SURVEY SAYS: Importance of Financial Responsibility in Relationships

NEWSDash readers share how important it is for people in relationships to be financially ‘in sync’ and the way they think is best for couples to avoid financial conflict.

Two recent surveys highlighted how important financial matters are to relationships. Last week, I asked NewsDash readers how important they think it is for a love interest or significant other to be financially responsible and how important it is to be “in sync” financially for people in relationships. I also asked about the best way for couples to avoid financial conflict.

Sixty-two percent of responding readers work in a plan sponsor role, 24% are or work for recordkeepers/TPAs/investment consultants, 10% are advisers/consultants and 3% are CPAs.

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More than eight in 10 respondents (83%) said it is extremely important for a love interest or significant other to be financially responsible, while 14% said it is somewhat important and 3% are neutral. Two-thirds (68%) indicated it is extremely important for people in a relationship to be “in sync” financially, while 29% said it is somewhat important and 4% are neutral.

Asked what the No. 1 thing people in a relationship can do to avoid money problems, 41% selected “collaborate on and discuss major purchases,” and 21% chose “work on each other’s financial obligations together.” Three percent each selected “keep financial accounts separate,” “equally divide financial obligations,” “collaborate on and discuss every dollar spent” and “have a prenuptial agreement, if married.”

Among “other” suggestions for avoiding money problems, a few people said there was not a No. 1 item, either because a combination of things works best or because it depends on the couple. Several people said communicating was the No. 1 thing people in a relationship can do to avoid money problems, with suggestions to stick with the agreed upon approach and ensure a mutual understanding of finances. “Work with each other on major expenditures, and set allowances for other times” and “discuss spending and savings habits and goals before getting married” were other suggestions.

Common themes among readers who provided additional comments in the survey were that couples need to communicate, trust is important, and couples should decide on and understand their overall goals and approach to finances. There were opposing views of whether one person should take the lead on finances, and a couple of readers feel each person in a relationship should have some discretionary money to spend as they wish. Editor’s Choice goes to the reader who said: “If the big picture is in alignment, the smaller differences are more easily managed.”

A big thank you to all who participated in the survey.

Verbatim

One should have a pretty good idea of his/her partner’s financial situation prior to any permanent relationship arrangement. Be willing to support one another during a major financial change (i.e., loss of job) but neither party should expect the other to be the single responsible financial support long term.

No matter how the money is spent, true love will keep a relationship together. Happy Valentine’s Day!!

Find the financial balance that works for your relationship. Love endures – money, not so much.

The most important thing is for one person to be responsible for the family finances with full trust of the partner. The trust is gained when discussions occur about any changes to the budget or any major purchases.

Trust is key.

If individuals have the same philosophy of handling finances (attitudes toward debt, saving vs. spending) they can support each other in reaching goals. When the philosophies don’t mesh – it can be destructive to a relationship – one feeling sabotaged by the other. If the big picture is in alignment, the smaller differences are more easily managed.

Communication is The Key. If talking about finances frightens you, that’s an emotional response that needs to be addressed. You can’t face your fears without talking through them, either with your partner or a financial adviser. That’s also how you discover that things you “know to be true” may not be accurate or correct. Refusing to talk about finances won’t make them magically work out. You need to bring those fears into the light so that all concerned can understand first, and then work towards a better understanding of how to achieve your goals. Have the conversation about fears in a place where all parties feel safe. Once you have talked through the fears, have a separate conversation at a different time and place. Take a direct look at income. expenses, emergency funds and other savings. I think it’s a good idea to use a combination of joint and separate accounts. Use the joint account for household finances that affect everyone (mortgage, utilities, food, etc.) and separate accounts so that each person can spend on things that matter to them without affecting the household finances.

Each person needs to understand their partner’s relationship with money and how the partner’s family dynamics have influenced that relationship over time.

Like everything in a relationship, communication is key.

Money is such a taboo subject, and it shouldn’t be. People need to be made aware early on that it should be discussed openly and understood. This way, when partners get together and money becomes more central, it isn’t taken lightly but there is awareness of the money earned, the money allowed and the saved money.

I think there are a lot of different ways to approach finances, and there is no one right way to do it. Whatever approach you decide on, it should be discussed and agreed on by those in the relationship. And then you have to continue to follow the agreed upon approach. Continued discussion is helpful. I think it’s also helpful for each person in the relationship to have some discretionary money that they can spend as they want.

Both people in the relationship must have similar goals for current and future financial planning. Full transparency and agreement of financial goals and how to get there is a must. Collaborate on a reasonable budget and what things need to be discussed, review your plan to incorporate changes and gain agreement.

NOTE: Responses reflect the opinions of individual readers and not necessarily the stance of Institutional Shareholder Services (ISS) or its affiliates.

Retirement Industry People Moves

J.P. Morgan announces insurance and annuities head; Verity Asset Management names chief governance officer; River and Mercantile consulting business announces rebrand; and more.

Nationwide Promotes Pension Risk Transfer Business Leader

Nationwide has announced that Paula Cole has been promoted to vice president. Cole will continue to lead Nationwide’s pension risk transfer business.

With a career spanning more than 20 years, Cole’s leadership over the past two years at Nationwide has been instrumental to the company’s success re-entering the PRT market. She helped develop the strategic direction for Nationwide’s PRT business, which achieved more than double its annual sales goal for 2021. Her team’s size has doubled in the past year based on the rapid sales growth.

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“Since re-entering the PRT market, we have elevated and accelerated our people, processes and tools. As we strive to become an industry leader, supporting plan sponsors and members, Paula’s promotion is indicative of our commitment to our strategy and aggressive plans for growth,” says J.J. Perez, president of Nationwide Corporate Solutions. “PRT is a business we’re committed to for the long term. Under Paula’s leadership, our team takes advantage of Nationwide’s core competencies with some of the top talent in the industry, delivering on our promises with extraordinary care.”

Nationwide’s PRT business leverages nearly 100 years of annuity, defined benefit and risk management experience, as well as the company’s financial strength, to serve a legacy book with more than 500 contracts and 20,0000 annuitants, as well as 10,000 annuitants added since Nationwide’s 2020 PRT market re-entry, with a focus on personalized service and transition simplicity. In 2022, the business will expand capabilities to customize for plan needs, including asset-in-kind, cash balance and separate account transactions. 

In addition to her professional accomplishments, Cole serves as vice president for Nationwide’s African American Women Associate Resource Group. She is also an active leader in supporting colleagues through performance management, mentorship, and diversity and inclusion efforts. She serves her local community as a member of the board of directors for Thurber House and as a district activist leader for the National MS Society.

J.P. Morgan Announces Insurance and Annuities Head

As the company continues to build out its insurance and annuity capabilities, J.P. Morgan has announced that Paul Hewitt has joined the firm as head of insurance and annuities for the U.S. private bank, reporting to Laura Pantaleo, head of insurance and retirement solutions.

In this new role, Hewitt will be responsible for growing U.S. private bank adviser and client adoption of annuity and insurance products. He will partner with J.P. Morgan’s product, business development and advice teams to design education and thought leadership as the company rolls out this new offering for the Private Bank. Hewitt will engage with advisers to deliver advice and promote solutions to help clients achieve the peace of mind associated with the location and protection of their assets.

Paul brings more than 25 years of experience focused on insurance-based solutions and estate planning for America’s wealthiest families. He spent eight years at UBS Private Wealth Management, including serving as head of insurance sales and distribution with responsibility for sales strategy, growth, delivery and execution. Prior to that, he was with Merrill Lynch for a decade, where he was responsible for insurance solutions for the Private Banking & Investment Group and U.S. Trust business.

Verity Asset Management Names Chief Governance Officer

Verity Asset Management, a registered investment adviser, has appointed Robert McLean as chief governance officer of its newly launched service offering, the plan governance platform Vynntana. Vynntana provides a suite of tools and services in support of 403(b) and 457(b) plan sponsors and the non-Employee Retirement Income Security Act retirement vehicles they provide for their eligible employees.

Having served since 2008 in the employer-sponsored retirement plans space, McLean joined Verity Asset Management in October. Former president and CEO of independent third party administrator U.S. OMNI, he brings a wealth of knowledge and senior-level executive experience acquired in roles ranging from chief counsel and C-suite executive to public sector retirement plan industry consultant. He earned his juris doctor from Villanova University School of Law and his bachelor of arts in political science from Boston College.

His responsibilities will include designing operational policies and procedures, service offerings, training systems, and customer experience systems underpinning Vynntana.

River and Mercantile Consulting Business Announces Rebrand

As part of the sale of River and Mercantile to AssetCo in the UK, its U.S. consulting business has announced a spin-off, creating an independent, privately owned investment, actuarial and risk management group. Led by the U.S. management team and rebranded as Agilis, the new entity will remain focused on serving institutional investor clients with the same team in place.

The spin-off will reinforce client focus for the organization and better position the team for future growth. Agilis’ core business will continue to focus on custom solutions delivered through outsourced chief investment officer, actuarial and investment consulting, derivatives management, and pension actuarial and administrative services, including annuity buyouts and plan terminations.

With approximately 40 professionals across the U.S., Agilis is headquartered in Boston, with other offices in New York City and Denver. The full U.S. consulting team will stay intact, including leadership of the U.S. organization.

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