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Empowering widowed clients

Laura H. Mattia, Ph.D., CFP

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How to help clients who have lost a spouse gain financial know-how and plan for their own future.

Research shows us that many women are less knowledgeable and less confident about money. We also know that women are especially impacted by stress, and they become less financially confident when they experience high levels of stress.

A recent study found that 61% of women felt uncomfortable talking about money. In fact, they felt more comfortable talking about their own death than talking about money. And 45% said they didn’t have a financial role model to help them.

The good news is that when women receive help to become more financially empowered and feel more financially secure over their situation, they’re more satisfied and they’re more loyal. They’re more likely to tell their friends and families about you, and they’re more likely to stay with you. The time and effort needed to understand widows and what they’re going through is well worth it for advisors.

Financial empowerment

Financial empowerment is a subjective construct. In one model I use of financial empowerment, we say that an element is financial literacy. It’s about having the knowledge and the skills to help you make good financial decisions in your best interest. The second component is financial attitude, which is the ability, motivation and wherewithal to apply your knowledge and skills to financial decision-making. A third element is financial well-being, or the characteristics and traits that help individuals cope better and make them more resilient.

Financial empowerment can be shared with a partner in a marriage: I can be financially empowered, or I can share in my spouse’s financial empowerment. That’s fine as long as that spouse remains in my life. But if there is an end to that relationship, it leaves me vulnerable because I have not developed the skills to make financial decisions. As advisors, we want to focus on the idea of financial self-empowerment with women. They’ll participate, feel more in control and feel more secure regardless of what happens in the future.

Why widows?

Widowhood is one of the most difficult life transitions a person can endure. They need support, and unfortunately, family may not live nearby, married friends sometimes disappear, and other friends don’t know how to support them. Widows are looking for support, and you as the advisor can offer that to them.

There will soon be 13 million widows in the U.S., with nearly 1 million added each year. We refer to this as the widow tsunami, and it’s a fast-growing demographic. The mean age a wife becomes a widow is 59, so it’s very possible that they live a long time after their spouse dies. Studies also found that 70% of baby boomer wives will outlive their husbands, and 80% of women will be single at death.

It’s very common for a widow to show up to our office feeling emotional. Often, widows will feel numb, overwhelmed, lonely, angry, depressed and helpless.
So they’ll have all these emotions wrapped up in this whole experience that they’re going through. Whenever we’re stressed, the reasoning and processing part of our brain shuts down. Instead, our fight-or-flight response kicks in. One of the first things we can do for our widows is help them avoid large, irrevocable decisions when they’re going through grief.

There will soon be 13 million widows in the U.S., with nearly 1 million added each year. We refer to this as the widow tsunami.

Four stages for working with widows

The anticipation stage is for preparation. It’s a time where we can help the widow become emotionally and possibly even financially prepared for what’s about to happen. While many of us don’t have the opportunity to plan ahead of a death, we can help her focus on what really needs to be addressed and see if there’s any way to minimize her grief in the stage to come. 

Then there’s the ending stage, which is the grieving stage for the widow. She may be in this stage for as long as a year, maybe even two years, and it’s a period of heightened emotions. Get her to just talk: This is a time for you to listen to her discuss her emotions and experiences. This also will be a time where she may express some regrets. Take some notes, as you may want to come back to them later.

Then on a whiteboard or piece of paper, do a brainstorming of everything that she thinks needs to be taken care of. Then have her take out a piece of paper, fold it into three sections and write “Now, soon and later” on the top. I have her do the writing because she then internalizes the work and feels more in control.

Next is the passage stage, which is that period of growth and where we can start rebuilding. At this point in time, the fog is beginning to clear. She’s feeling much more comfortable with her decision-making process, and you can start talking to her about doing some comprehensive financial planning and actually looking at her investments and how they’re structured.

Lastly, there’s the new normal or the transformation stage where she’s now living a new life and moving ahead. This is where we can start talking about other things that she might want in her life. We can motivate, collaborate and partner with her to achieve her goals.

Understand that she’s going to have different needs at different times. Being a little bit more sensitive to those needs will help you determine what tools to use and what kinds of discussions you want to have with her.

Spend the time to really empathize and understand what she’s going through. If you do that, you’re going to have a financially engaged, empowered, secure client. I think that’s what most of us are trying to achieve.

Laura Mattia is an educator and speaker on the topic of widows and money. Contact her at  lauram@atlasfiduciary.com.

 

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