“Yeah, but what do you actually do? What do you do to show people how to manage finances during divorce? I mean, how much financial planning can you do during a divorce, anyway?”
The greatest thing about deciding to focus in a particular area of advice has been how much I’ve had to learn. And how, by way of that long, steep learning curve, my perspective about advice has changed.
Because I’ve come from a very traditional financial planning background – started at one of the big 4 banks, got trained in ‘advice’ (see: selling), then bump around for a few years learning the limits, opportunities, skills and lessons that come with financial planning in Australia.
And under that traditional model, it can be hard to provide financial advice for people going through divorce.
In that traditional model, you’re paid for advice around financial products. That’s how the whole thing is structured – legally, financial advice is about financial products.
You might think that’s stupid, regressive, limiting, infantilising and every reform since that original sin has involved putting different lipstick on the same pig – as I do – but here we are.
Working out how we can help within that structure bends the mind a little.
Because the last thing somebody going through one of life’s great upheavals wants to talk about is their income protection insurance, or reviewing their superannuation, or the benefits of moving up – or down – the risk curve.
So – what do I actually do to help people through divorce?
Well, the best way I can think of to explain it is to tell you about Zelda.
Zelda knew her marriage wasn’t perfect.
She’s in her 60s now and knew that there were many parts of her relationship that were not normal. But that’s how it had always been and she’d become accustomed to it. For a multitude of reasons, she’d grown to accept that what started out as a fairytale romance had gradually faded into a repetitive story of dullness.
Then the kids moved out and she decided that she didn’t want to spend the rest of her life the same way.
She found herself a great family lawyer who set out her options – mediation, collaboration, litigation – and what often happens in their experience. Zelda knew her husband and knew that the only option was litigation, so they initiated proceedings.
Other pieces do a better job of detailing the uniquely painful monotony of the litigation process, so we’ll skip over those specifics.
To the point where, after much back and forth, Zelda was presented with the final orders outlining her property settlement.
Between the apartment, the super fund, the various investments, the other property and their cash savings, she would walk away with around $2m.
Was it a ‘fair split’? No, it very rarely is.
But it was enough.
Enough for her to start thinking about the future and the kind of life she wants to lead now.
To start thinking about what she’ll need and about the various options in front of her.
Enough that when her lawyer asked her “what are you going to do now?”, she could say “I have no idea”, with a wan smile.
And, finally, enough for her to realise that she needs to get some advice around what to do with the money.
Recognising the position their client was in, Zelda’s lawyer got in touch with us and asked me to call Zelda.
After a meaningful, teary conversation on the phone, we booked a meeting in our office. Where we had an open and honest exploration of her current situation and future aspirations.
We talked, a little, about the path she’d had to take to get there, but mainly we focused on the future.
What does her new life look like – now, and in 5 years?
What are some things that Zelda aspires to achieve, own or experience now?
What can the money buy that will bring her joy?
Then we talked about some of the speedbumps and roadblocks that might get in her way.
The disappointing family members.
The complexity in her finances.
Her inexperience in handling money.
The damage to her ability to trust.
Her kids health.
Her son’s continually precarious finances.
Then the really valuable part of the conversation – what would it mean to her to build this new life for herself, to be prepared for these potential speedbumps, to feel in control.
More tears, but these ones came with a smile and a glint in her eye.
Now, into the mechanics.
After our meeting, I prepared a detailed engagement proposal for Zelda to consider:
Here’s where you are. Here’s where you want to go. Here’s what could go wrong. Here’s how we can help.
And this list included several traditional financial planning elements:
Executing the shift of her super from the SMSF to a new fund, with a more suitable portfolio.
Implementing an account-based pension to fund her lifestyle for the rest of her life.
Structured cash management advice for her personal, superannuation and pension cash balances.
But it also included non-traditional elements:
New, detailed budget
Plan to fund her new home in sunnier climes.
Liaising with the real estate agent helping her with the new home.
Referrals to excellent professionals to help with her estate plan, home insurances and removalists.
Developing a personal goal hierarchy.
Preparing a plan for the project of moving from Victoria to her new, northern home.
Discussions with her family lawyer around specifics on the property settlement.
Lots of conversations, correspondence, meetings and support while Zelda navigates this immense transition.
All of these elements in service of giving her the best possible chance of building her best, new life.
And, the next part of our proposal – here’s what our services will cost.
I’ve talked about how I price my work before, so I won’t labour the point. But, broadly, we price the individual tasks, allow for the complexity and value that our work addresses and provides to come to a final figure.
This provides a final figure, which we divide over the length of the engagement.
In this case, our fee was $12,500 for the six month engagement.
To some, this might seem egregiously high; but for somebody like Zelda – acutely aware of what she needed now, the limits of her experience and knowledge and the immeasurable value of having somebody she can trust – it was a bargain.
On we went. Regularly meeting, talking on the phone and with an email log that’s pushing the limits of our cloud storage (not really).
We provided multiple pieces of advice, via several formal advice documents.
We implemented recommendations, bought investments, tracked down funds, reconciled accounts and set budgets.
We referred Zelda to excellent estate lawyers, a fantastic general insurance broker, a reliable and well-priced removalist.
We set up term deposits, bank accounts, super funds and pension payments.
We mapped out her new financial future so she could see where she was heading.
And, most importantly, we answered her many, many questions respectfully, without patronising her or making her feel silly.
Until we were all done.
And Zelda was ensconced in her new home in the sunnier climate she was dreaming of.
Zelda sent me a photo the other day, of her new 6-seater dining table.
She’d seen one she wanted, before we met, but wasn’t confident in her finances to spend the money commissioning the piece.
But after seeing ‘her numbers’ we put together for her, she went straight home and ordered it. 12 weeks later, there it was, to the side of her living area, amongst the bay windows.
It’s a beautiful piece too, made with care by a true expert. Well worth what Zelda paid for it.
Oh, and the photo was a selfie.
And you’d be hard pressed to ever see a bigger smile.
So, yeah, that’s what we do.
We provide the traditional mechanics of financial advice – the investments, the cash, the super, the pensions, etc.
We help with the non-traditional bits too – budgeting, projections, Centrelink, the rest.
But we also help in every other way possible – by facilitating, referring, introducing, chasing, pushing, pulling and doing everything we can to give people the best chance at their new, best life.
We’re the bridge from the turmoil of before, to the quiet excitement of after.
And, sometimes, we help people get to the point where they can absolutely grin about their rather expensive piece of handmade furniture…
*Obviously, I’ve changed names and details in the interests of anonymity. And Zelda is an amalgamation of the many people I’ve been fortunate enough to help these last few years.