How can advisors help clients in a new relationship?

A new romantic relationship isn’t something your client is likely to talk about, unless you ask. Do so — you can provide helpful guidance and win a new client in the process.

We talked with three Canadian financial advisors about how they help clients who’ve fallen in love. They shared nine key questions to guide your advice.

1. Are they financially compatible?

Romantic compatibility doesn’t necessarily extend to financial matters.

Some people are savers while others are spenders, said Julie Seberras, head of wealth planning and practice management at Manulife Wealth.

“It’s very hard to look at somebody with love in your eyes and say: ‘I can’t stand that you buy too many pairs of shoes, or that you spent money on this giant motorcycle,’” Catherine Metzger-Silver, an Edward Jones advisor in Kentville, N.S., said.

2. Can they talk about money?

Conversation makes a huge difference. Facilitate the dialogue to make sure the couple is aligned.

Couples should discuss big purchases, ideally beforehand. “If you can’t talk about money and finances, which is very uncomfortable,” she said, “should you be with this person?”

3. Is it OK to keep finances separate?

It is. But transparency is crucial.

There’s nothing wrong with separate accounts, Metzger-Silver said. Expenses can be shared. But it doesn’t have to be all of them.

Couples could agree to save a percentage of their income in a joint household account and emergency fund. They can plan for retirement together as they grow older.

4. What if your client cheats?

Money infidelity is a real thing, Seberras said.

Secret savings or secret debt can do real harm, she added.

It’s OK not to disclose an account balance to a partner. But they should at least know that the account exists.

5. What about debt incurred before the relationship?

Pre-relationship debt should be kept separate, Seberras said.

A partner can help pay off some of it. But they should not attach their name to it.

Again, transparency is important. “You want to talk about what debt you’re bringing into the relationship, how you want to tackle it as a couple, what your values are around debt and ideally come up with a plan on how you’re going to pay it down,” Seberras added.

And be objective when talking about the benefits of paying off debt versus saving for retirement.

6. What if they move in together?

Encourage the client to find a lawyer, said Michael O’Brien, an advisor with Sun Life in Mount Pearl, N.L. Have them write up a cohabitation agreement.

That can be changed to a pre-nuptial agreement should they become engaged.

“I’m very excited for them, but I also have that little rain cloud over my head to say, ‘What can go wrong here?’” Metzger-Silver said. “Things are wonderful and lovely now. Just make sure you’re on the same page with how things are going to roll out if some day you’re not.”

7. Should they share workplace benefits?

Review group benefits with your client, Seberras said. Claiming medical and dental benefits from a spouse’s plan saves money.

And if a person has a defined benefit pension plan, suggest that they consider adding their partner as a beneficiary. Survivor benefits may be available.

8. Do I need a client relationship with both partners?

It’s best if you do. O’Brien believes that both partners should attend client meetings, for example.

Remember, women’s wealth is on the rise.

One person can take the lead in handling finances, but both should know what the financial plan is in case one person is incapacitated.

“You’re only as good as your worst player,” he said.

9. What’s the biggest mistake new couples make?

One of Metzger-Silver’s clients travelled to New York City to pick out a $30,000 wedding dress from a shop that appeared on the TV show “Say Yes to the Dress.”

If they have to spend big, document it as a financial goal.

But illustrate the impact it could have on other priorities, like saving for a home or paying off student debt, Metzger-Silver added.

Recommend they use a line of credit or funds from a TFSA to pay for wedding costs, O’Brien said. They can repay the money with cash gifts from the wedding reception.

It’s also smart to build in a budget buffer.

“I highly recommend not going into debt to pay for a wedding,” Seberras said. “That is no fun.”

Down the road, if things go poorly, you can add just as much value.