There is increasing evidence that many women that are in relationships and who have retired, or are soon to retire, are concerned that they have little idea of their financial situation, says Michael Hutton, head of wealth management at HLB Mann Judd Sydney.
“In the main, the pattern for baby boomer couples is the same as for their parents, with the husband looking after the finances.
“While this has changed for subsequent generations, I believe that over half of all self-funded women retiring have not really been involved in financial decisions and as a result don’t have the full picture of how their superannuation or other investments work.
“This is causing unnecessary stress about how they will handle their investments and income if their partners die before them – which is a statistical probability.
“It also makes them extremely vulnerable to receiving the wrong advice, and even tracking down where all the assets are, may be very difficult,” Mr Hutton said.
He said that all couples should follow the “4D” approach to managing their finances.
“This is Discuss, Decide, Disclose and Devolve.
“Communication is essential so even though one of the spouses might find it boring, couples should discuss their financial situation regularly, including what the options are and why decisions were made.
“If both partners are involved in making financial decisions then inevitably understanding is improved, and probably better decisions are made.
“I know that some women attend meetings with their financial planner with a “must I go?” attitude, and are willing to leave it all to their husbands, but they really should take an interest and be involved.
“Husbands also have a responsibility to make sure their partners know how the financial arrangements work, and where the assets are.
“This includes having a chart showing how accounts are linked, and what bank accounts and other financial instruments and investments like term deposits, managed funds, and equity investments exist.
“A list of all such assets and how they work – for example the expiry date of Term Deposits – is also essential.
“The final element is devolving responsibility on financial matters.
“Both partners should be able to action accounts, starting from the simple matter of paying bills and checking statements.
“Involvement of both partners will immediately help improve understanding, and increase the comfort level of both,” Mr Hutton said.
HLB Mann Judd Sydney is a firm of accountants and business and financial advisers, and a member of the HLB Mann Judd Australasian Association.
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