What’s Working Now: Take a measured approach with widows. Like others facing huge life transitions, widows are experiencing heavy anxieties that may cloud their decision-making. This advisor’s nuanced approach encompasses both the technical and emotional sides of money, and helps clients make sound choices so they can live for the long run.
In this edition of What’s Working Now, an AdvisorRADIO feature in which Horsesmouth members tell us about recent success they have had running and growing their businesses, we hear from advisor Kathy Roth, whose training as a certified financial transitionist (CeFT®) helps her guide widows to make better decisions at a difficult time.
The following article includes edited highlights of Kathy’s comments or you can watch the full discussion below. (professional subscription).
Advisor: Kathy Roth
Years in business: 40+
Firm: Waterstone Financial
What’s working now: Addressing the emotional side of financial decisions with widows and other clients in transition
From teacher to financial educator
I am a girl of the ’60s now in her sixties, which means that the women’s movement has been part of my fiber since I was a little kid. I’ve always been very aware of what’s been going on with my female peers because that’s what the woman’s movement did—it really heightened awareness along the way.
Now, like a girl of the ’60s, when I had the opportunity to go to college, I became a teacher. Many of us became teachers, nurses, dental hygienists, librarians; we were helpers. I always liked the challenge, though, and I like being a pioneer, so I wasn’t just a teacher, I was a special education teacher for learning disorders at a time when that was the cutting-edge offering in education.
I found that I’m wired to be a teacher, but after seven years, I decided that I really needed something different. I found that my peers were starting to become a bigger part of the workforce. Women were earning more money and it was changing the dynamics of couples building toward a financial future. It was confusing for women at the time. That was enough intrigue for me to apply my interest in education to money and women.
This has always been part of my focus from the very beginning. Over time, I have acquired a wide range of interests, skills, tools, and processes that apply to women at various stages along the way. At first, it was how do we accumulate? How do we really understand how this all works? We were buying houses, raising families, doing it all at that stage. Then I found, as we got into our 40s, little by little, divorce was happening. And a little further on, my female counterparts started to lose their spouses; they became widows along the way. So each step of the way, I acquired more skills and added greater focus to what was happening at that particular time, so that I could actually be helpful to them.
Certified financial transitionist
I became a CeFT®, or certified financial transitionist through the Financial Transitionist Institute. This group was started by Susan Bradley probably almost 30 years ago to help advisors “skillfully work with clients during chaotic times filled with uncertainty,” as they say on their website. They train you in how to handle the heightened emotional issues that people have when they are confronted with big life transitions, like widowhood for example, and I work with a lot of widows.
As a financial transitionist, you are trained that there are two sides to money. There’s the personal side that has to do with your thinking, your aspirations, your dreams, your goals, and objectives, and then there’s the technical side and that has to do with the financial plan, investing, and so on. I always lay that out first and talk about those two sides. And then I ask them what their highest priority is. I ask where I can help alleviate stress or anxiety and then go from there.
Then we use that as our baseline, “Where is the anxiety now?” For widows, who may be in a fog after losing their partner, they go, “OK, all of this stuff, I am so fuzzy, I don’t understand any of this.” And until they reach a point where they do understand, we’ll just keep talking through that.
The Financial Transitionist Institute is an incredible source for all kinds of cool tools. There’s a community of us that are very active, and we share the experience because this is a bit of a frontier, and an important one as people are living longer and longer.
Working with widows
Now, as boomer women are clearly in the later stage of life, widowhood is what’s happening with them. It is a tough row to hoe. You hope it doesn’t happen to you, but if and when it does, it’s very difficult. I mean, it’s difficult right now for everybody with investments. But for women that are newly alone, trying to identify a new vision of their future, it’s terrifying.
Widows lose their vision of the future. Everything, every thought they had about the future included their spouse. Even if they were sick, it included them, and when it happens and they’re gone, she loses the vision of her future. Grief is such a strong, powerful process. It’s not just this little emotion; grief is bringing your past to some kind of conclusion and a story that you can live with going forward, and that takes a lot of work. It’s missing the joy that you experienced in the past and it’s coming to terms with the inefficiencies and the hurt and the sorrow that has been part of your past.
You have to knit that into a story that you can live with and go forward with. Hence, what we see is when people talk about their spouse in later years, the spouse turns into a saint. It’s because she’s trying to come to terms with that previous life as something she can live with as she goes forward, and something that she can reestablish as her foundation. That is the emotional part.
Working with widows takes a lot of time helping them do this. Now, we’re not therapists. If she’s not having a deep crisis and needing a therapist, but she is just going through this difficult process, who else does this work? We are the intersection between her life and her money and the power and making it all work. We probably spend more time with her talking about life, practical, daily life and future life and establishing that vision than what a minister would do. We attend to different aspects of that harsh process.
As widows are coming through this process, they really can’t think for a year to three years to seven years. So part of it is keeping them safe from making regrettable decisions because I know they’re not thinking clearly.
I am shocked and dismayed how many times grown children come forward to their newly widowed mother and say, “Hmm, do you think I could have my inheritance now? Because I have debt, or I have kids going to college or something. Do you think I could do that now?” So we try to bring an awareness and tools and processes so better decisions can be made.
We call it the decision-free zone. When I work with a new widow, we have an agreement that if people approach her with a financial request, the widow will say something along the lines of, “Please let me know what you’re thinking, but before I can give you an answer, I must speak with my advisor to see how it will fit in my current situation.” However, because they are a new widow, they likely have what’s called “widow’s fog” and when they come to me, they typically don’t bring back a complete story. I’ll then have her relay that “her advisor said no. But good luck on your endeavor” and if they keep persisting, I will then personally tell them “No.”
Advisors are making this mistake
Okay, the mistake that most advisors make, male or female, when they’re trying to be helpful with widows, is believing that being nice and listening deeply is not enough. They think “I’ll have heartfelt conversations with her,” but they don’t know what to do with it after that. That’s not going to move it along. What does move it along is taking the information in, helping her see what’s going on, giving her what she needs, and helping her make a decision. It’s got to be her decision.
That’s the second misstep, with male advisors particularly, is taking over. They say, “Well, little lady, you have come to the right place. I am strong and smart and I am going to be your warrior.” And she’s looking to replace that missing role that her husband did, so she looks for the next willing male.
I have contacts with funeral home directors often, and they say, “You would be surprised the number of women who when the funeral is over and then the ladies show up with boxes of financial information, wanting me to help her sort it out,” and they go, “Ma’am, when your check clears, I’m kind of done. This isn’t what I do.” But the widows don’t know where to go.
Yes, they bring their money issues to the funeral director because they don’t know who else to go to.
That was the last service that had been really helpful, and they’re looking for somebody who they can trust that will help him take care of it. They don’t know who to trust, and there’s a lot of forces coming at them, a lot of people offering advice—and again, advice is not really what she needs.
I am a ’thinking partner’ with them
I told you I was a special ed teacher, and that has been a great background because junior high kids are just out an elementary school. Their first chance to operate independently. And they are, “Yep, I’m cool, I’m cool. I get it. I know. Yep, yep, yep.” But in their eyes, I could tell whether they understood or not, and I just kept working until the light bulb does.
Well, when it comes to money, adults are the same thing, they’ll come forward, “I’m cool, I’m cool. I don’t want you to take advantage of me. This isn’t my first rodeo.” My little special superpower is that with adults, too, I can see in their eyes if they understand or not. And when the light bulb pops open, then I know that I can proceed to the next step.
Some people who aren’t my clients may come in saying, “Make me money, and I’m out of here.” But that is not what I do. Really, what I am is a thinking partner with them. There are a lot of people that are looking for a thinking partner.
They are saying, “Don’t tell me what to do. Help me think through this, because ultimately I own and live with the decision, and if I just outsource it to somebody and don’t understand when it doesn’t work like I expect it, the anxiety ratchets up even higher.”
Men, women and money
You asked what the differences are between men and women with money. Of course it varies person to person, but let us start with the core message that you learned as a child about money, that’s seated deep in your psyche. Families provide a different message for females than they do males. For example, males still are expected to be the primary breadwinner, and so much in the male world prepares them for that. Sports prepares them for that.
Females, however, often were daddy’s little girl and they were told “Daddy will take care of you.” Are you the family’s little princess and will Prince Charming come to take care of you? I mean, there’s deep-seated things that are there that are very hard to shake.
This is not intellectual, this is deeply emotional, so with clients, you have to climb over that first, before you can get to the intellectual analysis of talking about the markets and market performances and beta and alpha and all the things that we’d like to do.
And for both men and women, did your family live with abundance or was scarcity part of it? Did they talk about money at all, or it’s a big mystery, or was it out there, and everybody participated? You bring that to your own adult life and then you bring it into a dynamic of a relationship. So when a couple comes in, you have two of these deeply seated belief systems operating below the surface that nobody knows how to talk about.
And it rarely comes up in conversations. If clients are coming in as couples, they haven’t likely had that conversation. So for us to bring it forward, again, it requires conversation. And this isn’t one conversation and we are done. It really unearths itself little by little over time.
East of the Mississippi
We do a lot of client events; some that are couples-based and others are only offered to women where she’ll come on her own and be exposed to other ideas. The female events focus on a topic because I want women to be in an environment where they think about these ideas on their own without a male spouse taking over, if that happens to be the dynamic of the couples. If he feels “I’m in charge,” whether that is spoken out loud or not.
One of the things that I talk about is how to handle the finances and the money issues in your household. We know statistically, women are generally in charge of 90% of the money that comes into the household. I call it “east of the Mississippi, west of the Mississippi.” In the home, the woman is in charge, that’s east of the Mississippi, it’s home and hearth. It’s known. It’s about being the purveyor of goods and services that makes family life go. The husband takes care of west of the Mississippi, the wild frontier, which is dealing with investments in markets because everybody thinks that he is in a robust intellectual environment of other men.
West of the Mississippi, she’s happy to hand that over to him because she has her hands full with home and hearth and work and kids and aging parents because the women are the ones who are more likely to look after them, so there are all kinds of topics that they worry about, but underneath, the seed is we worry about money, and she is just hoping that he is doing a magnificent job, and that it will happen.
Men, I think that as they’re having lunch and they’re talking about, “Hey, the markets…,” there’s a lot of bravado and weird stuff that goes on, but they are building in their investments background and knowledge base generally off their peers. So through the women-only events, I’d like to have women at least have more experience talking about money with their peers so that they can reflect on, “What do I really think?” And they can hear other women talk about it as well.
Getting couples to participate as a couple
We do have a diverse client list where the dynamics are dramatically different. Sometimes the wife is the leader, and in that case, generally the fact is that she inherited money. And if she inherited money, it means that money probably was a strong dynamic in her childhood, so Dad was more apt to talk to her or to talk to the family about what’s happening with it. Oftentimes it was a result of owning a business.
But when she inherits money and she feels the responsibility of taking it, she knows that it’s coming, and she is more apt to prepare herself. So we have lots of couples where she comes, and she is the driving force, and he comes with the different family dynamic, and he lets her do that.
With all couples, we try and encourage them to make decisions together and we give them structure to help them make those decisions together. There are tools that we use in the office meeting and then we send that same tool home to have them think about it and come back with their input. So we try and facilitate their decision-making together. Bottom line, they are very busy and they’ll each assume their role and until there’s some kind of a big crisis or big decision that has to be made—and that’s when they’re more apt to make the time. But otherwise, life encroaches.