Although this story covers financial advisory services for widows, much of it applies to divorced women as well.
Where Widows Go
Most widows switch advisors when their spouses die-but that has more to do with the advisors than it has to do with the widows.
By Susan Bradley | Oct 1, 2010
My friend Rick coaches financial advisors and pro athletes on how to stay confident and keep motivated. A relative of his wife was widowed and wanted a new financial advisor because she didn't have a relationship with the one her late husband hired, but she didn't know how to find one. Rick recommended someone he thought would be perfect. To be helpful, he went along to the initial meeting for support.
A referral like this might sound like a slam-dunk, but that's not how it worked out. After an hour of telling this new widow how he invested only in exchange-traded funds (ETFs) and why his portfolio theory was superior to that of his peers, the prospective advisor lost the client.
Why? Not because the widow didn't know an ETF from a UFO. She walked out because what she wanted was someone who cared about her and would spend time listening to her. This advisor had no idea who she was or what mattered to her.
If Rick hadn't been at the meeting he wouldn't have blamed the outcome on the advisor. But it was obvious that a new widow would need to be heard and understood. He assumed that any smart and experienced advisor would behave accordingly. But he didn't. He's not alone, and advisors are losing business as a result. In fact, recent research tells us that 70% of widows seek out new financial advisors after their husbands' death.
WHO THEY ARE
Part of the problem is that advisors think widows are little old ladies who have never managed anything but their households. Reality check: the average widow in the U.S. is 56-years-old and she probably has a college degree; she's worked outside the home, perhaps earning more than her husband; and she has at least managed the household finances. These are generally capable women experiencing a very stressful and confusing life transition, and as a result their normally high capacity to function is temporarily diminished.
Widows are usually both aware of their limited capabilities and frightened by them. They don't want to make a mistake and have no idea when their normal coping skills will permanently return, so they feel vulnerable and often paralyzed.
At the same time, they're getting advice from all directions. Sometimes it's good advice devoid of sensitivity and/or delivered at the wrong time. Sometimes it's self-serving advice calculated to strike at their weakest moment. This all feels overwhelming and tough to sort through-like high-volume noise they just want to silence. Widows need people who understand this. People who "get" them-who hear what they say even when they can't get the right words out.
For example, Patricia felt like a ship barely making it back to port after being hit by a torpedo when her husband died. All her defenses were down, her navigation system was broken and all she could do was keep moving, praying for safe passage. She needed a barge to pull her boat safely to port.
She shared this analogy with the advisor she and her husband worked with during the condolence phone call. His response: "I'm sorry for your loss. When you come in to sign the papers I'll keep the investment recommendation brief."
Patricia never showed. Instead, she asked other widows for recommendations and two suggested the same advisor: a woman who had also lost a spouse. The new advisor gave Patricia plenty of time during their meetings, didn't pressure her to act before she felt ready and set generous and movable timelines for making decisions.
WHAT WIDOWS WANT
You don't have to be a widow or a woman to work well with widows. But you do need a discovery process to determine their pace, comfort level for addressing decisions and personal communication preferences. They want to know there is a way to bring order to their chaos-steps to follow guided by someone who knows the way.
That's because in the early stages of grief some of the worst decisions and commitments are made. Rather than waiting until things settle down, the widow needs an advisor with a process for keeping her safe while she takes time to heal. And she needs that person as soon as possible.
The process begins by identifying what's urgent and separating it out from competing thoughts and fears. Only after the advisor helps the client identify her immediate needs should he or she make any recommendations. Those recommendations should be delivered in a way that helps the widow gain the clarity she needs to make confident decisions.
Before Elizabeth's husband died he ran the day-to-day part of their successful mortgage business. His death was unexpected and the timing couldn't have been worse-it was at the height of the 2008 financial crisis, when the real estate market was crashing and the mortgage industry was collapsing.
Elizabeth was in shock. The grief hadn't even sunk in and she was faced with huge, immediate decisions that would shape the rest of her life: close the business, sell the house, declare bankruptcy or just curl up into a ball and hide. Despite the reality that she had managed the business and family finances and had reasonably good insurance and savings, she panicked and wanted to sell everything and run away. Her physical and psychological state was far more threatening than her financial situation. She couldn't read financial statements or insurance policies, and each piece of mail felt like a 100-pound weight.
Fortunately, Elizabeth's advisor knew her well. He routinely presented his recommendations to accommodate her need for details and reports. He understood she was conservative, always thinking of safety first. He needed her to see that she was okay and could weather the market crash, and he knew that she was suffering from diminished capacity.
He mapped out what needed to be done immediately and made a list of everything that would be safe to put off for a few months. He also created a simple cash flow overview using clear terminology, graphics and arrows to show her that she was okay and would be okay going forward with or without the business.
One year later, the mortgage business is doing well. Elizabeth intends to run it for at least 10 more years.
Elizabeth's advisor successfully communicated with her because he used a system based on the realities of her state of mind and emotions. Here's what the system looked like: He sorted and prioritized what needed to be done to give her time to grieve without worrying about going broke. Once she could see she was not in financial ruin, she was able to allow a trusted employee to manage the minimal activities of the business while she withdrew into her first cycle of grief.
A GO-TO FOR WIDOWS
Dealing with people in emotional crisis requires both understanding and real skill. Here are some best practices:
- Listen with empathy, beyond normal active listening. Listen to and respond to her answers, ask the logical next questions.
- Realize she is in the early stage of grief. This may be an intense, almost immobilizing time for her. Let her know that most things can wait until she is ready, but there may be some that need more immediate attention.
- Be available to talk about more than investing. There may be questions about whether she needs to continue to work or can take a leave of absence, or even retire. These are big questions that will not have immediate answers.
Advisors who can guide someone through one of the most difficult life passages are rare and treasured resources whom widows want to share with every other widow they meet. Embrace their needs and watch your business flourish.