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Welcome to another Insider Insights podcast. I'm Tina Beckwith. In a recent conversation, we explored Suzanne Norman's research paper, A Widow's Walk to Financial Confidence, which examines the financial, emotional, and practical challenges women often face after the loss of a spouse.
The timing of this discussion couldn't be more important. Over the next two decades, trillions of dollars will transfer to widows as part of the great wealth transfer.
In fact, research shows that approximately fifty four trillion dollars is expected to pass to widows through two thousand and forty eight with ninety five percent of those assets going to women.
Now for financial professionals, this represents far more than a demographic shift. It raises important questions about client relationships, financial confidence, retirement income planning, caregiving, and how advisors can best support clients during one of the most difficult transitions.
Joining me today is John Carroll, a longtime financial services leader.
John has spent decades working with financial professionals and firms across the country and brings a unique perspective on what these demographic and behavioral shifts mean in practice.
John, welcome.
Hi, Dana. Great to see you again.
So, John, let's start with the big picture. When you look at the demographic trends outlined in Suzanne's research, why should financial professionals view widowhood as both a client need and a business imperative?
I I mean, the trend data in Suzanne's report was unbelievable. Was eye opening. I mean, fifty four trillion and ninety five percent are numbers that get your attention.
What's interesting, though, is you go a layer down into the data. I thought this was interesting that about half of that is going to women who are high net worth clients. Right? So wealthy clients.
But, also, the stats show that over fifteen percent of women of widows live in poverty. Now not saying that's a market for advisers, but it it shows the broad spectrum of the scenarios here. You have a lot of it going to very wealthy people, but almost as much going from them all the way down. So it basically gets that there isn't this one size fits all, which makes it hard, but the client need is clear.
Right? It's a huge asset base with a real need for service and support. So that's half the equation. But, also, it's a specific and very large demographic, so it's scalable.
So when you have need and opportunity that can be done on a large scale, that is the best combination for a financial adviser to grow their practice.
Yes. You know, to your point, it's gonna be a significant inflection point.
And we hear a lot about the great wealth transfer, but Suzanne's research really highlights that a significant portion of that wealth will first move to widows. You know, what do you think many firms may be overlooking about this transition, and what risks does that create?
I think it's huge risk, but I don't know how firms are overlooking this, certainly not in the way that they used to. Right? This is a shift that has happened. These firms are smart.
The people in them are smart. They see these trends coming, but it's hard to to turn battleships sometimes. Right? You take the traditional scenario.
The primary breadwinner, generally the husband, was the key contact, and the spouse the spouse was engaged when he or she wanted to be.
But what I'm hearing from advisers today, gender isn't as much of a factor. It's not the husband and the wife. Right? That has changed a bit. But there's still the practice where one spouse is generally the prime primary relationship.
And in cases where there's a widow wife, the risk is still there that the relationship will be lost.
Somebody said something to me I thought was so interesting that through this relationship, the importance of building and working the relationship, even if one is primary, one is secondary, is that if it doesn't go well during the married years, that when the the event comes, you know, unfortunately, when one of the primary relationship passes away, the spouse has already made their decision whether they're gonna stay or go because it's based on history. Right? So I think that was interesting to me because a lot of times I think people think, oh, the husband will die. I'll just shift over and I'll really support and help the wife.
And by then, the wife is like, either, yeah, you were you were terrific for my husband. You were you were respectful of me. You let me engage how I wanted to engage, or you didn't. But if you didn't, you've already lost.
Right? So I think that's a really important piece of the risk aspect here that that the surviving spouse needs to say, look. This is how I wanna be engaged. Some might be a lot.
Some might be a little, and that will change how you engage with them. But if you take the the tradition, like, they really just wanna be involved in, let me understand what's happening. What are we doing? And then when I have a question or something, make sure you answer it.
So respect how I wanna do it. And then I you know, then you can still work the primary relationship. So I think that is interesting. It really comes down to respect both spouses, but especially the surviving spouse if you want to keep that that relationship in the event of a death.
Well, and to your point, it needs to happen in advance. Right? It's a relationship over a period of time. Right.
You can't start after the event. Yeah. You've either won or lost at that point. Anyway, if you won, great. There's a good chance that you lost if that's when you're developing a relationship with the other spouse.
Yeah. And what is the statistic? I think it's seventy percent of widows will fire and get a new adviser in the year after the event. Yeah. And that's just staggering. And it says that there's a real opportunity to build the relationship as you're saying with both the primary and the secondary.
And again that sums up the fact of what again the anecdote I was told which is you've already won or lost. If seventy percent are leaving that means they had already made up their mind in such a short period and you lost. Right.
Absolutely.
And that doesn't have to happen. It doesn't have to happen.
It doesn't. And you know I think that leans into the notion that comes through in Suzanne's paper where you know, widows often need emotional support, education, and the guidance. It's not just about the investment recommendations. You know, so how do you see the role of that financial professional evolving to meet those needs?
Yep. Yep. I I mean, I think what she that is a critical factor in these relationships. I think Suzanne did a really nice job laying that out. The big picture is advisers need to be trained, right, or or be capable of emotional support and empathy. It may not come naturally to everybody.
But, again, advisors have been evolving for decades. Right? What used to be stockbrokers way back in the day, then they were just brokers and financial advisors. Well, now they're full fledged full fledged financial planners in many cases.
Right? So and and, frankly, the research shows that as you move along this spectrum, women might be better than men are at this role because as you move through that, it does become more about the relationship and understanding not just the numbers and the charts, but the needs and the desires and the concerns of their clients. Whether it's male or female, doesn't matter. Right?
So I think that's a big one.
And, women might be a little better. Research has shown that. So what you've seen too that with with the great, you know, they got the great great wealth transfer. Right? Suzanne talks about it.
That is seen as a real catalyst for the tremendous growth in female led advisory firms. Now, again, women still only represent about twenty five or thirty percent of advisers, but the growth rate has been tremendous. And a lot of it, I go back to your stat, women leave, they look for somebody else who not only can they relate to, but who does have empathy perhaps or who has understanding or who makes it something that's a little bit simpler. And I think the key here for any adviser is you've gotta move down this the path to a holistic relationship.
It's not just about investments anymore. Right? You've gotta be talking about the family. What do they wanna do with their money?
What is their income planning and retirement? Right? And, ultimately, estate planning. So all of that goes into it.
That is far, far more than stocks, bonds, cash, asset allocation that that it was, you know, generation ago.
Yeah. And what you're describing, I think, gets to the notion of trust in the relationship. And that's important all the time.
So maybe delivered a bit differently when the women who are widowed are really in a vulnerable position at that point in their lives.
Yeah. Absolutely. Absolutely. And there's so much that goes into it. I'm sorry. Go ahead.
No, I was gonna ask you because so many women may have been in that secondary role and find themselves having to make financial decisions independently for the first time in their lives. What are some of the steps that advisors can take to help those clients kind of build the confidence they face even early on?
Yeah. I mean, I think that's the key statement that it may be their first time.
Mean, think about that. You've had this devastating loss, and now you're thrown into you have to make a hundred decisions, right, about things that you may never have either understood or had any interest in, frankly. Right?
They may not have been involved. So I think, as I said before, the degree to which they will were involved will clearly determine, you know, kind of what steps are necessary to to to get there, but it also makes it clear that there is no single approach. You can't have a cookie cutter with this. Right?
You have to think about who am I talking to? What is her situation? And where are we in our relationship? And that's completely different.
Right? So I think it's a couple of things. You touched on what I think the most important one is you've got to build trust early.
Right? Think like a fiduciary. Make her feel that it is all about her and not about you. Being the trusted adviser is the key to the whole relationship. Show empathy. Right?
Again, different people do that different ways. I think it's don't overwhelm with questions and technical information.
Nobody cares, right, about that. And you've really got to understand and get a feel for it. You know? And and one of the biggest problems or or not problem, challenges that a widow will have is they there's a lot of you know, you're dealing with grief.
You've got a lot of things coming at you, and there's a feeling that sometimes you just need to make quick decisions to get rid of them. That is a terrible plan. Right? So one of the things that a trusted adviser can do, and I saw this, I thought it was an interesting phrasing.
It's like, it's now soon or later decision making. Right? And, basically, it's helping them understand.
These are the key things you've got to do right away. They might be legal things or account name, you know, whatever. But these are what you have to worry about. Don't worry about the rest of it.
We'll get there. That alone, in my opinion, is like, okay. I can step back. You're helping me take a jumbled ball and kinda straighten it out for me.
That just seems to me something incredibly important if you were in that scenario.
Simplify your language.
You know, try we are a business of complexity, and our language reflects that. You have to step back and think about, okay. This might be someone who does not know what you're talking about. Right?
So try to keep it simple. Make it e as easy as you can. It's not always simple. It can't always be simple, but you gotta be thinking about normal words, normal speak, stopping to say, do you are you with me?
Are you with me? Right? This is sounds obvious, but it's not to everybody, especially people who are more quant oriented. Right?
More numbers and portfolio and stats. This is very different for them. Right? So this is not the time to be thinking of making portfolio changes or looking for business opportunities.
That time will come. But right now, it is about trust. And, again, hopefully, the trust was built before the event, not then. But if it hasn't been, this is the time to really focus on her on her needs and doing what she needs and not coming in too hard.
Yeah. You know, I I love the framework that you talked about, you know, now, soon, and later. You know, one of my favorite phrases is it's a journey so that that would take a lot of pressure off.
Now looking ahead do you think that supporting widows and solo agers will become more of a core competency for successful advisors and what will separate the firms that really thrive from those that might struggle a bit in that type of situation?
I have to think widows and divorced women are already a core client demographic. It may not be a core competency, but it's certainly a core client demographic, and successful advisers have seen that and have adjusted their practices towards them. They've always dealt with widows. Right?
That's not something new. I do think this the the growing population of wealthy divorced women or wealthy solo agers, as you call them, is something kinda new. Right? That's not something that was thirty, forty, fifty years ago.
So I do think that that's new, but I think they're adjusting to that.
This doesn't mean the industry as a whole is doing that. And I do think there are still many who are thinking in traditional ways. That's gonna hurt them. They're the people and the firms who, you know, will are are missing not only opportunities today, but significant opportunity tomorrow as, you know, as they this cohort grows.
So, again, when you think about what a successful firms have to do, it comes down to training. Right? You you have to get you have to be trained in what are the immediate short term and long term needs of these cohorts. You know, specifically, widows is gonna be the most dramatic of that.
Right? But, you know, unique difficulties faced by divorced women, and they are very, very clear. They've been deeply researched. And the concern of retirement readiness for solo agers, these are three very different needs, but, you know, that's where it comes down to training and having people understand it.
And I also think a key part of this is who you hire.
Again, you you've already got people in the chairs. There's people building their who have their practices. They've been there, you know, two years or twenty five years. Right? But as you bring people in, they have to be people who have this, and I'm sure firms are doing this, right, that they are looking for those characteristics, for empathy, for, you know, that that that listening skill and not just sort of the hard sell because that's never gonna work with these cohorts.
I think people have that naturally. It's great. But sometimes what will happen is that they say it's a team leader. Right?
They may not be that person, but then they need to be looking to either hire someone or train someone on their team who can be that person. But whatever it is, you know, there's fewer and fewer sole, you know, proprietorships, if you will, in the adviser world. It's becoming all about teams. So firms have got to make sure that on their team, somebody is well versed in this and has those skills to be able to not only address it as it happens, but help to retain these clients after the event.
Right? Especially in the case of widowhood.
Yeah, absolutely. And what I hear you describing is emotional intelligence and being able to engage in that way.
Yep. Yep.
Now, John, if every financial professional who's listening to us today could take one action this week to better serve women, widows, or caregiving families, what do you think they should do?
Well, again, there's two groups. It didn't happen yet or or not. Right? So I think if if first and foremost, no matter what it is, review your client base. Look at your clients. You know? Look for people who are in those situations today or maybe in the near future.
Make sure you have a relationship with them. Make sure you have a communication plan, not from you to them necessarily, but defined by her. How does she wanna be communicated with? How frequently?
What topics? Right? That is critical, and it is sustainable for the future. And frankly, if you don't have that, the rest of this doesn't matter.
It won't work.
Yeah. That's good advice.
Thank you so much for sharing your thoughts today. I mean, of the key messages from our conversation is that widowhood is simply not a financial event. It's a huge life transition and it requires empathy, education, and really thoughtful planning. And as we are in this and are approaching the great wealth transfer, Americans are going to continue to live longer lives. Advisors have an opportunity play a really meaningful role in helping clients navigate these changes with more confidence. You know, but for those firms and financial professionals, the opportunity really does exist beyond the asset retention. It's about building deeper relationships, supporting entire families, and helping their clients prepare for life's most significant transitions before they occur.
Now to learn more, I encourage our listeners to read Suzanne Norman's paper A Widow's Walk to Financial Confidence. It's available through LIMRA Retirement Income Institute on LIMRA.com and at limrafinpro.com. Thank you for listening to today's episode. Be sure to subscribe to the Insider Insights podcast series for more conversations with industry leaders and experts shaping the future of financial services. Until next time, I'm Tina Beckwith.
