The financial advisor on whether women invest differently than men, how couples can find financial peace, and why widows often switch financial advisors.
Our guest on the podcast today is Stacy Francis. She is president and chief executive officer of Francis Financial, a fee-only financial advisory firm that focuses on serving women, especially those who have experienced divorce or the loss of a loved one. Francis is a certified financial planner, and she’s also a certified divorce financial analyst, a divorce financial strategist, and a certified estate and trust specialist. She also founded Savvy Ladies, a nonprofit organization that aims to educate and empower women to take control of their finances. To date, Savvy Ladies has helped over 20,000 women through free one-on-one financial counseling, workshops, and retreats. Francis also hosts her own podcast; it’s called Financially Ever After. She earned her bachelor’s degree at Middlebury College.
Background
Financially Ever After podcast
Woman and Money
“How Do Women Really Invest?” by Christine Benz, Morningstar.com, March 2, 2021.
“100 Must-Know Statistics About Women and Retirement,” by Christine Benz, Morningstar.com, March 3, 2021.
“The Biggest Financial Mistake Women Make? Not Investing Enough,” by Arielle O’Shea, The Florida Times-Union, Feb. 15, 2019.
“Are Women Better Investors?” by Farnoosh Torabi, farnoosh.tv.com.
“Happy Women’s History Month—How Can Women Improve Their Financial Wellness,” by Natalie Colley, Francis Financial, March 8, 2022.
“Stop Letting Your Man Make These Financial Decisions Without You,” by Dayana Yochim, HerMoney, Oct. 1, 2020.
Divorce and Couples
“Financial Abuse—The Most Common Type of Abuse That Far Too Many Ignore,” by Stacy Francis, Francis Financial, Sept. 16, 2020.
“Financial Abuse Is on the Rise: What It Is and What to Do About It,” by Stacy Francis, Savvy Ladies, Feb. 19, 2023.
“Why Financial Advice Is Key Before Beginning Your Divorce,” by Stacy Francis, Francis Financial, Aug. 6, 2020.
“Farnoosh Torabi: ‘Money Is Meaningless Without Goals,’” The Long View podcast, Morningstar.com, Sept. 13, 2022.
“Why Anyone Getting Married Should Consider a Prenuptial Agreement,” by Julia Rodgers, Savvy Ladies.
Divorce Financial Advice for Women: A Free Divorce Resource Guide, Francis Financial.
Widows
“What Do Widows Need to Know About Their Finances When Their Partner Dies,” by Stacy Francis, Francis Financial, Nov. 22, 2021.
“Managing Your Finances Through Widow’s Fog,” by Stacy Francis, Francis Financial, June 17, 2022.
Financial Help for Widows, Francis Financial.
Jeff Ptak: Hi, and welcome to The Long View. I’m Jeff Ptak, chief ratings officer for Morningstar Research Services.
Christine Benz: And I’m Christine Benz, director of personal finance and retirement planning for Morningstar.
Ptak: Our guest on the podcast today is Stacy Francis. Stacy is president and chief executive officer of Francis Financial, a fee-only financial advisory firm that focuses on serving women, especially those who have experienced divorce or the loss of a loved one. Stacy is a certified financial planner, and she’s also a certified divorce financial analyst, a divorce financial strategist, and a certified estate and trust specialist. Stacy also founded Savvy Ladies, a nonprofit organization that aims to educate and empower women to take control of their finances. To date, Savvy Ladies has helped over 20,000 women through free one-on-one financial counseling, workshops, and retreats. Stacy also hosts her own podcast. It’s called Financially Ever After. She earned her bachelor’s degree at Middlebury College.
Stacy, welcome to The Long View.
Stacy Francis: Thank you. I’m excited to be here.
Ptak: We’re really excited to have you. Thanks again for doing this. We wanted to talk about Francis Financial. You started Francis Financial in 2003. Did your firm always have women as its focus? Or has it evolved that way?
Francis: Jeff, great question. Yes, we have always focused on working with women. I will tell you though that communication has really been stronger and stronger. In some ways, I was almost sheepish about being forthright of this is our population and these are the people we want to work with. But I’ve realized that the clearer that we are about where our superpowers lie and the work that we do, the more that we connect with individuals and the more our people, I would say, our people find us.
Benz: You’ve talked about how your grandmother’s story and specifically, how her lack of knowledge of financial matters led her to stay in an abusive marriage. I think that’s a common story in abusive relationships—that there’s a financial element—and how that inspired your life’s work. Can you expand on that?
Francis: Yeah, it definitely shaped me who I am, and it also shaped me and pushed me into this field. I never expected myself to go into the financial advisory field. In fact, when I went into college, my major was French, and my minor was Spanish. So, there was no numbers involved in that at all. In fact, I’ll be honest, I shunned numbers and numbers scared me. I grew up seeing the abuse, the bruises. I knew what was going on, and we were very concerned about my grandmother. And she never felt like she could leave, and she shared with me before she passed away why, and it was because she felt financially trapped. And Christine, that’s where it really hit home for me, that financial knowledge, financial independence, financial security is so important, and it can keep people trapped in unhealthy, even dangerous situations. And she did, unfortunately, end up passing away because of the abuse. And it changed all of us.
And my way of coping with that loss and coping with the feeling of not being able to save her was to create a charity for women so that all women can go to learn about financial advice and get financial support, and that’s called Savvy Ladies. It’s a 501(c)(3) that I created in her memory. And then, I launched Francis Financial the year after, so this was about 20 years ago, to essentially make money to pay for the charity. And I’m just very committed to supporting women so that they have the financial knowledge they need to make good money decisions to live their best life and have the financial security that we all deserve.
Ptak: That’s a very inspiring story, and I’m sorry that its origins were in unfortunate circumstances. We’re going to talk some more about Savvy Ladies a little bit later in the conversation. Before we did that, I did want to delve back into your firm and ask you if you could paint a picture of about what percentage of your clients are women today?
Francis: We have about 70% of our clients of Francis Financial that are women. Almost all of them are on their own because of going through a divorce or unfortunately, their spouse has passed away. We also do work with couples. But what’s really special and cool about that, Jeff, is that all of those couples, each partner is engaged, and they’re engaged in the financial planning process, they’re engaged wanting to understand money, understand their investments. And often, it’s interesting, usually the female partner reaches out to us inquiring about our services. And then, we have about 3% single men who we absolutely adore. And it’s funny—we always joke that our numbers of single men we keep on dwindling because they end up getting married to really phenomenal people. So, there we go. But, yeah, we work with a really special, really special group of clients.
Benz: You’re in a wonderful position to observe how women interact with money. There’s been a lot of research into the topic of how women’s attitudes about and behavior with money differ from men’s, including the research that we’ve all heard about how women tend to be more conservative in terms of their investment choices. What have you observed in your years of working closely with women on their financial affairs?
Francis: What you mentioned, Christine, is you really hit it on the head. We as women, we do tend to be more conservative with our investments. But sometimes, it’s not for the reasons many people think. It’s not necessarily because we are shunning risk. It’s typically because as women, we often have less experience in the investing arena. And understandably so, if you have less experience, your comfort level is lower. And so, for many women, investing, it’s their first time really dipping their toes into the stock and bond market.
And I think back to when I learned to drive a car, gosh, I remember when I was going for my test and how nerve-racking it was just to be able to change a lane and remember, OK, this is what you do with the turn signal, and I have to look this way and look at this mirror and then move across. And I remember how stressful that was. Now, I jump in the car and it’s natural. It’s not even something I think about. I can change lanes very easily and very safely. Well, it’s the same thing with investing. If it’s really your first time dipping into the waters of investing, it can feel pretty unnatural and can possibly even feel overwhelming. But I do have to say that the women we work with, over time, they become more confident, they become more knowledgeable, and I also do see is their risk tolerance increases. And the more you understand about the risk or lack of risk in an investment portfolio, the more willing you are to actually take on risk. So, I have a really wonderful opportunity to see individuals where it’s the first time they’ve ever really been investing on their own and watch that beautiful journey of knowledge and empowerment. And with that, we do see that women eventually are willing to take on risk and many times just as much risk as their male counterparts.
Ptak: I think you pointed out that one issue that can get women into trouble is they tend to overprepare, they think they need to find all the answers before making any financial decisions. Why can that be such a problem and how can women get around it?
Francis: I feel like we as women, we like to have our ducks in a row, and I’m right there with you. I’m planning college visits for my son right now. And Jeff, I have spreadsheets and I have everything you can imagine. I am so prepared. And sometimes, our feeling of wanting to have all the information, know all the information, be prepared, we could get in our own way. And how I see that really materializing is that often I’ll talk to women who their spouse has passed away or they have gone through a divorce, and it’s been one, two, three, four, five—even a lovely woman we started working with seven years. And all of the money is either has been left exactly the way it was invested seven years ago without any tweaks. Or I’ve also seen all of that money just sitting in cash.
So, sometimes feeling like we know all the information and that we know exactly what our life is going to look like and so, therefore, how we can invest, sometimes that can hold us back. And so, what I encourage people to do is to take a piece and invest it and make sure that the portion you keep in cash is an unbelievably well-cushioned emergency fund of anywhere from three- to six-months’ living expenses; if you’re really uncomfortable, maybe even a year’s living expenses, and just knowing you have that to fall back on allows you more of a peace of mind to invest the other piece to get it working for you.
Benz: I want to ask about your clients who have been married because I know that divorce is a big focus of your practice. Do you find that women still often delegate financial decision-making to their partners, or are younger women doing a better job of being plugged into, or perhaps even leading the way, in the couples’ financial affairs?
Francis: It’s a great question, Christine. I see, and studies have actually shown this, that even our younger generation tends to delegate financial decisions to their spouse. So, this is Gen X, Gen Z and, of course, the typical that we would think the baby boomer generation and the older generations.
That being said, we as women, we tend to be more involved with the day-to-day bill-paying, budgeting and that piece, but not as much in the investment piece, financial planning piece, working with the accountant. And often, it’s not a conscious decision of “I don’t want to be involved in the finances, so I’m just going to let my spouse take care of it.” It’s usually just a divide and conquer. I have two kids and I will tell you that we do the same thing. I manage all the investments; I manage all the tax planning; and I manage all the financial planning; and my husband pays all the bills. Now, because I see what happens when you go through a divorce or God forbid, if I passed away, he would actually be in a really difficult position unless he was fully integrated into understanding the finances. And so, for our marriage, which works for us and works for our clients, is that we do a financial date night once a month, where we go over everything. We go over the budget, we go over our investments, we go over how much should we be putting into the 529 plans from your bonus, what portion should we be putting into our retirement accounts and bringing them up to speed. But the problem is, is that the vast majority of couples, it’s that divide-and-conquer mindset, which I understand, but it means that one person is in the financial dark, and it becomes a problem when they now have to make the financial decisions on their own. And for women, eight out of 10 women at some point in their life are going to be 100% solely responsible for making financial decisions on their own. And most of those women, unfortunately, are just wholly unprepared for that because they haven’t been ingrained in the minutiae and the information about where the money is, how it’s invested and how to make smart financial decisions about it.
Ptak: I think that’s another topic we’re looking forward to exploring with you a little bit later in the conversation. Before we got there though, since you were talking a bit about your family, as you mentioned you’re married and a mom, do you find yourself sharing experiences from your own life when talking to your clients about juggling family responsibilities and their careers? And what are some of the key ones that seem to resonate with your clients?
Francis: I will tell you, Jeff, my children have no clue how much I talk about them. They would probably kill me. They’d probably kill me. And bless my husband—he just realizes he has no privacy anymore. But to be honest, he kind of knew who he was getting married to. I was very upfront. We met 20-some years ago. So, he knows who he married. And I’m a handful. I think I’m a good handful, but there we go.
I use examples all the time. And I’ve shared this. My husband and I, we really struggled when we first got married. We got married 20 years ago. And the thing that made me happiest was to be able to save. And I felt more and more confident and safe, the more I saved. And it’s understandable from my background, because for me, money means security and it means that I have the option to get myself in a safe place because I saw what happened to my grandmother. Now, of course, my husband and I have an absolutely beautiful marriage, and knock on wood, we’ve never been happier and we’ve been together for decades. But having money for me in my name gives me that feeling of safety.
For Michael, when I met him, his idea of savings was a sports car. He had a really nice sports car and an empty 401(k), even though he made four times the amount of money. And so, I use that as an example because we were two very different people. We really struggled. We had to go into couples therapy to deal with how do we come together? How do we find a way to operate as a couple that makes me feel safe but lets him enjoy money, too? And so, I’ve used a lot of examples about struggles that we’ve had, examples about how we’ve taught our children about money and what’s really worked well with teaching them that responsibility.
I’ve also shared mistakes. We’ve struggled financially. We bought a beautiful home and then the next year, 2008 happened and my husband’s salary got cut in half. And I was still running the charity and Francis Financial, making not even enough to pay for the cost of our nanny and some really financially difficult times, and the lessons that we learned from that too. And I find that the more honest I can be, even if it’s mistakes I’ve made, the more that our clients can take a breath and know—no one has this 100% figured out. This is a place that’s not going to judge me. They’re going to be real and they’re going to support me in every way possible, not only support my relationship with my spouse or my kids but also support the entire family to be financially smart and financially savvy. So, there are lots of stories and all you have to do is listen to my podcast. I have a podcast called Financially Ever After. And trust me, there are lots of stories there; lots of stories—good ones, some funny ones too, very funny.
Benz: Stacy, you referenced that earlier in your relationship you and your husband had different money patterns where he was more spendy and you were more security oriented. Do you find that that’s a common thing with couples, a common rift? And also, do you have any advice about how to heal that if one partner is more comfortable spending and the other one is more parsimonious, shall we say?
Francis: Christine, that’s such an insightful question. I do see very big differences in marriages. We typically end up picking a partner who isn’t exactly who we are, and that’s something that is very healthy. Both partners come to that relationship with many times vastly different money histories. And our money history, the way we were raised with money or raised without money, the messages we learned or didn’t learn, it shapes us to be who we are. The majority of couples we end up working with going through a divorce that will reach out to us when they start that process or often one of the parties, usually she’ll reach out to us to help her with divorce financial planning. As we learn more about their relationship, for most of them, money was a source of conflict and a source of disagreement. And it can shatter a relationship unless you’re on the same page about money.
And so, having a place to heal—and I love the word that you share—because I do feel like each of us have potentially something to heal from money. And for me, my healing is watching my grandmother feel like she was financially trapped and then end up losing her life. There’s a lot of healing there. And for us, not every couple needs this, but we really needed to have a therapist help us. And what’s really awesome, Christine and Jeff, which I feel like didn’t exist 20 years ago when we were going through therapy, there now are money coaches, there are money therapists, and there are specific designations that are not easy to get for specialists to work with individuals and couples specifically on money disagreements and how money either is serving you or unfortunately isn’t serving you in your life.
So, we did a lot of work. And knock on wood, we have figured out what needs to happen to make me feel safe. So, every year, we have a recipe that we follow of this is the dollar amount that we need to save. And we hit it. And guess what? Where the other money goes? Doesn’t matter. It can go on a 3D printer that I’m looking at right now that my husband just bought that is 3x2 foot. It is the biggest 3D printer I think I’ve ever seen in my life, and I celebrated buying it with him. Because you know what? We’re on track. We’re going to hit our savings goals. So, again, having communication and, when needed, outside support, I think that that’s a really important key.
Benz: I want to follow up on that method of arriving at financial wellness. I think it’s sometimes called reverse budgeting where you’re not doing that line-item-by-line-item scrutiny of your spending. You’re just saying let’s set our savings target, hit it, and then not worry about what we’re doing on the spending front. Do you recommend that for your clients? Or are there clients where you say, no, actually we do need to go do some checking on where the funds are going, we do need to do that line-item-by-line-item scrutiny?
Francis: Great question. We recommend doing both. Once a year we recommend going through your budget and looking at things line item by line item to really see where the money is going. The time of the year where it makes the best sense to do that is in January. And the reason we choose January because January is the month where you get all of your year-end credit card summaries. They get sent to you either in paper form or electronically. What’s wonderful about these summaries is that they categorize all of your spending into neat little sections. And so, you can go on and very clearly see entertainment, clothing. Not everything is categorized perfectly, but usually, it’s pretty close. So, it’s a great way to take three or four hours just to see where is our money going?
But on a month-to-month basis, we typically encourage people to reverse engineer and not look at the spending on a line item by line item, but just making sure that you’re reaching your savings goals. And a couple in particular, it can be very difficult if you’re looking line item by line item every single month, because sometimes then judgment comes into place. And I’m recalling an argument that I had with my husband where we each love to go to Starbucks. That was kind of our thing. Every time I was going to Starbucks, I was buying the really crappy, tall, behind-the-counter, whatever coffee they had on drip. He was going to Starbucks, and I’d see these gigantic bills—he was getting the venti cappuccino with the blah, blah blah, blah, like roughly 3 to 4 times the cost. And I remember, and we actually brought it to the therapist, like this drag out about Starbucks. And she said, do you know that what you just paid me to argue about this is like 4 times what he actually spent, which, needless to say, I needed to take a chill pill. So, the line-item scrutiny, I would say, be careful of on a month to month. But you should do it once a year, because if you’re not reaching those monthly savings goals, if you’re not hitting that yearly savings goals, it means that there’s something wrong. It means that there’s a leak in your budget and you need to be Sherlock Holmes to figure out, OK, where is extra money going that we really shouldn’t be spending that we can’t afford? And then figuring out, how do we pull this back in a way that we both still feel good about what we can spend money on?
Ptak: You’re a specialist in divorce financial planning. You’re a certified divorce financial analyst, and you’re also a divorce financial strategist. One question someone going through divorce might have is whether having a divorce attorney is sufficient to sort out financial matters? How would you respond to that question?
Francis: I don’t think everyone needs a certified divorce financial analyst. That being said, if there are significant assets and different types of assets, it becomes imperative. You can have a divorce settlement where one spouse is walking away with $1 million, and the other spouse is also walking away with $1 million. But after tax considerations, that first spouse, that $1 million, after paying Uncle Sam could be walking away with only $650,000, especially if you’re having different types of retirement: a Roth IRA versus a traditional IRA versus a traditional 401(k) versus a Roth 401(k), if there’s restricted stock units, if there’s incentive stock options, nonqualified stock options, if there are hedge funds, or private equity, or commercial real estate that’s throwing off income. That all of a sudden you are having a pretty complex asset situation where having the expertise of a certified divorce financial analyst to help you analyze the settlement that will behoove you from a tax perspective and a risk and growth perspective is really helpful. And for most individuals I find that their fees are actually less because often a matrimonial attorney will try to do some of this work, and it’s not their superpower. And most certified divorce financial analysts, their hourly rate—I know ours is like half; in fact, in some cases, a third of what matrimonial attorneys in our area charge per hour. So, again, if it’s a complex situation, or I guess if you feel unsure about your financial knowledge, reaching out to a CDFA a just to even see if it makes sense can be a good thing.
Benz: Is there sometimes an element of sleuthing that comes into play where it’s not really clear, perhaps to the partner you’re working with what the assets are, and does your firm get involved in that front, just trying to sort out what are the assets in play here?
Francis: Yes, I would say, about half of the women who come to us do not have full transparency and view into the assets of the marriage. Sometimes it’s because they just weren’t involved. But we also work on a lot of cases where there has been financial abuse. And financial abuse is where that partner has been on purpose not allowed access to the assets, not allowed information about the assets of the marriage. So, yes, there is some sleuthing. We are not forensic accountants. But I will tell you that we can do wonders with tax returns.
And I have a client who just hired us. Same situation. A long-term marriage and she had no idea about any of the assets that were in his name, only those in her name. And through the tax return, we were able to find five different accounts—taxable accounts, one retirement account. And with the taxable accounts, because the interest and dividends were listed on the tax return, we were able to reverse engineer into what the values of those accounts would be. And we were very conservative. The total number we came up with across those five different accounts was a total of $17 million. And so, all of a sudden, it became very clear why her husband, who inherited a lot of this, why he’s never really had a job throughout their whole marriage and how they’ve been able to have a home in Italy, a home in Paris, and a home here in New York.
Ptak: We interviewed Farnoosh Torabi on this podcast last year, and she made the point that custody arrangements often disadvantaged divorced moms. Her comment was that the mom gets the kids, and the dad gets time to dedicate to his career. Is that a fair assertion in your opinion?
Francis: So, first off, Farnoosh is a rock star, and I just so respect her. Custody, it can disadvantage the mom if she, as primary custodian, is not able to have access to funds to pay for support around the house and babysitting so that she can have her own career. We do see this. I also see a really unethical game played by certain parties of the divorce where they’re arguing to have more time so that they are not responsible for paying a big number in the form of child support, when in reality, once the divorce is final and all of a sudden that 50-50 custody split, all of a sudden that person is saying, sorry, I have a business trip; sorry I can’t make it this weekend. And in reality, the time split is closer to a 75-25, but the person who ends up taking that 75% with the children is not getting enough child support.
So, we do see money games being played at the expense of the welfare of children. And it’s wrong. It’s wrong. For a lot of women, vast majority of women, it takes them much longer to financially recover from a divorce, and for many of them, they never fully financially recover. And one of the biggest pieces they can put in place to help them speed that recovery and get them on the right financial path is going back into the career force, into the workforce. But it can be very difficult when you’ve got kids at home. And again, if you’re not getting enough child support to be able to get good care for them, yeah, you find yourself in a really, really unfair and tough position.
Benz: I want to stick with the topic of caregiving because it seems like one of the key reasons that women earn less than men over their lifetimes is caregiving responsibilities. So, sticking with parenting, you’ve written that women are often a bit short-term-oriented when they’re thinking about the financial ramifications of dialing back on work to care for children. Can you discuss that?
Francis: I myself always knew that I was going to work, and I never thought I had an option. But for me, it was more of a, this is something I need to do for me to feel safe and secure. Not everybody feels that way, and some people, they really want to, and their partnership can afford to be at home. There’s nothing wrong with being a stay-at-home parent. But you need to make sure that you are protected. And when I say that, when you get married that you speak to an attorney about a prenup. If you expect that there’s even a small chance that you’re going to give up your career to be a stay-at-home parent, that prenup is imperative to protect you if there is a divorce and you find yourself all of a sudden having to go back to work instead of earning $100,000 like you used to, you’re starting off at $40,000. So, prenups are a really important thing to talk about, especially for that stay-at-home parent.
At the same time, if you are going to be a stay-at-home parent, it’s really important to make sure that you’re investing in the most lucrative important asset you have, which actually is your career. And there are many things that you can do to keep your toe in the workforce, keep your toe in the networking pool. And one of the things you can do is get really involved with your PTA. If you have any financial background, you can go in and be their treasurer. Having things to put on your resume, making sure that you are continuing to get out there and stay involved with previous colleagues, take courses, increase your skill set is important. Because I will tell you, the women that we’ve worked with that have needed to go back to work, I’ve seen two outcomes. I’ve seen the woman who was able to keep her toe in, keep herself learning and skills continuing to be refined, being able to get jobs and maybe they’re low-paying at first, but she skyrockets through the ranks and her earnings doubles, triples, quadruples. Other women who have completely stepped out, even having them work with career counselors and resume and job search specialists, I’ve seen them struggle. I’ve seen them struggle because they don’t have computer skills in some situations, they have not kept up any type of education, and they’re really starting from scratch. And they’ve struggled to get that first job and their trajectory in their career is also much slower growing.
Ptak: I think you’ve also written and talked a lot about how women need to do a better job of negotiating for salary and benefits. Can you share some tips on that front?
Francis: I’ll use tips for myself that I use. I remember the first time that I went in and asked for a raise. Before I started Francis Financial 20 years ago, I had a career. And I remember that what I did, is I did three things. I received a bonus and the bonus that I received was nowhere near what I had expected, and I had worked my brains out for this company, sometimes even getting in at 5 a.m. at the office. And I did three things. First off, I didn’t prepare as if I was advocating for myself. I thought of my best friend. Think of a family member, someone who you really love. And I wrote down all the things that she did of why she deserved a higher bonus. I then did research for her about how are other people being paid in this industry, and it’s much easier to get that information from places like Glassdoor and a few others than it has been in the past. And I went in and asked for a meeting, got that meeting set up, and I made my case. And it was all written down. It was very clear, both statistics about what other people are being paid, statistics about what I had brought to that company and how I’d gone above and beyond and why I deserved more.
And again, I didn’t couch it as I was advocating for myself. In my mind, I kept on thinking about I’m advocating for my best friend, this other person, and it allowed me to not have my emotions get involved of do I deserve this, am I asking for too much? And what was fantastic, Jeff? Literally, within five minutes of that meeting, the number I asked for, they said, no problem, HR will send it to you. And I realized, I just made this in just such a big deal. Oh my gosh, they were totally fine with it. And I would never have gotten that unless I asked. So, again, when you’re thinking about negotiating, don’t think about it for yourself. That’s where we have all those self-doubt things that go into our minds. Think about you’re advocating for the person you most love and then preparing with your facts, with your statistics and being ready to advocate for yourself.
Benz: Stacy, I wanted to ask about your work with widows. In addition to working with people who are divorcing or divorced, you work with clients whose partners have passed away. We’ve often heard that women frequently switch financial advisors at that point in their lives. Have you experienced that in your practice where the widowed client had a financial advice relationship previously with someone, but they weren’t satisfied with it?
Francis: Yeah, it’s really shocking, Christine. Eighty percent of women leave their financial advisor within one year of their partner’s death. So, yes, you definitely do see that very much. I see it every day.
Ptak: Every situation is different. But what are some of the key pieces of advice you find yourself imparting to new widows?
Francis: The first piece is really looking and getting a full understanding of what their new financial situation looks like. For a lot of the women, they may not have been tuned into where all the different accounts are and what the balances are. So, our first step is to actually put together their new net worth statement, including information about bank accounts, checking accounts, IRAs, 401(k)s, pensions, if there was life insurance, the life insurance proceeds as well as real estate. And then any liabilities—if there’s any mortgages, home equity line of credits, auto loans so that we can see on a piece of paper what that looks like.
And the second piece is really looking at and understanding what their new income is going to be. For the vast majority of women, their income goes down significantly after their spouse passes away. It could be that their Social Security benefit stops. It could be if they’re working that their employment income stops. So, understanding if they’re able to collect a widow’s benefit, if they’re able to collect a survivor’s benefit, if their children are eligible for a benefit as well. These are all things that are very important with Social Security. And pensions, if there’s a pension income, of just understanding what is my new income so that I can start to plan my life to understand what is the spending that is going to be appropriate now that again my income situation has changed. Really important—we have some fantastic worksheets. There’s a book that I wrote on our website www.francisfinancial.com. You can go right on there. It’s financial resources for widows, and it goes through and helps you create that list of assets and liabilities, and it also helps you create the new list of what income you’re entitled to, and it tells you all the ins and outs of Social Security and pensions, and also how to get a good handle on what your new spending is going to look like as a single woman.
Benz: I think it’s a good bet that a lot of our listeners of this podcast are the main financial decision-makers in their household. They’re driving the plan and they may be men; they may be women. What steps should those listeners take to ensure that their spouses, who maybe aren’t very plugged into financial matters, are well situated in case something should happen to them?
Francis: One of the best things you can do—I spoke about financial date nights—and I will tell you, not only are they great for making sure that your spouse is well in tune with the finances of your relationship, but also, I will tell you, it is one of the most wonderful things you can do to ensure long-term happiness in your partnership. We definitely see that couples who talk about money are couples that live happily together for the long term.
The second thing is making sure that that partner understands where all the assets are. So, I tell clients, and we do this for them, so they don’t have to worry about it. But even if you don’t have a financial advisor, you can do this. Once a year, fill out a statement of net worth to understand where each account is, which financial institution, what the balance is and then also, how do you get access to this. Years ago, we all used to get paper statements. So, it was pretty easy. They just come to you in the mail. Not so much today. And many of these accounts have usernames and passwords and third-party authentication security, which is all great from a security perspective, but it can be an absolute disaster for someone who is left, who doesn’t have access to these accounts. And so, making sure that they understand where the username is, where the password is. You can use a great password software called LastPass, L-A-S-T, Pass, P-A-S-S. It’s a great resource where you can keep all of this information, and you’ll want to do that for any financial institution, anywhere that there’s an account, your retirement accounts. You’ll also want to make sure that they know where the will is, the healthcare proxy, the power of attorney, your insurance documents, life insurance, disability insurance, all those key important pieces of information and where you can find them. I call this—if you were to write it down—I call it, “I love you letter,” and it’s my belief that one of the most wonderful things you can do to show that someone that you love them is making sure that they have access to all this information right at their fingertips.
Ptak: Helping women improve their financial knowledge is a key goal of the not-for-profit you founded called Savvy Ladies, which you mentioned earlier in the conversation. How does the financial education that you deliver to women differ from what you might provide to men, if at all? Or is it mainly that women are more comfortable learning among other women?
Francis: I have to say, I feel like men and women, we learn about finances in a very similar way, and I will tell you that we have a good number of men who come to Savvy Ladies. I call them Savvy Ladies. I’ve got some Irish in my blood. And also, for that perspective, I don’t think the sexes really differ that much in the way we learn. But I will say that for many women they can be intimidated about learning about finance, investing, financial planning. And Savvy Ladies is a very warm, nonjudgmental, welcoming place to go. And I have to say that having a community of other like-minded women who are at all stages of their empowerment and knowledge around money is really lovely to be in, because you can learn in a safe, comfortable, judgment-free place. And we offer over 200 different courses about every subject you could imagine—retirement savings, debt management, credit scores, budgeting, cash flow. There’s so many great pieces. And then, we also have TED Talk-like videos, hundreds of those on every topic you could imagine, including what we talked about—negotiating your salary, negotiating the coroner office, how to start your own business, think about if you’re going through divorce, if you’re recently widowed. And so, I would say that the difference between men and women is not necessarily how we learn or what we need to learn. It’s just that many of us ladies, we maybe don’t feel quite as comfortable around finance terms and financial pieces, knowledge. So, being in an environment that meets you wherever you are as you come to us can be really helpful.
Benz: You’re a leading female financial advisor. What’s a key piece of advice or maybe two that you would impart to a woman pursuing a career in this profession?
Francis: First off, I will say that I think it’s the best profession in the world for women. It’s a merging of social work and hardcore finance. You can tell from my voice, Christine, I adore this work. There is not a day where I don’t walk away feeling like I’ve made a difference in someone’s life and there’s not a day where I don’t learn something new, either about communication or about backdoor Roth IRAs, or some other really cool financial technique.
It’s also a career that you can mold to having a family. And I will tell you that being a business owner I’ve worked my brains out. There were many years where, especially creating the charity and Francis Financial at the same time, I was the sole employee, and I would work 30 to 40 hours a week pro bono for Savvy Ladies running all the financial planning and investment knowledge circles and workshops and then another 40 to 45 for Francis Financial managing portfolios, financial planning for our clients. But I was able to mold that to when my kids either were sleeping or they were at school. And so, I feel really blessed because I’ve very rarely ever missed an event at school. My children, when they take vacation, there’s vacation from school, I’m off as well.
And most financial advisory firms. Even if you’re an employee, you have that flexibility. And I know for us, we are primarily remote. And so, it allows our staff members to really mold their work life into what works best for their personal life. And I just say to anyone who’s thinking about this career, it’s such a great career and there’s not enough women. Only 23% of CFPs, certified financial planners, are women. And what we hear from the women who come to us, the vast majority, not all, but the vast majority, would prefer to work with a woman. And to be honest, it’s not because we’re better. It’s just because often she feels a little bit more comfortable. So, reach out to the Financial Planning Association. They’ve got great information about this type of career. And if anyone wants to talk about this career, I’m always up for chatting more, too.
Ptak: Well, Stacy, this has been a fascinating and inspiring discussion. Thanks so much for sharing your time and insights with us. We’ve really enjoyed speaking with you.
Francis: Well, thank you. And if anyone wants more information about Savvy Ladies and our free services, you can just go to the Savvy Ladies website. It’s www.savvyladies.org. Again, it’s all free of charge pro bono, and we’re there to support you. And then, of course, Francis Financial. We’ve got some great resources for you, books that I’ve written. As I mentioned, the widows guide. We also have a guide for women going through divorce there to support you as well.
Benz: Thanks so much, Stacy.
Francis: Thank you.
Ptak: Thanks for joining us on The Long View. If you could, please take a minute to subscribe to and rate the podcast on Apple, Spotify, or wherever you get your podcasts.
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Benz: And @Christine_Benz.
Ptak: George Castady is our engineer for the podcast, and Kari Greczek produces the show notes each week.
Finally, we’d love to get your feedback. If you have a comment or a guest idea, please email us at TheLongView@Morningstar.com. Until next time, thanks for joining us.
(Disclaimer: This recording is for informational purposes only and should not be considered investment advice. Opinions expressed are as of the date of recording. Such opinions are subject to change. The views and opinions of guests on this program are not necessarily those of Morningstar, Inc. and its affiliates. While this guest may license or offer products and services of Morningstar and its affiliates, unless otherwise stated, he/she is not affiliated with Morningstar and its affiliates. Morningstar does not guarantee the accuracy, or the completeness of the data presented herein. Jeff Ptak is an employee of Morningstar Research Services LLC. Morningstar Research Services is a subsidiary of Morningstar, Inc. and is registered with the U.S. Securities and Exchange Commission. Morningstar Research Services shall not be responsible for any trading decisions, damages or other losses resulting from or related to the information, data analysis, or opinions, or their use. Past performance is not a guarantee of future results. All investments are subject to investment risk, including possible loss of principal. Individuals should seriously consider if an investment is suitable for them by referencing their own financial position, investment objectives and risk profile before making any investment decision.)