Along with being corporate leaders, entrepreneurs and successful professionals, we find that men often become the defacto family’s decision- maker regarding financial planning, investments, and wealth management strategies. In the event of death or divorce, a widow or divorcee may find herself without the necessary skills or experience, leaving her vulnerable to
making bad decisions or no decisions at all.
With this in mind, we wanted to create a step-by-step approach to help a surviving spouse or recent divorcee get on a sound financial footing. This could also benefit people who have inherited or received assets and are unsure about whether they should make changes to their portfolios or advisors.
The first step is to engage an outside professional with expertise in the financial world, as a chief financial officer (CFO) to assess the situation. He should review your current assets and understand your long-term plans and goals. What are your current expenses and liabilities, such as a mortgage? Who are your current advisors and what services are they offering?
After building the full financial picture, an outside professional can identify any current and potential issues with your estate planning, life insurance, accounting firm, investment portfolio or financial advisor. For example, in the case of a divorcee, has her estate planning been updated to reflect her change of status? Did she inherit a portfolio that was more suited to their spouse/ex-spouse’s outlook, but might be too risky for a widow or divorcee? She may prefer to protect the value of her portfolio or rely on its income stream to cover living and household expenses.
Protecting the interests of vulnerable clients, such as widows and divorcees, is one of the most valuable services an outsourced CFO can provide. However, there are other reasons to engage an outside professional; it may be easier to speak with an outsider about the ABCs of financial products or investment strategies; there is an educational benefit that can empower a widow or divorcee for the years ahead.
An outsourced CFO can also discuss personal goals, family-related issues, and better understand the person’s ability to tolerate risk. Having an unbiased advisor will enable their client to best shape their overall financial plan. That professional should be able to assist with regards to their investment portfolio, life insurance policies, estate plans and other financial matters.
Once you understand the “big picture”, a widow or divorcee can engage the right financial advisors, attorneys and accountants to implement her plans, and face the future with renewed financial confidence.