A Great Untapped Source for Clients: Wealth Management Firms

By John Duffy, CDFA On 08/22/2023

If you are working as a Certified Divorce Financial Analyst® professional, you’ve probably networked with Family Law Attorneys, Marriage and Family Therapists, Estate Planning Attorneys, Mediators, and even Certified Public Accountants.  But you might be missing a big opportunity to acquire new clients if you are not having conversations with wealth management firms.

Wealth managers understand the importance of good financial advice; that is what the industry is built on.  Financial advisors will appreciate the value you bring more quickly than many non-financial professionals.  Before you even explain each of the following clearly defined points, an open-minded and sharp financial advisor will understand your role and how it will benefit their practice and their clients.

1. A financial advisor providing divorce advice to their client couple may find themselves in a lose-lose situation.  One spouse might perceive a conflict of interest and an inability for the advisor to be fair and neutral. The spouse that reluctantly comes to the performance review meetings, if at all, is likely to distrust the advisor now as much as their spouse. “Are they giving my soon-to-be-ex strategies to minimize support or hide assets?” “Those two have always been closer, I bet the advisor will say whatever to keep the account and give me bad advice.” None of this is likely true, but perception is reality.

By the end of the divorce process, no matter how amicable it started, there is usually enough friction to cause one or both parties to leave their advisor. Statistically speaking, women are less involved with finances. According to a 2018 UBS Global Wealth Management Report:

  • 56% of married women leave investment and long-term financial planning decisions to their husbands.
  • Of the female top-earners in the report, 43% said they leave financial decisions to their husbands.
  • 85% of women who defer to their husbands believe their spouses know more about financial matters.
  • Nearly 60% of widows and divorcees said they wish they had been more involved in the financial planning decisions.
  • 56% of women discovered hidden debt, inadequate savings, or overly conservative or aggressive investments that affected their lifestyle and retirement goals.

Who will be blamed, accurately or not, for the financial “gotchas”?

2. Large wirehouses and wealth management firms are extremely regulated and scrutinized. Everything from website content to communications to color palettes are pre-written, pre-approved, and immutable. It is often the safest decision for compliance and management to say “no” to something new and different than to take a chance and run it through all the approvals that will be necessary. With a few exceptions like Morgan Stanley, JP Morgan, and Ameriprise, large firms might allow an advisor to obtain their CDFA® designation and possibly use the marks, but they are unlikely to be allowed to practice the core divorce analysis and advisory services. This is an opportunity to partner with advisors who may have taken the training and recognize the value of the role yet are disallowed from providing it for their clients.

3. Whether you are Collaboratively trained or just collaboratively/cooperatively inclined, it is important for a professional to understand and stay within their “lane.” A financial advisor has a unique and essential role, and a CDFA® professional has a different one. A true partnership between a wealth advisor and CDFA® professional can bring the best advice to the client relationship. 

Educate the advisor on when and how to bring you into the process and what you will be able to do to help the clients. Get permission to keep the clients and advisors in the information loop and communicate frequently. As you are nearing the completion of your process, it will be time to reengage with the advisor so she can create a new financial plan for each of them to define their new financial reality.

 4. Which brings us to this consideration; the clients may benefit from the experience and expertise of many support roles. They list might include:

  • Lending, either traditional, reverse, or portfolio/asset-backed
  • Real estate agent for sales and/or purchases
  • Mental health support such as a therapist, co-parenting specialist, and/or divorce coach
  • Family law attorney (consulting, Collaborative or litigating)
  • Estate attorney to update trusts, wills, and health care directives
  • Insurance agent for new or updated life insurance policies, long-term care, and umbrella policies
  • Business valuator
  • Tax preparer

The list could be extensive. You and the financial advisor should consult on your list of referrals together (and make sure you request introductions to any professionals they work with whom you are unfamiliar with).

You are only a short-term advisor to the couple, and the goal is for the financial advisor to be their long-term guide. Encourage the financial advisor to quarterback the professional team. They may have need of their services again, and they will not forget how good you made them look.

5. All of which is to provide an incredible client experience. Many wealth management firms and teams aspire to a “holistic approach”, but few achieve it. You have an opportunity to assist a couple through one of the most challenging times in their life and provide them with the professional team to address every need, some of which they did not consider or know about. As with any good leader, re-direct praise to the team. If the team wins, the team is going to think of you when they encounter a client who needs your services. Keep the virtuous cycle going.

Now I know several of you are, yourself, a wealth manager.  You may have pursued your CDFA® designation to grow your wealth management practice, and you may be sticking to that plan. If you are a full-time financial advisor and part-time (or effectively non-practicing) Certified Divorce Financial Analyst®, look for a full-time CDFA® professional to partner with. You avoid the potential pitfalls mentioned above, your clients get the support they need, and you have a new referral partner.

Tagged with: wealth management, idfa, financial, certified divorce financial analyst, cdfa, divorce, financial advisor

Blog Disclaimer: The opinions expressed within these blog posts are solely the author’s and do not reflect the opinions and beliefs of the Certitrek, IDFA or its affiliates.