Financial advisors are uniquely qualified to play a central role in the divorce process, yet they have failed to adequately market themselves to divorce lawyers. They are the single expert, more than any other specialist commonly used, who are uniquely equipped to address the entire circle of important fiscal matters related to a divorce.
If you consider the range of areas that must be addressed throughout the dissolution process, such as tax implications, benefits, retirement plans, investments, insurance, etc., finances become convoluted very quickly.
Each of these facets is complex enough that it could quite literally require a team of experts to sort out; however, certified financial advisors are well-rounded specialists, with experience in all of these matters.
These versatile specialists have the ability to play an integral role at all stages of a divorce.
Before anything is filed, they can perform a critical preliminary role in advising clients on how to achieve their goals and forecast the ramifications of various fiscal decisions; once a divorce is in progress, they can continue to offer financial advice while assisting the settlement negotiation process; and after a divorce is finalized, they can help clients sort out their vastly different financial situation.
By having a financial jack-of-all-trades in their corner throughout the divorce process, clients can feel much better about their future stability. Additionally, there are several different roles a financial advisor can play throughout the divorce process depending upon the needs of an individual case or their personal preference:
1. They can occupy the position of an impartial advisor to assist both parties in the mediation process. With their insight that encompasses such a variety of financial facets, they are better equipped than either an attorney or a mediator to devise creative solutions to the many contentious issues that commonly drag a case to court. Financial advisors have the capability to assess areas such as income necessity, financial needs of one party compared to the other, which party benefits the most from certain tax considerations and determining which assets in a settlement better serve the long-term fiscal goals of each side, among many others.
2. Financial advisors can also play a behind-the-scenes role as consultant to just one side of the divorce. It is not uncommon for divorce lawyers to have, for example, a CPA who continually renders advice to the attorney or client, but who is not identified as an expert. They are able to simply act as an advisor with the understanding that they will never testify in court. Again, the comprehensiveness of a financial advisor’s knowledge is much more valuable than that of an expert in a single field of finance. While taxes are an important area that must be addressed, they are just one of the many issues people going through divorce must resolve.
3. They can also be identified as an expert, disclosed to the opposing side and will likely be cross-examined if the case goes to court. A common need for a financial expert in this situation would be testifying during a dispute over maintenance. It’s not unusual to have experts from both sides take the stand to testify what is called a “needs analysis” to determine the amount a spouse will require in support to meet their reasonable needs after a divorce. That number is often in great dispute, and each side will have experts (often CPAs) who testify regarding these matters. Financial advisors are particularly well equipped to play this role.
The role of an expert witness cannot be overstated, as their testimony is highly influential with a judge -- particularly if the witness carries recognized credentials. The educational requirements, necessary experience, rigorous examinations, and continuous professional training financial certifications demand provide an impressive background and will likely hold up under the highest level of scrutiny during cross-examination. Whether you hold a PFS, CFP, CFA, ChFA or any of the other numerous accreditations, your opinion will carry considerable weight.
These three different roles are common and important to the divorce process, and all three of which financial advisors are especially suited to serve for the vast majority of financial matters in divorce.
Furthermore, financial advisors do not need to feel forced into engaging in all of these roles. Some may find they have a predisposition against taking the stand in litigation — it is very common to feel uncomfortable sitting in the witness stand while an opposing attorney does their best to discredit you and your opinion. Understand that the role you will play is entirely up to you.
Because it is entirely up to the attorney to advise their clients when a financial expert should be brought in on their case, it is important for the advisors to make themselves memorable in the minds of the attorneys.
This can be done many ways, such as taking them out to lunch or making an appointment to introduce yourself, but the main thing to remember is you must be more assertive in getting yourself in front of divorce lawyers, in the back of their mind, and on the tip of their tongue for when they decide to bring in the professionals.
Many attorneys default to their standard experts, say a CPA and an appraiser, out of habit or past partnerships. Yet, in many of these cases, a financial advisor would be much better suited to handle the matters at hand. This is often because many divorce lawyers simply don’t know as many financial advisors, or the fact that many attorneys don’t actually know the scope of services a financial advisor can offer.
Additionally, attorneys often tend to feel they have the knowledge and experience to take care of many complex financial matters on their own, even though most do not hold any sort of business degree. This can create costly mistakes for their clients if they do not fully understand the complicated financial concerns at hand.
Financial advisors should more assertively approach divorce lawyers to elucidate exactly what they bring to the table.
A stronger relationship between financial advisors and divorce lawyers would benefit everyone involved: Clients would receive more accurate and creative solutions to contentious fiscal issues, attorneys would not have to operate outside of their comfort zone, and the advisors would discover a virtually untapped market of potential clients.
It is up to the advisors, however, to make this mutually beneficial partnership a reality.
Joseph E. Cordell is the principal partner of Cordell & Cordell, a domestic litigation firm focused on representing men in divorce. Since co-founding the firm with his wife, Yvonne, in 1990, Cordell and his team of almost 200 attorneys spread across 93 offices in 28 states have helped tens of thousands of men going through divorce.