anything I can do to help.” It’s become a throw-away line and, on top of everything else, the grieving person must now come up with ways for you to help?

Better to watch, observe and pitch in where you identify a need. One advisor I know of went to his elderly client’s home several times and patiently worked with her to sort through estate paperwork there.

Another woman I interviewed told me how receiving correspondence from CRA triggered fear and grief for her. “Every time I opened one of those brown envelopes, I would have a panic attack,” she said. Her accountant proposed a new system whereby she would open the envelope and, without reading its contents, scan the document and send it to him. He would read it and advise her if any action needed to be taken. Years later, she still remembers the relief and support that offered her at a critical time.

Be their advocate

In almost all the cases I’ve seen, widowed spouses seek out an advocate to help them with their investment decisions. After all, they are missing their partner with whom they consulted and made decisions. Often, this advocate is a trusted and financially savvy family member or friend.

If you are a professional advisor, it is helpful for you to know who that person is because they will influence decision making. Better still, if you can, try to become the trusted advocate who plays the role of sounding board and decision partner. There are two parts to this equation: one is competence, the other is trust. You will need to demonstrate both.

Watch for emotionally driven financial behaviour – and be the steady hand

When the death of a spouse occurs, assets will need to be transferred or disbursed and investment plans need to be reviewed. Sometimes there’s a dramatic change in financial circumstances, such as loss of income or payment of lump-sum life insurance proceeds. Sure, practical matters need to be dealt with, but a person’s emotional state will often drive decision making.

I’ve known widows in constrained circumstances who kept up power levels of spending, either in denial or lack of understanding about how long the money would last. Others hoarded money “like hooch during Prohibition.” Also, “bag lady syndrome” reigns large among these women, a fear publicly shared by high-profile (and wealthy) individuals Katie Couric, Lily Tomlin and Shirley MacLaine.

Other emotions that widows told me about ran the gamut from uncertainty (Am I living within my means?) to guilt (This life insurance payout is blood money) to shame (He was such a risk-taker, he’d disapprove of how I’m handling our investments now).

Family and friends can be another source of angst. When people know there has been a large inheritance, some may have a hope or expectation that it will be shared, and this can be dangerous when one is in an emotionally weakened state.

A recent guest on my podcast, health and wellness educator Lydia Knorr, explained how she and her husband Mike had enjoyed sharing their wealth with family members.

But after his sudden death at age 49, Lydia’s new focus was necessarily on the financial security of herself and her three daughters, and she could no longer afford the largesse. Lydia told me, “They [family members] didn’t overtly push back, but I always sensed a quiet resentment for not continuing the generosity we had offered when Mike was still alive.”

Advisors need to be on the lookout for these signs, and be the independent, wise and balanced advisor your clients hired you to be.

Wading through grief with a client is never easy, but it can be a tremendous gift to them and to you – it’s a chance to meaningfully help someone at a most vulnerable time. If you can earn their trust, they will remember your kindness and empathy forever.

Kelly Willis Green is an independent marketing advisor to organizations seeking to better understand, reach and satisfy the unique needs of high-net-worth individuals. She is the creator and host of Serious Coin: Rich Conversations About Wealth, a podcast that explores the financial, emotional and lifestyle benefits and challenges of coming into wealth. Her interview with widow Lydia Knorr can be heard in the episode titled, “The Wake-up Call: A Story of Personal and Financial Growth,” released April 26th.

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