When confronted with divorce, I think most of us know enough to look at the different legal processes (traditional, mediation, collaborative). We know to consider couples therapy or even therapy for ourselves. My sense is that using a divorce coach is becoming more usual but when do you need a financial advisor?
My guest today is Meredith Bromfield, author of 10 Keys: A Woman’s Guide for Navigating a Successful Financial Divorce and founder of Crossing Your Bridge, a coaching company. Meredith says there are certain situations in which it is absolutely critical for your future well-being to have your own financial advisor. Here’s Meredith:
A divorce is an emotional, physically and financially draining experience. The better prepared and educated a woman is during this time the more she is apt to walk away from the divorce with a feeling that she did all she could and that she was treated fairly through the whole process. A competent financial advisor is a person she needs on her team to feel secure and know that the money aspect of the divorce will be taken care of.
First question, do you currently have an adviser with your husband? If the answer is yes, then I strongly suggest you find your own advisor. This may be difficult as you may have been with this advisor for many years and really like them. However, you have to realize that it is very difficult for an advisor to be impartial if he is dealing with both of you. Also you want the comfort of being able to talk to your advisor. The things that you say may not always be kind and it could get back to your husband.
Also, there could be an issue where a particular asset may be more advantageous and you don’t want your advisor to have to be the mediator making a choice as to who to favor.
If you and your husband’s liquid assets are over $200,000 then there are a few firms that will be willing to work with you. A liquid asset would be any type of investment other than a business or a home. This would usually mean, savings accounts, stocks, bonds, IRA’s, 401k, SEP IRA’s, UGMA’s, 403B’s and mutual funds. This type of very high end help and handholding is usually reserved to those with assets of $500,000 to $1 million.
Be aware that if your divorce goes to trial then the judge will determine the final distribution of any retirement plan assets and in any event the division will be subject to a Qualified Domestic Relations Order. A comprehensive financial plan will be an asset for your attorney in negotiating with your spouse’s attorney. This comprehensive plan will determine what your needs will be in the future, it will address your retirement, taxes, long term care needs and education for your children.
Your investment advisor will open up accounts in your own name, if required, so you are in position to receive the transfer of monies from your spouse to your own account.
I recommend you find an advisor that is not just a product saleswoman, one that is not captive with just one company. I would suggest someone who charges a quarterly or annual fee of less than one percent to watch over all your money and advise you how to protect it and make it grow.
If you would like to find out more information about finding a competent financial advisor or have financial questions, please contact me through my website. I will be happy to answer you and/or put you in touch with someone who can help you.
Investment Advisers are generally required to be registered with the Securities and Exchange Commission which has an Investment Adviser Search. The site also includes details of any disciplinary actions so it’s always worth checking.