In 2011, the U.S. Census Bureau reported that more than 12 million women were widowed, with their ranks growing at the rate of another one million per year.

In 2015, Kathleen Rehl, PhD, CFP®, CeFT® was fully aware of those statistics. A widow herself, Rehl (a noted researcher, author, speaker, overall authority on widows and their financial issues, and member of the Sudden Money Institute and Financial Transitionist Institute faculty) was also aware that many women live on their own for years – decades even – after the death of a spouse.

As a Financial Transitionist®, Rehl knew that the monetary decisions women make, like the many other choices they face when adapting to the loss of their partner, have an overriding human component. So she was particularly and even painfully aware of the dearth of empirical and practical research about widows’ perceptions and expectations related to financial planning.

The role of financial confidence
Rehl, author of “Moving Forward on Your Own: A Financial Guidebook for Widows,” noted one substantive study from 2010 revealing that widows, as a group, often feel less capable financially, which can sabotage decision-making. It only made sense, Rehl thought, to collaborate with other researchers to assess and evaluate widows’ confidence as a starting point for analyzing their specific needs and addressing behavioral issues or struggles that can impact meeting their financial goals.

Rehl (along with Carolyn Moor, Linda Leitz, and John Grable) launched a study (including an online survey) focusing on evaluating widows’ feelings of financial confidence. Among the 1100 widows who responded to the survey (sent to 2400), 55% were aged 55 or younger, and only 27% had been widowed for more than four years. Their responses uncovered these common threads, regardless of their age or years widowed:

  • Among respondents, 50% reported feeling less financially confident than before their spouse’s death; 90% indicated they believed most widows want to feel more confident.
  • Only 23% of respondents reported having solely managed family finances prior to a spouse’s death, and 21% indicated that their now-deceased partner had been the one who solely managed finances.
  • The majority of respondents (61%) reported that the advice of financial professionals had the greatest impact on their decision-making.
  • Women who noted that their financial decisions were influenced by a financial professional reported significantly higher confidence levels than the other respondents.
  • “Receiving help from a trusted financial advisor” was the most popular response to the question of what the widows would find most effective in increasing their confidence about personal finance matters. (Approximately half noted that they didn’t know where to start to find that trusted advisor.)

Why Rehl’s study matters

Rehl’s survey results confirm that widowhood is a transition during which women want and need to feel more confident about, and to understand more about, their financial situations. Most respondents indicated that having a trusted financial advisor (one who is not only competent, but also unbiased, honest and kind) can play a paramount role in achieving both goals.

Yet, when you consider that 70% of widows fire their financial advisors after a spouse’s death, there’s no question that many widows have trouble finding advisors who inspire the kind of confidence they require to work through their transitions successfully. (For the nearly one-fourth of women with zero experience managing finances, this must be particularly distressing.)

Why and How Financial Transitionists® help instill/restore confidence

Widows clearly have unique needs, needs often rooted in and reflected by a comment one widow made on Rehl’s survey:

“I’ve been a widow for five years now and the first four were a blur and I can’t say I made rational decisions. Now I’m trying to recover from all that I’ve lost through poor decision- making.”

Going from someone’s wife to someone’s widow is a transition that entails far more than finances. Financial Transitionists® know that – especially when she has no one skilled at helping her develop or regain it – a widow’s lack of confidence can exacerbate the common Transition Struggles such as the “blur” or confusion that precluded this widow’s ability to make good decisions.

Fortunately, there are tools and processes to help widows achieve or regain the confidence they need to work through their transitions. Providing them with a snapshot of where they stand financially (not just in their minds) can play a key role in building confidence (and clarity) by assuring them that their short-term cash flow is secure. Exercises that prompt them to reflect on their history of resilience can positively affect confidence as well.

Using communication tools and organizing information in ways that match their individual way of understanding information, especially at such an overwhelming time, can be crucial to confidence. Helping clients sort through what needs immediate attention and what can and should wait improves the chances that the decisions they do make now will be good ones, and each good decision promotes confidence that perhaps those further down the list can be too.

Technical expertise is vital to being a good financial advisor, but widows need more than that. Numbers can only do so much to inspire the emotional and human feeling of confidence so vital to working through a major transition like widowhood. Widows deserve advisors who know how to take the time to understand what they are feeling and thinking, and who have the tools to help them navigate their internal landscape.

(perhaps add a personal sentence or two about your practice or meeting with the COIs to discuss further)

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Your Guide to Financial Independence

Rick Epple, CFP(r), CeFT (r)