Numerous studies suggest that women often defer to their spouses or partners when it comes to making long-term financial decisions, a choice that can put them at a distinct disadvantage in the event of divorce or death of a spouse and significantly interrupt a woman's financial path.
While divorce rates for younger couples are steady or declining, research shows that late-life divorce is rising.
According to Stats NZ, people are divorcing later in life, and it can have serious implications for their finances, especially for women who defer to their spouses to manage critical, long-term financial decisions.
In 2017, the median age at divorce was 47 years for men and 44 years for women, compared to 39 years for men and 36 years for women in 1992. For some couples, this could mean unravelling significant assets and finances that have been shared for decades.
The recent survey by UBS found globally only 23 per cent of women take charge of long-term financial planning decisions and the majority (58 per cent) defer long-term financial decisions to their spouses, putting their future financial security at risk.
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This divided approach leaves many women ill-prepared to manage financial needs after critical events in their lives, such as divorce or the death of their partner. Also, lack of encouragement and the belief that their spouse is more money-savvy keeps women from investing and financial planning.
The study also cited that 76 per cent of widows and divorcees wish they had been more involved in long-term financial decisions while they were married, rather than trying to navigate them while coping with significant life changes.
What does this tell us? Women achieving independent financial fitness is crucial to assuring a stable future for them.
Tackling a divorce or death of a spouse can take a great deal of time to process emotionally, and it may be difficult to keep money concerns from being pushed to the back burner. But a trusted financial adviser can help bring finances into focus by navigating the immediate financial burdens and ensuring long-term financial stability, while keeping in mind the sensitivity of the situation.
The conversations with your financial adviser must include income sources, estate planning, emergency savings, retirement planning and adequate insurance for life and health.
The Proactive Approach
By leaving the details to a spouse, many women are tragically unprepared to take sole ownership of their financial affairs – they visit a financial adviser during their most trying times to put together a financial plan.
The good news is there's an easy solution to this dilemma: get involved. Knowledge is indeed power. As financial professionals, we have a duty to encourage transparency and inclusion with our clients. By requesting to meet with both spouses during annual review meetings, as well as suggesting our married and single female clients ask questions and take ownership of their financial security.
We want women to not just possess a base knowledge or financial aptitude, but to have a grasp of investments, pension or retirement plans and insurance needs, so they are empowered to take on the responsibility themselves.
· Trudi Vossen is an Authorised Financial Adviser at Stewart Group – a Hawke's Bay-based CEFEX certified financial planning and advisory firm. Stewart Group provides personal fiduciary services, Wealth Management, Risk Insurance & KiwiSaver solutions.
· The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from an Authorised Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz