It can be tough to involve your spouse in the family portfolio. There is often a natural division of labour in households. If one person is looking after the family portfolio, the other spouse may have little motivation to become involved. The family portfolio, however, is a lot different from most other tasks.
Spouses are deeply involved in the outcome of investment strategies. The worst case scenario can arise If the person who is running the portfolio happens to pass away. The surviving spouse may have little experience, yet be required to make important investment decisions almost immediately.
It makes sense to get your spouse involved, but it's not always easy. I have been a witness to failed efforts to involve an unwilling spouse in a portfolio review. Bill, (the spouse who prefers to stay out of investment stuff) is dragged to a portfolio review by Mary, (the spouse who manages the portfolio). The review ends up in a conversation between Mary and the advisor.
The conversation centers on the current portfolio, what stock is up, what stock is down. Mary and her advisor talk in depth about what might happen over the coming 12 months to interest rates, to oil and to exports.
Fighting back yawns from the sheer boredom of it all, Bill tells Mary that he would rather chew tinfoil than go to another one of those reviews. Mary is annoyed because she can't understand why Bill refuses to become deeply involved in something so important.
The problem is not that Bill isn't interested in financial matters, he just isn't interested in this particular aspect of financial matters. When you think of it, conversations about asset price movements and market forecasts are secondary to things like goals, risk tolerance and family priorities.
Consider taking a different approach to involving your spouse. First, make it a conversation between the two of you. Your financial advisor can stay out of it for now.
To move the conversation off of market blips and tips, try asking yourself and your spouse these questions:
What are you worried about when it comes to money?
What are the best opportunites we have right now?
What advantages do we have as a couple in dealing with money?
What do we want to do for our family members (kids, parents, relatives)?
Where do you see us in ten years? Twenty years?
Where do you want to live in ten years? Twenty years?
What are we doing for work in ten years? Twenty years? Thirty years?
What do we want to do for the world at large?
How much do you think we'll need in dollar terms? How should we go about getting there?
Once you have a more goal focussed conversation, it's not hard to create an investment policy. Short term objectives need to be met with risk-free investments. Long term objectives may be best met with riskier assets. You also might become clearer on each other's retirement plans. Your financial advisor can now add real value by recommending different asset classes to best meet your goals.
