In this video interview with financial advisor Sheila Bailey of Willow Private Finance - in my role as the Alternative Divorce Guide - I asked Sheila: "How do couples keep things amicable during divorce, and how can you as a financial advisor help them with that journey"?
I wanted to find out if directing divorcing couples towards financial advisers at a time when most people would be screaming "send them to a lawyer!" was the right thing to do. I was very interested in what Sheila had to say:
Financial advisors are on the sharp edge of the divorce journey, and they certainly know what are the trigger points for a divorce to become nasty:
"When a relationship breaks down emotions generally run high, there is the possibility that tempers will also run high. There is also so much to think about - the house, the finances, children to name but a few.
As there is so much to discuss and think about arguing and shouting at each other may not help both parties come to a fair or reasonable out come. I personally believe that it is a good idea to have an independent third party that will help you to discuss things and agree on things. A mediator (third party) is there to help you both have your say and to help you talk openly without fear of rebuttal."
It is always refreshing to me when I meet financial advisors who are referring clients to mediators rather than just to a local solicitor. It shows that the financial industry are becoming really in tune to the needs of their clients, and looking out for their overall welfare. Sheila has worked with many people who are dealing with divorce:
"I personally have helped a number of clients deal with their finances thorough divorce and I am always amazed at the creative solutions that they can find. For example I have a divorced couple that still live together although the house is totally in the lady's name now, Mr has the right to remain the property until death or he wishes to move out. This is a great idea if you are amicable with each other - but if you are not, this situation could cause more friction in the long run.
Speaking to a mediator at the beginning of a divorce could help you to have a smooth running divorce and the same can be said for speaking to an Advisor with regards to your finances.
A financial advisor is in a position to offer advice as to whether you are able to remain in the property as a single person, explain how much you can or cannot borrow if you wish to purchase your own home, sometimes they can even help you to come up with out of the box solutions. The best time to talk to someone regarding your finances may be at the beginning of the split. Hopefully through mediation you will be on reasonable terms with each other and can therefore speak to the advisor together to discuss how things can work for you both."
I was keen to ask Sheila about how children figure in these situations. I am often surprised how divorcing people can be quick to become fearful about the 'money' situation, yet slow to get any advice. I think they often believe that it's the job of the lawyers. But many lawyers are not experienced in doing the necessary sums - and they charge for their time, whereas a financial advisor will often be able to offer initial advice for free. Sheila explained to me some of the nitty gritty aspects of divorce she can help with:
"If there are children involved you may need to work out who the children will be living with - do you want to remain fairly close to each other so the children can alternate between both houses? Do you need to have two houses to accommodate everyone? These are all things that an advisor can aim to help you calculate if they are possible.
Splitting up with someone is not a nice thing but it doesn't have to be a completely angry thing either. There are a number of specialists that aim to help this difficult time be a little or lot easier for all concerned."
It seems to me that with some help from financial experts rather than just from lawyers, a divorce is less likely to turn nasty. So my money's on the financial advisors when it comes to getting on track with an amicable divorce.
Alternative Divorce Guide