At a recent client meeting, the husband asked, “Why don’t you make all of the decisions in managing our money?” I answered:
“Investment advisors don’t take discretion”
In Israel, there are two different licenses: investment advisor and money manager. As an investment advisor, my job is to talk to people about their needs and educate them about the possibilities. While I help my clients with their financial plans and investment portfolios, I work with them rather than by taking discretion and doing it myself. A money manager, on the other hand, makes all decisions and notifies his clients after he trades.
Should you let your wife decide?
After explaining the difference between an investment advisor and a money manager, I suggested that if the husband doesn’t want to make financial decisions, his wife should take a more active role. Both of them laughed and he said, “She doesn’t know anything about money!”
Handling personal finance does not require a PhD in economics, nor a great deal of mathematical skill. It just requires common sense, which is something his wife had plenty of!
When couples decide how to allocate overseeing their finances, one important thing to keep in mind is life expectancy. Since men frequently predecease their wives, many women are left in a position of financial independence for the very first time. Learning how to handle money while simultaneously dealing with the emotional aspect of losing a spouse can be difficult. Is this the inheritance you wish to leave?
Who should manage the money?
Financial decision-making should be a joint venture with your spouse. It is fine if one partner wants to be more involved in it than the other, but spouses need to work together on asset allocation and budgeting issues.
If you and your spouse need help communicating about money and you have questions about handling your dollar investments, call my office to see if we can help: 02–624–2788. Don’t forget: communication is the cornerstone of good personal financial management.
Douglas Goldstein, CFP®, is the Director of Profile Investment Service, Ltd., which specializes in helping people who live in Israel with their US dollar assets and American investment and retirement accounts. He helps olim meet their financial goals through asset allocation, financial planning, and using money managers.
Published September 7, 2015.