Q. I know less about investing than my spouse, and we use a financial planner. I feel like the planner sides with my husband and that I’m sometimes bullied into being more aggressive than I want. Am I being defensive or could they just both be right?
A. Sharing responsibility for the family finances is something more couples should do.
It is not uncommon for one spouse to have more “control” over the household finances than the other, said Altair Gobo, a certified financial planner with U.S. Financial Services in Fairfield. It is even more common that one spouse takes charge of the investing while the other makes sure the bills are paid.
But it is critical that both spouses at least have an idea of what’s going on, Gobo said.
“For example, wills, trusts, and other documents need to be discussed and understood. A `document locator’ indicating where all documents, financial statements, brokerage accounts, bank accounts, tax information, computer passwords, etc. should be created and put in a safe place so it is available when needed,” he said.
Indeed, we’ve heard many sad stories about a surviving spouse having no concept of where a family’s finances stand, and if the person in charge of the money dies first, the surviving spouse is in for a very difficult job.
“I have seen too many widows come into the office with no clue as to her finances because `my husband handled everything,'” Gobo said.
Now, you said you feel that your financial advisor sides with your husband more often. There could be a very good reason for that.
“It may very well be that being more aggressive is appropriate,” Gobo said. “You should explain to your spouse and advisor your feelings of being bullied and ask them to be patient in explaining the reasoning for any recommended portfolio.”
Gobo said when it comes to determining your financial plan or investments in particular, your advisor should address both your concerns regarding goals, objectives and risk tolerance. Everything should be explained so that you are both comfortable with any decisions made.
“Whether or not the portfolio should be more aggressive depends on everyone’s understanding of risk and your ability to accept the risk,” he said.
Plus, it’s possible that you need to take more risk in order to reach your long-term financial goals. If you don’t want to follow the plan, you may need to choose an alternative lifestyle for your later years, such as working longer or spending less so your money won’t run out.
There’s no right or wrong answer here.
“Like everything in life and marriage, it is all about compromise,” said Jerry Lynch, a certified financial planner with JFL Total Wealth Management in Boonton. “You both need to invest in a manner that both of you feel comfortable.”
Lynch said you need to understand your “pain threshold” and communicate that to your advisor.
“For example, an 80 percent stock portfolio has the ability to lose in a 2008-type market 35 percent of your money, and in an average negative year, your portfolio will go down around 11 percent,” Lynch said. “If that is more pain then you can take, you need to take the stock allocation down a little to where you can remain consistent and also sleep at night.”
You should also consider having a consultation with a new financial advisor, and this meeting could either confirm your feelings or make you see the current advisor’s recommendations differently.
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