Welcome back to the 106th episode of Financial Advisor Success Podcast!
My guest on today’s podcast is Kathleen Rehl. Kathleen is a researcher on the money issues that widows face, the author of “Moving Forward on Your Own,” a financial guidebook for widows, and a speaker and trainer for financial advisors on how to work better with widowed clients.
What’s unique about Kathleen, though, is that she’s also a former financial advisor herself, having spent 17 years operating as an independent RIA before sadly becoming widowed, at which point she decided to sell her advisory firm and shift her focus to empowering widows financially as an encore career.
In this episode, we talk in depth about the challenges in working with recent widows. The words to use and what to say, as well as what not to say when working with a recent widow, how widows typically progress from a grief stage, where it’s so difficult to make good decisions, that Kathleen simply advocates for a decision-free zone for 6 to 12 months, to a growth phase where the transition work really gets underway to begin rebuilding the widow’s financial life, and then a grace stage that not all widows reach, where the foundation is set for a new life in a new direction. Which is important to understand because financial advisors that push the wrong financial issues based on a widow’s current phase will likely become part of that now infamous statistic that 70% of widows end out changing financial advisors… precisely because so few have a real understanding of and empathy for the issues that recent widows face.
We also talk about Kathleen’s own practice. Why and how she formed a niche in working with members of the clergy, how she ultimately wound out and sold the practice after becoming a widow, and the transition she made to becoming a speaker, researcher, and ultimately self-publishing her own book to help widows that has now sold tens of thousands of copies, including from financial advisors who often buy the book for their own recently widowed clients.
And be certain to listen to the end, where Kathleen talks about some of the recent research she’s done on widows and money, including a study that showed how widows who worked with a financial advisor had significantly more financial confidence in their future, and how the most effective advisors who’re working with the widows instilled even more financial confidence for their clients than the average financial advisor, a powerful testament to the value of a financial advisor in a uniquely challenging stage of life.
So whether you’re interested in learning what drives about 70% of new widows to fire their advisor, how advisors can better engage both partners in a marriage to establish relationships early on, and the best way that advisors can serve widows in their time of need, then we hope you enjoy this episode of the Financial Advisor Success podcast.
What You’ll Learn In This Podcast Episode
- Kathleen’s career path into the work she does today [04:39]
- What is likely causing a high percentage of widows to fire their advisors [12:57]
- Why it’s so important to make sure both partners in a married couple attend financial planning meetings [15:41]
- The three stages of widowhood that advisors need to understand [33:46]
- Why Kathleen says it’s important for widows to avoid making decisions for six to twelve months after the death of their husbands [49:47]
- Why she decided to sell her advisory firm and shift her focus to empowering widows [59:44]
- What her research tells us about widows and money [1:17:11]
Resources Featured In This Episode:
- Kathleen Rehl
- Empowering Widows Financially
- Moving Forward On Your Own
- Moving Forward On Your Own Family Foundation
- 10 Questions To Ask Your Widowed Client Who Re-Partner
- “Widows Are Hot” Video
- Financial Therapy Association
- Institute for Divorce Financial Analysts
- Sudden Money Institute
- Susan Bradley on the FA Success Podcast
- Widows’ Voices: The Value of Financial Planning
- Impactful Empathy
- Alliance of Comprehensive Planners
- National Speakers Association
- Modern Widows Club
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Michael: Welcome, Kathleen Rehl, to the “Financial Advisor Success” podcast.
Kathleen: Thank you, Michael. What a fun way to spend a Friday afternoon with you.
Michael: I’m looking forward to it and the conversation today. You know, you have I think a very interesting kind of niche and role that you do. You work with advisors and teaching them about how to work with widows and how to work with…how to handle all the issues that crop up with widows, which, you know, depending on kind of your look at the industry is an interesting niche that some advisors are increasingly specializing in. A problem area for a lot of firms, you know, with a bunch of the industry statistics that bounce around of something like 70% or 90% of widowed clients end out leaving their financial advisor within a couple of years. They don’t have that connection. They don’t have that fit or they’re not being well served for their needs.
And what I know has been an interesting journey for you yourself, having been an advisor for many years and then ultimately selling your practice and kind of transitioning into this work as, I guess you call it your encore career. Which I love, and we talk about that with clients, but you’ve done this as an advisor as well. So I’m looking forward to talking about a lot of this stuff of, “What does it really look like to work with widows effectively?”
Kathleen: Let’s do it.
Michael: Let’s do it. So I guess as a starting point, maybe you can just give everyone who’s listening to the podcast a little bit of context of just, what is the work that you do now? Because I know you break it up into a couple of different categories of things. So what is Kathleen Rehl today?
Kathleen’s Career Path Into The Work She Does Today [04:39]
Kathleen: Today I would describe myself as a speaker, an author, a mentor, and a gal who does research about widows and money. And this, I’ve been doing this for…coming to the end of my fifth year in this encore career. And that followed 17 years as a financial planner. I had my own business. I was an RIA. And I initially focused on working with clergy and doing things with folks who had philanthropic intents, who wanted to make special gifts. And then, after my husband died, I realized, “Oh my gosh, I think I need to be doing more work with widows,” because I experienced that crushing grief myself, and even for a little bit felt like a bag lady, which may sound strange. I’m a financial advisor, but my husband’s Social Security was gone, and his help as a business partner was ending and I didn’t know if I could continue on with the business.
But then I realized, “Oh my gosh, if I’m feeling some of these fears and I’m a financial advisor, pretty smart woman, you’ve got a Ph.D., a CFP, what about the ladies that don’t?” And so then I shifted the focus of that practice and wrote a book, a guidebook for widows. And as new clients came into the firm, they needed to either be widows or couples who were looking to that time ahead when there would be one surviving spouse left. So I continued to do that for several years and then had the opportunity to go into this encore career. And I’m going to be 72 years old in a few weeks. I’m going to keep going for a long time.
Michael: I love it. I love it. So I’m actually pretty curious to talk about the whole, like, an RIA with a niche in working with clergy, which is an interesting one unto itself. But I’ll come back to that. For now, like, just help us understand a little bit more of what kind of work you’re doing today. So you said like you had an advisory firm but you ultimately sold and moved on to that to move into this encore career. So what are you doing now around work with widows? Like, who are you speaking to and what are you researching?
Kathleen: All right, the speaking is generally at two different kinds of places. One is a financial advisory conference where mainly financial planners are going to be there. But it may be something like I’m doing one in February for estate planning folks. So that would be probably a lot of…you know, attorneys are going to be there.
Michael: Estate planning councils, professional planning institute, local organizations like that.
Kathleen: Yes. Yes.
Kathleen: And I have a corporate sponsor that brings me in for those sessions. And they’re generally just an hour. Sometimes I get two hours with the group. But it’s just…really, it’s like, working well with widows, just a broad overview. And it’s a very different kind of a session. If you ever sit in on it you’d say, “Oh my gosh, that is different.” For example, my PowerPoints have very few words on them. They’re mainly pictures.
Michael: That would be completely different than my PowerPoints. So, you know…
Kathleen: Yes, yes. Right.
Michael: …working well with widows, like, how many tax code sections could you get on one slide? So that’s not your duty.
Kathleen: No. And I weave many stories together. It’s very emotional. There will be people who cry. Some people leave because they’re so overwhelmed by the emotions and they come back in. But it’s my style, but I also believe I have to connect with the audience emotionally. Nothing is going to change for them really unless they connect with this emotionally. So this hour, hour and a half, two-hour presentation, we talk about the…you know, I tell my story of how I was widowed, and then I share some shocking statistics with them about widows today. You know, just some things like…in fact, I have them do a little quiz, and they work on it together. And some of the answers that they come up with are not exactly right. But it’s like that there’s 12 million widows in the United States today and 1 million more added every year. And the average age the wife becomes a widow is 59. You know, things like this. So we share those statistics.
Then I talk about the impact of grief and emotions and how this impacts a woman’s cognitive abilities. And it really is. And widows sometimes refer to this as the widow’s brain. Or in one of my other sessions, she called it the jello brain time. And it really is. Very smart women who suddenly can’t balance a checkbook or they can’t reach, you know, the CEO of a nonprofit organization, and she can’t understand her brokerage statement. But this is…it’s all part of this cognitive dissonance. The shock.
Michael: Because, like, just so emotionally distressed and in shock that, like, you just can’t…literally just can’t focus to think straight about issues.
Kathleen: Then I talk about the three stages of widowhood and what those stages are and some kinds of things that advisors typically can do within those stages. Then there’s some general advice that I share with brand new widows. Things like, you know, not rushing and watching out for wolves and making house decisions carefully, and it’s time to look at the investments that there are…oftentimes that there are changes because she’s an individual now, she’s not part of a married couple. And then not being a purse for others. And then ABC’s of financial advice for widows.
Then there are some ways to connect best practice ideas, if you will. Like if they want to do more work with widows, how can they reach out and do that? And then some general ways of assisting widows. And then I wrap it up near the end with research on widows and money. That’s something, up until about five years ago, I could count on one hand the number of empirical evidence-based scholarly…published in scholarly journal research on widows and money just did not exist. And so our team, which consists of…there’s four universities now involved, the two CEOs of the top widows’ nonprofit organizations in this country, and Susan Bradley. And I know you had Susan Bradley on as a podcaster.
Michael: Yes, featured this on podcast as well, talking about how you work with clients in transition.
Kathleen: And I’m on the faculty of Sudden Money Financial Transitionist Institute. But with full disclosure, I have to tell you that I’m not paid anything. I am on that faculty because I just believe so much in what they’re doing. And the Widows Special Interest Track, it’s great to work with advisors on that.
And then at the very end, I tell them just a little bit more. But that fills the hour, hour and a half, two hours, whatever I have. I toss in a few tools that they can use, like, they could go back right to the office and use right away. I talk about how they can use the book. I wrote that book as really a gift that could be given to widows by their pastor, by their financial planner, by their CPA, by their attorney, by their hospice worker. Because most women are not going to walk into a bookstore and say, “Oh, I think I need to get me a book about widowhood.” And it’s not supposed to teach them finance 101, it’s just to give them some confidence and just to feel a little bit more secure about the finances. And there are activities that the advisor can do together with them in that book. So we talk about using that as a tool also.
Michael: So can you help us go a little deeper on some of these items about, like, what do we do as advisors dealing with widowed clients, having, as you put it, you know, widow brain challenges around making decisions? You know, I think for a lot of us as advisors, this is challenging space, I mean, both just for, technically, like, there’s a bunch of blinding strategies and issues that crop up around the transition from a couple to a widow, but also just dealing with the clients in that emotional state and figuring out how you’re supposed to work with them and what that looks like in the middle of their grief.
What Is Likely Causing A High Percentage Of Widows To Fire Their Advisors [12:57]
Kathleen: One of the statistics that you commented on, it was either before we started the podcast or, you know, at the beginning of the podcast, but it’s the fact that 70% of widows fire their advisor that they used as a couple together. And that is real important, you know, to get this across to advisors. Like, what’s going on? Why is that happening? And I would see this over and over again, where new widow clients would be at my office and it would play out something like this. She’d say, “I’m here because we had another advisor, and after George died, he called me into the office and said there was some paperwork that I needed to sign.”
And she said, “You know, I never really knew him. My husband, he got his hot tips on the golf course with that advisor. I met him years ago, but I hardly knew how to get down to his office. But I got down there, and I went into the office, and the first thing the advisor said was I should be happy because I was beating the market.” And she said, “I didn’t care if I was beating the market, I just want to know was I going to be okay financially? You know, was I going to have to go back to work? Was I going to have to move out of my house? Could I still help my granddaughter with her college education? I didn’t care about beating the market.”
And she said, “And then he started showing me these graphs and charts. And I never understood those. My husband would bring them home and I never understood them before and I really didn’t understand them then. And you know, he never even mentioned George’s name during the meeting. He just kept calling him my deceased spouse. And I started to cry. And he said to me, ‘Don’t worry your pretty little head. We’re going to take care of everything for you.'” And she said, “At that point, Kathleen, I just lost it. And I left. I left the meeting. And his secretary called the next day and said that we needed to reschedule it. And I told him I had another appointment and I couldn’t make it. And that’s when I talked to my friend Betty who said how helpful you’d been after her husband died. And so that’s why I’m here, Kathleen. Am I going to be okay financially?”
So it was a case of, there never really was a relationship with that woman before George died. And then after he did die, he didn’t have a clue on how to communicate with her, how to talk with her, what to say, what not to say. And so, you know, she wound up coming to me. Which I had several widowed clients that would be a similar story like that about what had happened. And she left that advisor. And guess what? Her money left that advisor too.
Why It’s So Important To Make Sure Both Partners In A Married Couple Attend Financial Planning Meetings [15:41]
Michael: So help us unpack that from the opposite direction again. Like, how could we have corrected our unfortunate former advisor’s behavior? Like, what’s missing?
Kathleen: Be sure she’s part of the relationship. And in fact, this may be too strong for some advisors, but that was a rule that I had. That during the foundation, initial year of planning with me, both spouses needed to be at the meetings.
Michael: So I’ve got to ask on this, so I guess partially playing devil’s advocate but just sort of reflecting on experiences and challenges in our advisory firm, like, some couples just, they carve up, you know, the couple’s duties. There are certain things she does, there are certain things he does, at least sort of classic gender stereotype roles. You know, we do see a lot of like, she manages the household cash flow and the checkbook and he manages the investments and kind of the household balance sheet. And that’s just how it gets split up. I mean, we’ve seen plenty of situations where…we at least try to encourage, “For our clients, like, we’d really like to meet with both of you,” and, you know, some response like, “No, no, my wife doesn’t like dealing with this stuff. Like, I deal with this stuff, she does other things. You’re working with me.”
Kathleen: And I know that works for some advisors. I knew for me it wasn’t going to work. And that foundation year, that’s when we… And the way that I did, I was fee-only, and I did kind of a modular approach. And we’d have some meetings where we were doing investment policy statements and then selecting investments, some on insurance, some on estate planning, a variety of different things over the course of the year. And I wanted both spouses to have a broad brush overview.
And I have to tell you, it wasn’t…and what you say about dividing up responsibilities, we saw that in the research that we did too. That, like, there were a lot of widows who said that they did not have a total picture of what was going on before the death. They did some things and some folks did others.
I said that I worked with clergy in the first part of my career a lot, and many times it was the…and these were clergy who were part of the era when pastors were just men. Now today, male and women, but a lot of my clients were…you know, they were in their 50s and 60s and 70s. So it was just an era when men were the pastors. So I talk about the pastors. That was the man part. It was the wife who was the more astute one. The husband had this, you know, “Oh, the Lord is going to provide. Everything is going to be fine.” And she’d say, “No, the Lord has provided us with Kathleen as our financial planner, and we’ve got to get our ducks in order if we’re going to retire on time.” So it was the woman who was really pushing, pushing on it.
Michael: I love it. I love it.
Kathleen: So he’d come along. But then after that, and granted, there were some of them who for this reason or that they couldn’t always make it. But then after that foundation year, most of my clients, they came together because…I mean, I made the meetings fun, and I made them really interesting. In fact, some of the… One client who was a very, very bright guy, he was a professor, and he said, “You know, the reason that I’m working with a financial planner is because I want my wife to understand this stuff because I’m going to be gone someday and I want her to understand it. And I can’t make any headway whatsoever. She just says she’s not interested. And so I want to work with you.”
Michael: So how did you, when you were wearing that advisor hat, overcome those situations where you want to work with them both but you’ve got this couple where he’s involved, she’s not. He’s even just said like, “My wife doesn’t want to be involved in this stuff.” So, like, what do you do?
Kathleen: I had one guy, he says, “I know the rule.” He would come, this is honest to gosh truth. His wife was really with it. He would come, and during the meeting, he would sit down on the floor and play with the cat. And he said, “You girls are doing just fine up there. If you need me to come up, just say the word and I’ll come up and sit there. Otherwise, you guys just…” So, I would address him on the floor playing with the cat periodically.
Michael: This is how he would just, like, throw his wife into the deep end with you? Like, he’d just go play with the cat and let you do your thing?
Kathleen: Yeah. And she was…quite frankly, she was the astute member financially of that family. So that worked for me. But for other advisors, I mean, there are things that you can do on a social event. There was one that we would periodically do in February, Valentine’s month. And we would say…it was a wine and chocolate tasting party. And it was like, saying I love you mean sharing the financial information. And so we had a little talk about…it was related to estate planning. You know, are the beneficiaries up to date? Do we know where the passwords and the PINs are and it’s accessible to both spouses? What’s in the safe deposit box? Have we really shared our values through our estate plan or do we need to do like…there was just a number of things. But it was in a social context and several people came together. And it was kind of a fun evening. And we would generally get a good turnout for that.
My practice was…it was real different than folks that you interview on this podcast. I know. I had a home-based practice. It was very homey. We had a beautiful house. The back end was all glass. It looked over Lake Toni. Because money is, you know, oftentimes stressful, I wanted this peaceful, quiet place. It was a nice place. And so we had party kinds of gatherings in that house.
Another one that we did in February, it wasn’t for couples, but it was for women who didn’t have hubbies to hug. And that was right around Valentine’s Day. So there are social kinds of gatherings that you could do together.
Michael: Okay. So it doesn’t necessarily…it wasn’t necessarily always just trying to pull a less involved spouse specifically into the financial planning meetings in the office, it was just finding any way to do any kind of event from the firm that would give you some opportunity to interact with the spouse, get a little more familiar with spouse, let the spouse get more familiar with you so there was at least some connection where the first meeting isn’t, you know, after George’s passing.
Kathleen: And we were, yeah, very family-oriented. So with my clients, they had grandkids or kids, and they wanted to include them in the plan, not only with estate planning but just other kinds of things. So it was that interest that it was a good fit for me.
Michael: And you said as well that, like, you tried to make your meetings fun. I’ve got to ask, like, what’s a fun financial planning meeting?
Kathleen: Well, or maybe not fun but interesting. Beginning with the premise of… Well, the first time they would come in, so like for get acquainted meeting, after my late husband, who was the one that would screen them on the phone and then get an idea if he thought they would be a good fit or not, but they would come in and we would just, right from the get-go, start talking about, “What’s important to you? You know, what gives you a lot of joy in life? How did you two meet?” Things that weren’t really like, “Okay, we’re going to talk about your investments right now and we’re going to talk about how we can get you a better…” No. It was like, we didn’t even…
Michael: Right, “What gives you joy in life and how did you meet” is a much more comfortable conversation. Like, “So tell me how much you’re worth and which portion is investable.” So beyond, you know, trying to build relationships with potential future widow spouses before they’re widowed, when you’re still working with them as a couple, what else should advisors be more mindful of as they’re looking at and trying to work with widows?
Kathleen: And I just thought of something else too. When the couple, they’re both still alive, before one of them dies, if there’s an opportunity for family involvement to meet the kids. Like if they were in town, I oftentimes took up invitations to meet those kids so they had a relationship with me. Because that can sometimes be a barrier too after the widow has left, hubby dies, and an adult child steps in and says, “Well, I’m going to take care of mom’s stuff now.” If they don’t really know you or trust you. All right, so I got distracted by that other…
Michael: I was just asking, so, you know, aside from, try to get a better relationship with potential future widowed spouse before they’re a widowed spouse, what else can advisor do or could that particular unfortunate advisor have done to have made that meeting with a recent widow go better?
Kathleen: Communicated better. Like that, “Don’t worry your pretty little head, we’re going to take care of everything for you,” Woo dear, no. Never say something like that. You’re going to be her thinking partner, not tell her what to do but help her figure things out together. But definitely not tell her, “This is what you’re going to do.” Not using his name. You know, that’s part…telling a widow, telling her and asking. He obviously knew George before, but he could have said something like, “George was such a pillar in this community. I mean, look, you know, at the memorial service, all the beautiful things that people said about him. I was just so touched.” Sharing memories. If it was somebody that he didn’t know the husband before, like it’s a new prospect coming in, you can say something like, “Unfortunately, I never had a chance to meet George, how would you like others to remember him?” But as a widow talks about her husband, tells her stories, that’s actually part of the healing process.
And some advisors are afraid, “Oh my gosh, she’s going to cry.” Well, those tears are part of the healing… You know, there’s a couple of kind of tears. There’s the kind of tears, you cut yourself, I was like, “Oh my gosh, that hurt so much.” And then there’s another kind of tears that actually flushes toxins out of your system. So it’s okay that she cries.
Michael: I think that’s a challenge point for a lot of us as advisors. Like, I know how to handle number stuff. I get a little wobbly when clients just start crying in my office.
Kathleen: And if you go out to…I think you’ve been out to my website. There’s several free little e-books that can be downloaded. And there’s one that’s called “Impactful Empathy.” And that has some good suggestions of what to say and what not to say.
Michael: We’ll be certain to put a link to that out on the site as well.
Kathleen: And people don’t need to be afraid because I don’t even ask for your name and contact information so I can go chase you because I don’t want to do that. And it’s just there.
Michael: Okay. So this is episode 106 for those who are listening. So if you go to kitces.com/106, we’ll have a link out to the e-book material and Kathleen’s website with the “Impactful Empathy.” I know for a lot of us, like, literally figuring out, “What on earth am I supposed to say?”
Kathleen: The cliches. I mean, we’re a society that does not know how to talk about death and dying. It used to be, you didn’t talk about sex, you didn’t talk about money, you didn’t talk about religion and politics. That was years ago. Well, now everything else is out there but death, and I don’t think there’s really a reality TV show about death, but we don’t know how to talk about death. So usually, one of the most common thing that comes out of a person’s mouth when they learn that there’s been a death is what I heard so many times, “Oh, I’m so sorry for your loss. Oh, I’m so sorry for your loss.” That’s just like a perfunctory. What does it mean? It doesn’t mean anything. It’s just a space filler. And I would hear that so much. And I wanted to…at one point I wanted to say, “Not half as sorry as I am.” And when you really think of it, the pain point is the person who’s saying it, like, he’s saying, “I feel sorry for the death of your husband.” It’s not helping me as the widow at all.
Michael: So what should we be trying to say? Like, what…?
Kathleen: I want to give you just a couple of other ones that I would hear a lot. It was like, “He’s in a better place now. Oh, it’s good he didn’t suffer long.” And one of the worst ones that maybe because my husband was a pastor and they thought I would like this, they said, “God needed another angel in heaven.” I said, “No, I needed this angel right here with me.” So things like…that I had just mentioned before. We were sharing a memory of him. “If you look around the community, we can see this and that.” Or, “He loved his family so he…he loved you so much and he wanted to do everything right by you. And every time he would walk through that front door, I knew he was going to have a new joke to share with me.” But sharing those stories, what you remember about her deceased husband is going to be a lot better than, “Oh, I’m so sorry for your loss.” Here’s another one that may be appropriate, “I can’t begin to understand your loss, but please know that I’m going to be here and I’m going to walk beside you on this new journey.” Or another common one…
Michael: And that’s bad.
Kathleen: I know that’s good.
Michael: Okay. Okay.
Kathleen: That’s a good thing to say. Or…oh, it’s slipped my mind, that I hear very often. I’ll think of it in two minutes from now. That’s what happens when you’re almost 72 years old. Sometimes the brain takes a little bit longer to churn, to come up in the hard drive.
Michael: So a lot of it is just… Well, so I feel like I’m just sort of thinking through this in, you know, client situations of past that I probably used poorly selected phrases. One or two of which you’ve mentioned here. I feel like the hesitation from the advisor’s end I guess really gets back to like, “Oh God, if I start reminiscing on memories, like, you’re going to start crying and we’re going to go down an awkward road.” Right? I feel like that’s sort of the hang-up or the hold back that I would have from the advisor’s end. Like, we’ve got some stuff to get through. I do have some paperwork today. For sharing memory, there’s going to be crying, and this is going to drag out. So, I don’t want to go there.
Kathleen: Do you think that that is…the uncomfortableness is on your part as opposed to her being uncomfortable with you sharing a story because maybe you’ve not done that before? And the research that we did, you know, one of the findings was, like, the widows who were more satisfied today with how things worked out financially than when they were widowed two, three, four, five years ago, those were the ones who had worked with financial advisors as opposed to not with an advisor. But then when you compared those advisors who were…on the study we call them more skilled advisors, these were the advisors who were empathetic, who had great communication skills, who did these kinds of things, they were statistically significantly better than just the technical advisor. And you might call this the one who was more…the technical versus the personal, the empathetic, good with communications. That makes a difference.
Michael: And how did you define those advisor groups? I know you’re coming from a PhD research background, so I would imagine you’ve got some, like, operational definitions around, like, what were skilled communicator advisors versus not. Like, how do you separate those groups?
Kathleen: We had, and I’d have to go back to the actual study, which one of them was published in the “Journal of Financial Services Professionals.” Actually, a couple of them were published there. One was in “Financial Planning.” But we had different measures where they talked about what their advisors had done with them or they identified, yes, the advisor had done this or not done this.
Michael: And what sorts of things were you looking for, like, what the advisor had done or not? So it’s like just talking about their situation, making certain financial decisions?
Kathleen: To have them feel more satisfied today or…? There was a Likert-type scale where they identified how satisfied they felt today versus when they were first widowed.
Michael: Okay. So, you know, just literally, like, better financial metrics?
Kathleen: Yes. So it was like a five-point scale. And those who had identified that the advisors that had these communication skills, these empathetic skills were rating their satisfaction today as higher than those who were just mainly doing like investment decisions and technical things. But both groups were higher than the widows who did not use a planner, an advisor at all.
Michael: Because they literally just made more financial mistakes or something about the advisor-client relationship itself?
The Three Stages Of Widowhood That Advisors Need To Understand [33:46]
Michael: And so you mentioned that in working with widows, they go through stages. So what do stages of widowhood look like from the advisor’s perspective? So I’m trying to figure out, like, what am I supposed to be doing and saying in working with them.
Kathleen: Okay, three general stages. And the first stage is…I mean, there’s a time to take care of me, a time to take care of business, and a time to take care of more. So that first stage is that taking care of me. That’s intense grief, numb face. And that’s when she’s got that little brain, the jello brain, as one gal called it. She’s not cognitively processing things so well. And it’s a time for financial triage. And she needs to be heard and understood then.
It’s also, by the way, a time that a lot of widows, health is precarious. And in some cases, like if they’ve been nursing hubby along for many, many years and then he dies, it’s like, they collapse themselves too. I had two cases of…where shortly after the death of the husbands, both those women developed cancer. So it’s a time to be need, you know, to be heard and to understand. So it’s a very, very highly vulnerable time. And it’s a time when there shouldn’t be any big irrevocable decisions such as moving out of the house instantly or, you know, moving across the country to live with relatives, or taking the proceeds of the life insurance and investing it right away. Because she hasn’t really thought through, you know, what her new life is going to look like. She’s not really secure about where she’s going.
I had one widow that she came in for…I used to do, I call them financial retreat weekends. She flew in from Montana. She contacted me and she said, “The wolves are circling, Kathleen.” She was being pressured to buy things that she didn’t understand what they were for with the…there was a fairly large insurance settlement. I think it was about a half a million dollars. And it would have been…he wanted to lock it up in this annuity that would be good for retirement goal that was totally inappropriate for what her needs were. She was a young widow, about late 30s. So she came in and worked with me. But no big irrevocable decisions.
And yeah, the advisor is going to focus on some immediate kinds of like needs for cash, making sure bills are paid, initial estate settlement work, broad brush overview of the assets. If he’d worked with her before, he, of course, knows what the assets are. But if it’s a brand new client coming in, that advisor is not going to know, and so just, he’s going to look. And a lot of times widows, they don’t even really understand what they’ve got.
I can remember one gal came in. She had just a cardboard box full of stuff. And her husband had been gone about six months. She was in her mid-70s at that point. And she said she never really understood but could I take a look at the stuff? So at the next meeting that we talked about the investments, I had done a net worth statement and subtotals. Then we got down to half a million and she said, “Yeah, that’s about what we were worth.” And I said, “No, there’s a whole lot more than that.” And she said, “Oh, there can’t be more. We were not that kind of people.” And there was. We kept on going. They were worth a cool $2 million. And that didn’t even include the value of the farmette, you know, the house and the little farm hut that she was living on. Well, she got mad and she said, “All these years he said we didn’t have enough money to travel and we couldn’t help our son when he was building his house and, you know, I couldn’t buy that new dinette set.” Because she didn’t have a clue what they had. But oh, I’m sure she didn’t stay mad very long because she started traveling with a lady friend.
Michael: She did find a way to start making up for lost time I guess.
Kathleen: Yeah. And I use a yoga term on her. I talk about this as, this is the time to breathe.
And the second stage is… I like alliteration, so I’m using the G sound. We had grief at the beginning and then this is the time of growth. And that’s where it’s taking care of more general kinds of planning because their cognitive functioning, that’s normalized now. I don’t know if you’ve seen the book, but there’s…the guidebook, but there’s six pages of steps for recent widows. The advisor will have started a lot of those but will be finishing up those six pages of steps to be done. And there’s some basic…
Michael: Which are what kinds of things, for folks who are listening? I haven’t read the book yet.
Kathleen: These are the broad categories. Funeral/memorial period. Begin to organize information. Contact your attorney, tax preparer, and financial advisor. Review cash flow and liquidity needs. Collect benefits. Adjust health and other insurance. Review assets and liabilities. Complete the estate settlement. Take care of yourself. And in the future, move forward with new goals and new life. And under each of those sections, there are anywhere from three to seven or eight little sub-areas to do.
Michael: So it’s just kind of literally like checklist-style. Just, “Here are the things that we need to deal with.”
Kathleen: And some widows that I’d worked with, they like this because, you know, they could mark, done, done, done. And to keep an idea of all the things that…the pieces that needed to be done.
There’s going to be some investment decisions that were appropriate for them as a couple, but now that she’s an individual and widowed, they may not be appropriate. So I had a number of those where hubby…there was one. He was a brilliant neurophysician. He retired early. And in his hobby list, he took up day trading. And he hadn’t really done bad for it, but he hadn’t…he did okay. And this was before the market crash. And she said to me, you know, “I never really understood that stuff he did, but just I think…would you take a look at it?” And it was. He had, it’s like…she was in her late 60s at that point, and it was like 90% stock, but it was foreign stock, not the, you know, U.S. kind of stock. And so I, you know, shared with her what she had and she said, “Oh my gosh, should something happen to the market, I could really be in problems.” So we created a new investment policy statement and reinvested the stuff according to…and then the market tanked, started tanking shortly after that. And it continued.
And she was at my office one day. This was about seven or eight months. And she said, you know, “Could we look up those ticker symbols?” And we did. And most of them had gone belly up. But when we first were ready to…you know, when we were ready to start selling the stuff, and she said, “Stop. You know, I can’t do it. I can’t do it.” And I said, “What’s going on?” She said, “It looks like I’m slapping Jim in the face.” And saying, “Everything we did together and what you did for us, I’m just going to willy-nilly sell.” And it was like he was controlling from the grave. And I would see this in a lot of cases with some widows. Maybe it was a vacation home that she wasn’t getting up to anymore and she couldn’t take care of it anymore but yet she wanted to hang on to it. Or maybe it was a business that they had, but emotional connections.
Michael: And so how do you handle those situations, right? I mean, well, you know, the vacation house, you know, up in the mountains maybe is one thing, but when you get into like, “No, I don’t want to sell this concentrated position in international stocks because, you know, Jim set it up and did this for us.” And you’re looking at this going like, “This is a financial catastrophe waiting to happen.” Like, how do you navigate those moments?
Kathleen: She was smart enough. Like, she had first come to me saying, “My tummy is telling me this is maybe not the right one.” So that’s why we had done the investment policy statement, had it all planned out. You know, she was going to keep some for growth, but it was going to go into more like index and mutual funds. But she wanted to preserve what she had rather than lose it. And so she understood that. So then we just stopped and we revisited that investment policy statement and what her goals were. Did she really want to do these things? Yes, she did. Okay. All right, now I’m ready, let’s go ahead with it. So we reinvested it at that point.
With one of them, with the vacation home, it was a meeting with the son who came in. And he understood that…you know, he never got to the place either. He didn’t have time. As a kid, he grew up and he liked it, but nobody was going back there. And he understood that mom really needed permission from him to sell the place. So bringing him in helped.
And then they’ll be…in this growth phase, they’ll be pre and post-retirement issues and house decisions. Whether she’s going to go or stay or downsize or what. And that’s a time of balance. And people will say, “Well, how long does it take for her to get from grief to growth?”
Michael: That was going to be my next question. Like, how long do we need to go from stage one to stage two?
Kathleen: I address that in the workshops I do because I know it’s going to come up. And it depends. It depends on a lot of things. One of the things it depends on is circumstances of death. So a perfect example. I had two of my clients I’d worked with for a number of years, and the husbands died within two months apart. Now, in the first one, it was a sudden, unexpected death. The husband was in his early 60s. He’d taken early retirement. His wife wanted to keep on working. She was an executive with the school system who was just dynamite and she loved her work, so she kept on working. But in the meantime, he became a gourmet cook, you know, remodeled the house. He was out playing doubles tennis with a group of guys. He died. Died on the tennis court.
Michael: Like, on the tennis court.
Kathleen: Yeah, he had a massive heart attack. Totally…you know, he’s happy in life. He’s exercising. He’s dead.
Michael: He’s healthy. He’s playing tennis. This is supposed to be good for you.
Kathleen: So she gets a phone call, you know, to get to the hospital, but, I mean, by that time he’s gone. But totally unexpected. Two months later, another one of my clients, they were both in their…husband and wife in their 80s, and they’d said, like, the hubby was really living on borrowed time. He had dementia. I really think it was probably beginning of Alzheimer’s, but she was his primary caregiver. They were just joined at the hip, did everything together, but he died quietly in his sleep one night. So she had been doing some of her grieving previously. So passing from grief to growth, that earlier unexpected death, it took her almost a year. Because I use these three stages with my widowed clients and they self-identify, you know, where they are. And we talk about their movement. But she identified, she said, “I think I’m moving into the next stage right now, Kathleen.” The other gal with the anticipated death, it took her just about six months to move into that stage.
And then the third stage…and by the way, this is not a linear. It’s like, “Okay, you’re in grief and you’re done with grief, now you’re in growth.” There are some days it’s two steps forward and one step backward or one step forward and two steps backward. That happened to me several times about five months after Tom died. I’m sitting outside in the swing looking over Lake Toni thinking, “Oh, I’m making progress. I’m doing really well. It’s great.” And then I went in the house and I sorted through a box of Tom’s theological books to give away to a seminary, and there was a card that he had used as a bookmark, and it was stacked in one of those books. And I looked at the card and it said, “I will love you forever.” And I just lost it. I just absolutely lost it. But my tears didn’t last as long as they did, you know, the first month after he was gone.
But then the third stage, that’s…and building on alliteration it’s grace, with the G. And some people like to call it transformation. But either one works. And that’s when you can do some advanced planning. And a whole new life is evolving for her. She’s going to be repurposing things. It’s a sense of independence. There will be new friends, new activities, maybe travel, maybe a new business, a different job, you know, depending on what their age is. The advisor can do some advanced estate planning and charitable planning if that’s appropriate. And with all of my clients, charitable planning was a big part of what we did.
I’ve got a little redesign your life. The Legacy Lifeprint, that’s a way to share stories and values and aspirations for the next generation, which most clients found a lot more fun to do than just getting the will in place. Special family issues. And the yoga term there is fulfillment. And no matter what stage a widow was at, I found it in common that the underlying thread was a desire to feel financially secure. That was very, very important for them, no matter where they were at.
Michael: Is to feel financially secure. You know, I was struck even when you were talking about the unfortunate sample advisor who, you know, loses 70-plus percent of their widowed clients, that one of the pieces that kept coming up in that description was, you know, “He talked about the investment performance results. I just wanted to know if I was okay.”
Kathleen: Yeah, being secure. And not all widows make it through all three stages. There are some, none of my clients but some, you may have heard the term that they’re just stuck in their grief. These are most likely mature widows who truly were connected at the hip with their husband. They just did everything together. And some of these, the death is…like, their own death will be within a couple of years. Some of them died within the next day, some of them hours. You hear on the news periodically. And they’re not even sick but they die. And there’s a medical condition. Cardiomyopathy is…multiple cardiomyopathy I think is the actual term. But it’s written up in the medical journals of death of a broken heart, you know, really, really, really happens.
There are a lot of women who get to stage two and they’re comfortable there. It’s a secure place. They’re comfortable. It’s a good place, and they’re happy there. So that’s fine. But for those that make it on to stage three, that can be just a beautiful experience. And it can be beautiful for the advisor working with that woman, who has seen her go through the different phases.
Michael: And for widows who are going through the second phase, kind of getting to this third grace phase, is there a typical timeline or range about just like…
Kathleen: It takes years. It’s been 12…it’s coming up on the 12th anniversary of my husband’s death, and 2 days before Valentine’s Day. But it took me, it was about five years. And I was writing in my journal, and I said, “Hey, I am so much more than a widow. I am an independent woman.” So it took me years to get there, of talking to other widows. Yeah, it’s not something that’s going to happen two years out. Uh-huh.
Why It’s Important For Widows To Avoid Making Decisions For Six To Twelve Months After The Death Of Their Husbands [49:47]
Kathleen: I think one of the tools that I like to share with advisors, with a brand new widow that’s coming in talking to them, knowing, “What are your concerns right now? What are you most worried about?” And hearing what they are. It might be, you know, “How do I handle my investments?” Or, “We never talked about this many stuff before. I don’t understand.” Or, “What am I supposed to do with the insurance money?” Or, “You know, should I stay in my house or should I move?” Whatever it is. And the advisor hears those things and then comes back and says, “Now, if I hear you correctly, you’re concerned about what to do with the insurance money.” And, you know, you write that down. You write that down. And you go through your list of three or four or five or six or whatever things that she’s talked about and let her know that yes, you do hear her, you get her. And then say, “Yes, we will be able to address each of these.”
And then if you’re continuing on you can say, “Some of these things do…there are some things that require some attention right now but some don’t happen…don’t need to be dealt with right now, they can be dealt with soon, at a later point and even some postponed to further out.”
Michael: I feel like that becomes one of the challenges for us as advisors, of trying to navigate these time windows, right? I mean, I’m thinking, reflecting back to client situations we’ve had over the years. You know, some at least are challenging from the traditional advisor perspective scenarios like husband died, there was a life insurance policy, there is now a material pile of cash. And our natural inclination as advisors is like, you know, cash is an idle asset. We should be investing this. But it sounds like that’s not necessarily a good conversation to be pushing with a widow still in the grief phase. As you even noted, like, reinvesting life insurance proceeds is not always a priority conversation for them. But I’m looking at a pile of cash that shouldn’t really stay in cash, especially when it’s that large of a pile. So, like, do we need to just back off that as advisors and say like…?
Kathleen: Yeah, don’t rush. Susan Bradley talks about, in fact, it may have even been on the podcast, about that no decision zone.
Michael: Yeah, I think she advocates just as much as a year of just having a no-decision zone.
Kathleen: Actually, I said it wrong. It’s Decision Free Zone, DFZ. That’s the actual term. We want to get this right. So there are decisions that are made but not the big irrevocable decisions. And with the insurance, like, there are a lot of insurance companies that you can just keep the money parked there. I would have widows who’d say, “Oh, I want to pay off the mortgage right away with…” So I’ll use the money to pay off the mortgage. But that might not be a really good decision because you haven’t really decided what long term she’s going to be doing with that house. If she’ll be staying there or if she’ll be relocating. And then you’re taking a liquid asset of that cash and pouring it into an illiquid asset, the house. So they could just park it at that insurance company. And, you know, some of them are paying quite nice interest rates, more than…
Michael: Get the insurance company’s general account that actually has an okay yield in many cases.
Kathleen: Right. And then make the mortgage payment out of that account, you know, so she’s not seeing it coming out of her checkbook right away. But before she’s really had the time, you know, really to…literally, for many widows, they’re going one day at a time. And then it gets to the point where one week at a time. I can remember me, it took me several months before…I mean, I cocooned in my house but it took me several months before I could go out for an evening activity on my own. I could get out during the day, but I couldn’t get out in the evening. I couldn’t think straight about this. So she hasn’t even considered what possibilities were.
One gal who had come to me, she had taken some advice and invested all that insurance money, and then she forgot, like, there were other bills that came through. He had some extensive medical work. And there was some insurance coverage, but some bills didn’t arrive for months and months later, while in the meantime, she’d invested all this money. And what was she supposed to pay these bills off with? No. So it was just too quick. So with this decision-free zone, she’s going to take some time.
Michael: And again, and I guess just our inclinations around things like, “Cash shouldn’t sit idle and needs to be invested,” and such, just, we need to get over ourselves basically?
Kathleen: And if you’re addressing that, like this…I talk about this now, soon, later. I’ll give you an example of one gal that I went to see her at her home. It was after the memorial service. It was a couple of weeks later. And I didn’t want her driving over to my office because I was two hours away from where she lived. And I knew she was on meds to help her sleep at night. So I went over to her house. And she had put little yellow Post-It notes in the kitchen, the dining room, the office, the garage. And she said, “Kathleen, if I think of something, I’ve got to write it down, otherwise, if I go from the kitchen to the office, I will have forgotten it.” And she said, “Am I going crazy now?” And I said, “No, you’re just in the early phases of grief.” So she had been, like, a really…this high-powered executive and real alpha type and, you know, “Let’s do things.” And she was one who had all these things like, “What do I do?” She knew they needed attention. And we sorted some things out.
And I took this now, soon, later. And it’s really easy for an advisor to do. You just take an 8 and a half by 11 piece of paper and fold it in thirds. And have her in her own handwriting, and I like to do it that way because kinesthetically she’s going to connect with it and she’ll remember it better too, wrote “now” in one column, “soon,” and “later.” So the things that she wrote, I’m looking at actually my notes here. But what she actually wrote down was spending time with the family, that was one, two, postponing a trip to Germany. They were going to go on an anniversary trip. And so need to get that postponed. And requesting leave of absence. She first said, “I’m going to quit work. You know, I can’t function at work.” But I knew her job was a lot more than just a paycheck for her. She got a lot of enjoyment from that job. So request a leave of absence. Okay.
The soon, that was important things to do, but we didn’t have to do immediately. There was, pay bills, the second one was trying some self-care, yoga, and three, applying for company death benefits. And then the last column, the later was postponed, sell the second car. Because she went, “What do I do with this car?” You know, we can sell that later. Hire household help. And he did everything around. And she said, “I don’t know if I can stay here.” And I said, “Well, we’ll just, you know, hire.” Rolling over his 403(b) account. And then see an attorney to draw up a new will.
But then she had that. And she…every time we met, she would write these down. And she said…she would look at them then during the inter-meeting time, and she knew that, “Okay, we’re working on these things.” Those meetings with new widows also were more frequent and shorter. Instead of having, you know, two hour-marathon meetings and going through, you know, retirement plan that goes for 15 years, no, we would have, like, shorter meetings, more focused and still getting things done.
Michael: And more frequent. So, like, which means quarterly, monthly? Like, how often are you meeting with clients in these situations?
Kathleen: Monthly. Monthly. It was about monthly.
Michael: And so at least through some initial intensive phase, and then presumably you normalize back to I guess a more traditional meeting schedule for advisors. Or I guess if you’re meeting more often but the meetings are shorter, you may not actually spend more in meeting time with clients. It’s just in a different format and structure.
Kathleen: And most of my clients wanted to come to me, to my comfy home location because they knew they were going to get cookies and tea and a hug from me as opposed to a phone meeting. Which I had other clients who were, you know, not in that situation, and some of those, you know, they love to do phone meetings.
Michael: Right. Well, to each their own about their meeting communication style preference of choice.
And so as advisors, like, we should be just, like, monitoring just to try to understand like, “Which of these phases is my client in?” Okay, if they’re in grief phase, we’re talking decision-free zone and just regular blocking and tackling prioritization. What’s now, soon, later?” Just sort of dealing with the things that are urgent and have to be dealt with and allowing the rest of roll forward. And then at some point when clients are in growth phase, we can come back to the rest of these decisions and issues that at least we may want to revisit as advisors but the widow just may not be there yet?
Kathleen: And I think even having these three stages, to show a widow at some point, it normalizes it. It’s like, “Oh, other widows go through this too.”
Michael: Interesting. And just literally showing them or talking them through the three stages.
Why She Decided To Sell Her Advisory Firm And Shift Her Focus To Empowering Widows [59:44]
Kathleen: Well, I’m a morpher. I have morphed many times through the years. I started out as a public school teacher, and then I went back to school and got that Ph.D. and was a college professor in education. People say, “Well, what’s your Ph.D. in? Economics or?” I say, “No, it was education. I’m a teacher at heart.” So after I got tenure, my colleagues thought it was nuts, but I left the ivory towers and I went and worked for a nonprofit organization. I stayed there 10 years and then I was 2 years at another nonprofit. And that’s where I really cut my teeth on a lot of this financial stuff. I was working…it was a healthcare foundation. And I was working with wealthy doctors, insurance agents, estate planning attorneys, financial advisors. And I wanted to speak the same language that they were speaking.
And many of them were making gifts to the foundation. So I thought, “You know, I’m going to get my CFP. And that will be a good thing to do.” But as I got into it, “This is really interesting.” And I also realized that these rich doctors, they wanted to make gifts to other organizations rather than just the healthcare foundation where I worked. And I thought, “Man, that’d be really cool to sit on the same side of the table that they sat on.” So started working on my CFP, then went through a transition and kind of slowed that down. Worked for another nonprofit for a couple of years but told them I was only going to be there two years and then I was going to be a CFP. So I finished my credentials, opened up my shop. So I went from education, teacher, professor, development officer for a non-profit for 12 years and then started my financial planning business.
Michael: And when was this? Like, are we in the ’90s now?
Kathleen: I think it was ’96, 1996 that I got the CFP. And at that time, I mean, I always knew from the get-go that I was going to be fee-only, that just made the most sense to me, and that I was going to be small. We were going to have a boutique practice. And there was a white paper that I can’t remember the guy who wrote it, it was ending ’90s, and he was talking about how small planners were not going to make it unless they had themselves a niche.
Michael: Mark Hurley’s Undiscovered Managers paper from 1999. Yes, it was like, the future is like, all the industry will consolidate and quash out all the small practitioners and there’ll be no more solos in 15 years.
Kathleen: Yes. So I figured, “Oh, I better get myself a niche.” And because my husband was clergy and we did a lot of socializing with clergy and there are so many unique things that you can do with clergy, like as you probably know with the tax situation that they can get their 403(b) money out totally tax-free if they…
Michael: Yeah, tax-free parsonage, big spends allocations, and all those unique rules. Yep.
Kathleen: Yeah. So I started specializing in clergy. I still was doing others at the same time, but that became my niche. And there was one year even the “Mutual Funds Magazine,” you know, I think it was 1999, I was in the top 100 planners across the whole country. And it was because of that niche. My neighbor came running across the street and he said, “Is this really you Kathleen? This can’t be you. You’re just a small…” I think at that time I had maybe 20, 25 clients. Well, I added a whole lot more that year. That was a good piece. But I never…yeah, never really wanted to have a huge practice.
But then my husband died in 2007, and that’s when I shifted. And when I went through this utter grief myself, I’d worked with widows before, but I really, really got it when I walked myself and decided that I wanted to do more to help my widowed sisters. And there’s another story too. No, I’ll tell it to you. It was about…you know, this will take about a minute. Before my husband died, it was about a month before his passing, and he was a very spiritual man, and he said he had accomplished everything he was supposed to do in his lifetime, but I had not. And he said, “In fact, for you to accomplish your life purpose, I have to leave.” I said, “What the heck are you talking about? What’s my purpose supposed to be?” And he said, “I don’t know but you’ll figure it out.”
And he died. I was 60 at that point. Just, you know, right around, you know, the most common…you know, the median age that a wife becomes a widow is 59. So I had just passed my 60th birthday. And I continued to talk with him after his passing. I still talk with him occasionally. And I was sitting on this swing overlooking Lake Toni, and he came to me and said… And you’d have to know him. He was a very funny guy. He said, “I got it. I got the job.” And I said, “That’s great. What are you talking about?” He says, “I’m your chief guardian angel.” And he said, “But you need to know more.” He said, “As your chief guardian angel, I’m on this committee.” And he knew I understood the committee structure because I’d been a university professor, doctoral committees.
And he said, “There’s this committee, and God is the chair of the committee, and as your chief guardian angel, I’m a member of a committee, and there are other teachers and guides and mentors on this committee. Some of them you know already, some of them will be coming into your life in this year. We have one year to work with you. From the time my cancer was diagnosed in December of 2006, we’ve got until December of 2007. And you will know by December of 2007 what your life purpose is to be.” Right. Okay. Yeah. But I kid you not, by December, I knew I was to write a book. I didn’t have a clue how I was going to write this thing, but I knew I was to write the book and I was to work more with widows. So that’s the real backstory about how the work got started.
And I began…I took a little period of time, I stepped back. My clients were wonderful. Because I didn’t know if I’d be able to continue with the practice without Tom’s help. But my assistant stepped in. My clients said, “Take all the time you need, Kathleen.” There was a couple of months that I did step back a little bit. Work was important to me. And, like, I could go to work, I could do the financial planning work, and I understood that that made sense, but it was the times at night when nobody was there, when the house was empty. That was the difficult times. So my work helped my healing process. And helping other widows helped. So as I accepted new clients then, I only accepted women who were widowed or couples who were looking to that time ahead when there would be one of them remaining. And that practice had about…at its peak about 70 clients. I was the only planner. A paraplanner worked with me. And we handled it nicely.
And then when I made the decision that I wanted to do more speaking and teaching and writing and research about widows, I…in fact, it was Susan Bradley who gave this advice to me. She said, “You can’t go down both paths simultaneously. You can’t both have your practice and do this other work. It’ll kill you.” So I made the decision to go the speaking, teaching, writing. And then I had to figure out, “Okay, how do I close down my business? How do I sell my business?” It took me two years to figure that out.
Michael: Particularly when you have a boutique practice that’s evolved to be so specialized in working with pastors and widows.
Kathleen: I was just going to close the door and pulled it up but a number of my colleagues said, “No, you can’t do that. You’ve got wonderful, loyal clients who have been with you for years.” So we figured out a way. I had one potential buyer who approached me but it would have been totally wrong for my clients. So I said, “No. You know, thank you but no.” So I matched them up with other advisors who…at that time, I was…it used to be…it’s the Alliance of Financial Advisors. It was Cambridge years ago. And I was part of NAPFA, National Association of Personal Financial Advisors. I found one or two that I thought would be good matches for my clients. And I had clients that really, they were all over the country. So I matched them up and gave them those suggestions. And most of my clients did make the decision to go with that advisor. And they knew…like, at the beginning of the year, I told them that this is…the transition was going to happen and here’s how it was going to work. So they had that time.
And my paraplanner slid along with them. That means they would continue…the new planner used that paraplanner to make the relationship go better. And it just…it worked out great. There were very few that didn’t go with another advisor. And then those advisors paid me, it was like half of their fee for two years. So I got some monetary compensation for it. But I felt good knowing that they were in good hands.
Michael: Okay. So you essentially sort of slowly referred them out one at a time to advisors that you thought were a good fit, fellow advisors you knew in ACP, and they essentially paid you 50% of fees for 2 years as part of the transition.
Kathleen: We had a written agreement on it. So that worked out very, very well. In the meantime, then I’m ramping up, I’m doing more speaking, and a lot of the speaking that I did initially was just…like, there were advisor conferences, and then there were also workshops that I would do for widows, wives, and friends. And that might be hosted by a congregation or by a foundation. It was a hospice that hosted one.
And I didn’t charge anything when I was doing. I was giving it away because I wanted to help people. But then I realized, “Oh my gosh, I’m going to go broke on this because I’ve got expenses that are related to this.” And I said, “You know, I’ve got to figure out how to make this speaking a business.” So I went back to school myself, to the National Speakers Association, and there was a local chapter in the Tampa area. And every month, like for Saturday, on Saturday from about…well, it was actually before 8:00, it was like 7.30 in the morning until 6:00 at night, I was either in their monthly meeting or I was in what’s called the Speakers Academy, or I was in the mastermind group rubbing shoulders with professional speakers and learning about it.
And that’s how I learned to make a business out of it. How to get a sponsor that would trot me around and pay me a fee. And that really jettisoned. And the sponsor, I didn’t find…people have said, “Well, who’s your PR? Who gets you all lined up with this?” And I work differently. I don’t push my stuff out, I wait for people to come in. And they do. They ask me to come in.
So this life insurance company made contact with me and said they wanted me to come and talk with them. And they laid out the possibility. They wanted someone to do seminars, someone to create usable materials for advisors, like the three stages of widowhood. I wrote a booklet on that. I wrote a booklet on communicating with widows. They wanted a model seminar that they could do. In other words, there were a lot of things. But I made some videos for them. And they continue to use that. They wanted to co-brand my book, which that greatly helped the book. There’s now…with their co-branding plus the book itself… And by the way, the United States Army uses the book in their Survivor Outreach Service program. But there’s over 72,000 copies of this book in circulation. And that is part of Tom’s legacy. The book is real different. It’s 110 national and international boards by the way. It’s all in color, and you can open it up anyplace and start reading it. It’s a real different kind of a book.
Michael: And it’s…I mean, I know a lot of your work now is teaching advisors, but, like, this is not a book for advisors, like, this is a book we would give our widowed clients.
Kathleen: Yes. Yeah. I wrote it as a gift book that the advisor or pastor or estate planning attorney could give to a widow and say, you know, “Betty, I was really thinking about you. And I know this author. And you might find it useful. When the time is right, start by looking at the beautiful artwork, the paintings, and read the inspirational quotes. And then when the time is right, there are some activities that we can do together in here.” And it’s an open door for her, and it’s like he cares about her. He’s giving her something. And I’ve had lots of positive feedback. I’ve even got now advisors, somebody wrote to me and said she is giving them to her local funeral home that she has a good connection with. And her card is inside that. And then the funeral home passes it along to people who are coming in.
Michael: So for folks who are interested, you know, again, this is episode 106, so if you go to kitcs.com/106, we’ll have a link out to Kathleen’s book as well for those who are interested and want to check it out or, you know, maybe even are thinking of a particular widowed client that could use a copyright about that.
Kathleen: People said, “When are you writing your next book?” And I said, “Never.”
Michael: You’re good with the one you did?
Kathleen: Yes, that’s it. I independently published it. Initially, I went out and I tried to find a publisher, and they said, “Well, you know, we don’t really like the title,” or, “It’s not long enough.” And the books, I said, “Well, the title, I’ve taken it with focus groups, and yeah, that’s what the title is going to be.” “Well, the book is not long enough. There’s only 80 pages.” I said, “Well, I don’t want to overwhelm a widow.”
Michael: Like, “It’s a widow. They can only deal with so much here.”
Kathleen: “Oh, it’s going to be too expensive to print. It’s all in color.” “We’ll do it in black and white and we’ll spot-color here and there.” “No, it’s going to be in color.” So I finally said, “Okay, I’m going to just do this book myself.” So then I had to figure out whether to self-publish or independently publish. And I decided to independently publish. We can do a whole session just…in fact, I have done a whole session just on that topic. But we won’t go there now, Michael. I had to find the person to do the interior design. I used to think interior design, that’s what I do with my living room. No. In the book industry, that’s the way the book is laid out. The cover design, the printer itself up in Minneapolis, the editor in Pittsburgh, and then my book shepherd who is down in Austin. And we got it out, and the first…I was very hesitant. At first, I was going to do it for family and friends and my clients and that was it, but my book shepherd said, “This is a good book. It’s going to go.” She said, “Trust me.” So we did 1,500. Oh my gosh, with fear and trepidation. The next month the army bought about…
Michael: Because you’ve got to pay some printing costs out of pocket to get that going.
Kathleen: Yes. And in fact, the whole thing, I’d put, like, $20 grand in it, was going to be. And I said, “Man.” In fact, I was ready to pull the plug and my stepson said, “You know, dad wouldn’t want you to stop on this.” He said, “Just look at it as…just use part of his IRA money or whatever it is, you know, to do this.” So I did it. So then the army…within a month, the army ordered 1,000 of those copies. And I knew we were off and running. And it’s just kept on going. And I’ve had, since its success, I have had a commercial publisher come to me and offer to pick it up, that they would like to do it. And I said no.
Michael: Now they would. Yes. Publishers love books that are already selling well now that you don’t need them anymore.
Kathleen: No, thank you. And I get a lot of folks reaching out to me too. They want to help me sell more, get more clients. And that’s not what my goal is. Like, I swear, every week there’s two or three companies that they want to redo my website because it’s kind of a funky old-fashioned website. You know, not nice like yours is Michael. But I’m not trying to get more clients. Or they…somebody wrote this last week, they want to represent me. A speakers’ bureau, and they think that my topic is just great and they can get me in a lot more conferences. Well, I like to be out there speaking once or twice a month, but you, you speak all over the place Michael. It takes a lot of energy.
Michael: Oh, yeah, it’s tiring being on the road.
Kathleen: You get on the plane and you catch a cold with all that air circulating all around. So I don’t want to… And this topic about working with widows is, I’d sent you that little video that I made, which is also my website, Widows are Hot. No kidding, I spoke last year more on the topic of working with widows than I did the year before. This is my fifth year really about doing it. And I figured after a couple years, conferences, they get tired of it. But you know how it is. Like, what’s hot, what’s new, what’s different, what’s exciting. No. And that’s because of the growing number of widows. And as the baby boomer generation is aging out, more of the guys are dying, so we get more widows.
What Her Research Tells Us About Widows And Money [1:17:11]
Michael: So you said that a part of the work that you’re doing is research and that there’s not much research out there about intersections of widows and money. So can you share a little, like, what are you doing in the research space? What have you found so far? What are you working on from here? Like, you know, being a nerdy researcher-type myself I’m kind of fascinated by the research end of this. So what the gap is and what you’re finding.
Kathleen: And right now we’ve got a dynamite team. John Grable, who is with University of Georgia, is working with Carrie West, who is at Schreiner University, and Linda Leitz, who you probably know her, CFP. She’s teaching through University of Denver, I believe, right now. It’s one of the Colorado schools. And Laura Mattia, who is also a CFP. And she’s at University of South Florida.
And they’re working on a paper right now from a study that we did. We gathered the data a couple of years ago, and it was such a big study. There were, like…over 4,000 widows participated in this. And it’s survey research. The two studies we’ve done have been survey research because that’s the easiest way that we can get people to participate in these studies and to gather the data. And we just had a ton of stuff. And we got two major articles out of that for the “Journal of Financial Planning” and the Society of Financial Service Professionals. And these four that I just mentioned are now pulling other data together for the Financial Therapy Association. They’re most likely going to be presenting at that conference which is coming up in Austin in May. And then that journal has a refereed publication also. And they’re looking at resilience and measures of resilience in financial lifestyle.
But one of the biggest things that we found in the very first study that we did, which had about 1,100, and this was 3 years ago, we gathered this data, and the participants were members of the Modern Widows Club…the second one was the Modern Widows Club and Soaring Spirits International. These are the two largest nonprofit organizations that work with widowed individuals. And they also have local chapters. Which by the way is a great way for an advisor if they want to connect more with the widowed population, to check out to see if there is a local group. And Modern Widows club actually has…they’re called ambassadors, that sponsor some things with the groups. But the very first one we did was “Widows’ Voices: The Value of Financial Planning.” And that’s the one that I mentioned earlier, that I’m just looking at. Yeah, widows who worked with a financial professional are much more satisfied today with how they handle the finances. And the skilled financial planners, those using empathy and communication skills were almost twice as effective as the less skilled professionals.
One piece that was really, really very practical and I’ve received a lot of positive feedback from, we published this in the “NAPFA Journal,” “10 Questions to Ask Your Widowed Clients Who Re-Partner”. There are a number of widows who decide that they want to have a new relationship, either a committed relationship or get married again, and we found in that second study that those widows that had talked with their advisors about doing, like, pre-commitment documents, like updating and changing estate plans or wills or doing prenuptial kinds of agreements and who talked about money were faring better financially into that marriage or into that relationship that those women who chose not to discuss the finances. I had one gal who said, “Oh, it was just the travesty. You know, I didn’t want to talk about money because I figured it would soil the relationship. It would hurt our relationship.” Well, within a year’s time, she realized that he was using a lot of her money, and so that new relationship ended in divorce.
Michael: It’s an interesting situation to me that part of the challenge is, for couples that have had their financial lives together, like, most widows have only ever lived one financial life with one partner and all of the money dynamics that they had was just natural because that’s what they figured out as a couple over however many years or decades that they were together.
That I find, and granted, I don’t know, I have a lot of second-marriage clients over the years, but in my experience at least, like, there’s two different challenges that comes up. One is just a widow who repartners and suddenly discovers like, “Oh, the money dynamics with this spouse are different than how I used to do it with my first spouse.” And just, like, we’re literally not prepared to think about those financial issues differently because the first time they had to deal with these issues they were young and it was before they had any money. And so, like, they only ever had to make money decisions as they started earning money as a couple. So just the fact that someone else thinks about these things differently is a surprise. And for a lot of them, just, they come to the marriage with money. They didn’t come to their first marriage with money, but they have to come to their second marriage with money.
Kathleen: Yes, a whole different scenario. Yeah. So these questions came from the research from what women said it was important to know. And then I had also done some extensive interviewing with a number of the women who were part of the study. But you’ve got questions like, “Have you and your new partner discussed money issues yet? Who pays for what? Will you we have a joint credit checking account for shared expenses? Where will you live? Are you going to live together or separately?” And there are a number of those couples who are married but they don’t live together. One of the couples that I interviewed with, she said, “Oh, no, no, it just wouldn’t work out. It just wouldn’t work out at all. He’s just so messy and I’m very tidy. And he’s a Bach fan.”
Michael: Things you just accept about yourself by the time you’re getting to that stage of remarrying or repartnering?
Kathleen: And she said, “He’s a Bach fan.” She said, “I’m more of a Frank Sinatra gal.” And so she said, “We have a good time together. We go to plays together. We enjoy fine dining together. We go to concerts together. And sometimes he stays over for the weekend or I stay over his place for the weekend, but no, no, I would never live with him.” If you move from your current home, will you sell the property? If so, how will the proceeds be used? Oh, that was a good one. They were going to move in together with her. He was going to sell his house. And so she just expected that he was going to use the proceeds because her house needed some remodeling, some fixing up. No. Not at all. He was going to do other things with that money.
What are your new partner’s plans post or pre-retirement? Will investments be merged or held separately? And that’s a biggie. What if your new partner earns substantially less money than you or has fewer assets? Whoa, I had one couple, she said, “He has no idea what I’m worth, and I’m not going to tell him either because it would intimidate him.” She said, “He was a librarian all of his career. He worked for the state. He’s a good man.” She had rental properties in New York City, and she owned all kinds of things. So she said, “He knows kind of some things about my money, but I’m not going to tell him.” Because she said it would just make him feel bad. But she had thought that through.
Have you discussed health issues and potential costs? What financial responsibilities are you willing to take on for your partner’s children or aging parents? That’s a biggie. Have you talked about a prenuptial or cohabitation agreement? So I’ve had a lot of positive feedback from this article. And in fact, I just…at the Financial Transitionist Institute where I’m on the faculty there, we have a Widows Special Interest Track for people who are Certified Transitionist who are interested in doing more with widows or do a lot with widows already. We meet quarterly and share cases and materials we’ve developed. But I’ve had a lot of positive feedback from that group about this list of 10 questions.
Michael: Interesting. Interesting. And we’ll make sure we have a copy of it up as well for folks that are interested. Like, I find just this is an area, you know, for those of us who don’t specialize in this, don’t make it the full focus of our practice as you did, you know, like, it’s hard because the situations don’t come up that often, right? Like, only so many of my clients are going through widow grief stages at any particular time. And if you have a younger clientele, it’s very rare. If you’ve got an older clientele, at least it happens a little bit more often just as demographic ages take hold. But, like, it’s one of those situations where I always feel like I’m scrambling, like, trying to remember like, “What are the questions I should be bringing up right now? Like, what are the things that I should be trying to remember to deal with or prompt them to deal with?” Because we don’t deal with these things every day ourselves, so it’s not always fresh on top of mind.
Kathleen: Sure. Sure. And I’d mentioned, by the way, the Financial Transitionist Institute, that is a great place if somebody does want to get more in-depth training and information. I was asked several years ago to head up an effort to create a certified widows…you know, there’s a divorce planners association and a certification.
Michael: Yes, yes, the CDFA and the Institute for Divorce Financial Advisors.
Kathleen: I was asked to do something parallel along the line of widows, and Michael, I thought about it about 10 seconds and I said, “Nope, that’s going to be too much administrative you know what.” I like to do the fun stuff. I like to create tools. I like to teach. I like to mentor. But I don’t like to do that. So when Susan offered me the opportunity of folding under, like, the Transitionist Institute, that’s perfect because I can do my thing there, but that advanced training, to me, that’s the only place that advanced training is available.
Michael: Interesting. For advisors who maybe do want to go deeper and say like, “I actually do want to focus on this and figure out what it would look like to make this a specialization for me.”
Kathleen: Yeah. And advisors who do more with widows, it’s very gratifying, and those clients are…they stick with you forever when they really know that you’ve got their back and you understand them. And they send, not only are they happy clients but they send all their widow girlfriends to you. I mean, it’s a real win-win.
Michael: I mean, to me, this is sort of the essence of, like, what makes niches work and happens to be a particularly good and powerful one. Like, just lots of specialized needs and issues, you know, a deeper expertise. You really need to work with this type of clients. You know, it’s, right, anyone who’s just had a friend, family member, acquaintance who is widowed, especially sudden or unexpectedly widowed, like just, you want to help them. So helping them by saying like, “Call Kathleen. This is all she does. She specializes in this.” Like, it’s the easiest most natural referral that ever happens for someone that is in a moment of significant need will likely be changing advisors, since apparently 70% change advisors anyways. Like just, it’s…obviously, there’s a lot of helping reasons for why you go this route to working with clients like this, but just from the pure, like, business perspective, like, this is a really powerful niche for building business with people. Like, they have a need, it’s very referable, there’s lots of specialized skills you can have. All sorts of stuff is in transition, which means it’s an opportunity for forming new relationships with the new client.
Kathleen: And for most advisors who are working with a lot of widows right now, their phone is not ringing off the hook with what crazy stuff is going on with the market. They’re not saying, “Oh, oh my gosh, should I sell?” or, “Oh my gosh, the market is down, should I be buying more?” No, they know that you’re taking care of their stuff and everything is going to be okay. And when you do get together, they want to talk about their grandkids or…and you’ll get around. A lot of my meetings with ongoing widowed relationships, we would spend half the time talking about other sorts of things and like, “Oh well, I guess, you know, this was a financial planning meeting, I guess we better do a little bit of financial planning too.”
Michael: So I’m struck then that, for you as having this as essentially an encore career, like, I find for advisors, well, I guess for anyone, like, we see this with a lot of retired clients, there’s sort of two types of people that end out in encore careers. One are folks that retire from their current job or career, do that for a while, get home, get bored, decide they need something else to do and decide to go back to work somehow for an encore career. And then there’s a second set that, you know, they’re not retiring away from something and then land in an encore career, they’re retiring towards an encore career. Like, they know what it is that they want to do after they retire, as the advisor’s case, like, after you sell your firm. And that, you know, you were very much in the second category, it seems. Like, this was a calling for you that led you to sell your practice to do this instead.
Kathleen: Yes. Yes. And that sale, it was about the right time too because at that time I was 67. Yeah, that’s the time when many advisors might be thinking about retiring anyway. But I just knew, with, you know, the way that I tick that I was going to want to stay involved and do something that was making a difference in these women’s lives. And so it has evolved this way. Plus, it’s been fun. You know, on the financial side, I didn’t have to start drawing down my IRA account until 70 and a half. I still today, because I’m self-employed, I continue to contribute to my 401(k). So I got a drawdown on one side for the RMDs, and then on the other side, I put it back in with the solo. It’s a part of, as I mentioned before, of my late husband’s legacy and of my legacy. I get to travel to interesting places and somebody else pays the bills for it. I get to meet nice people.
Oh, one thing I haven’t told you yet. I don’t think we talked about before too. In August, end of August, I got remarried, Michael. And he had been…he’s a very smart retired nuclear engineer, and I’m older than he is too. So he’d been widowed for about 14 years and I was widowed for most coming up 12 years. We’ve been together for eight years. Most people thought we were married already. But I had said, “No, I’m never getting married again. Not getting married. And if I get married then I can’t be the widow lady. That’s going to hurt my brand.” Not really. No. But, like when I do my presentations, I’m talking about my partner, but then near the end of it I talk about love never dies and that widows will always…a widow will never get over the death of her husband. You learn to live with it. But you will always love that individual. And love never dies. But I get to love two men. I love my late husband and I love my new husband.
And then there’s a picture that was taken while we were exchanging vows. And I kid you not, Michael, I get a round of applause. It’s like, they come up afterwards and they say, “Oh, this is wonderful.” And one lady said, “It gives me hope that there’s…” She was widowed too. She said, “Maybe there’s somebody that is in my cycle, my future. And you’ve gone full cycle. And it’s a good thing.”
Michael: So is this, like, stage four after the first three? Or I guess it’s sort of an extension of stage three, right? It’s part of the transformation.
Kathleen: It’s part of that. Yeah. Yes, it’s like that new identity, new focus, new places to live, new opportunities, new friends. Yes, very, very nice. And also, something that I did in my own stage three was to set up the Moving Forward on Your Own Foundation. It’s within a community foundation. That’s the umbrella underneath it. It’s like a donor-advised fund. But I use proceeds from the book sales and my speaking and teaching. And it goes in there. And we’ve got…I’ve made $40 grand so far and there’s still $118,000 in there. And I make grants to other nonprofits that work with widows and children of widows to do good things. And that’s a feel good. You know, I get all this psychic income from these activities. Which is…I think that should be a big part of an encore career. An encore career is not just, “Well, I got a job.” Like the guy, I use Lyft when I travel around a lot, and I ask them their story, you know, “Well, are you a full-time driver, a part-time or how did you become..?” And he said, “Well, to tell you the truth, my wife said I had to get out of the house. I was driving her crazy.”
Michael: Yeah, I get a lot of rides from husbands who’ve been told they need to get out of the house and do something.
Michael: So what comes next for you?
Kathleen: I am trying to hold the clamp on of just one speaking engagement a month. I overdid it in the fall and then…I did. I had a bad cold for a long time. And my assistant said, “I told you, you shouldn’t have taken on that third presentation.” So just once. Maybe twice a month. I’m blogging for two sites that…I do this for fun. One is Sixty and Me. It’s an international site, and it’s for mature women. And I submitted one…in fact, I submitted one the other day. The one before that was, I Get to Love Two Men with the Blessings of Both. And I write several things for widows. Jonathan Clements with HumbleDollar blog. He asked me to start blogging. And so I wrote a piece for him. And I’m going to…the next piece I’m writing is going to be actually on encore careers. And I decided, “Well, I’m not going to submit it till after I talk with Michael,” because you make me…will make me think of some things that I can put into that piece.
And this is not a full-time job. It’s not. Because I’ve got other things. I mean, I like to do yoga. I walk four miles every day. Now, here in downtown St. Pete, we are likely to walk six or eight miles in a day. We bicycle. We’ve got social friends. My church is real…my congregation is real important to me. So this encore career is part-time. I’ve got good girlfriends that I do stuff with. You know, the Harvard study, read those things you got to do. Eat right and good relationships and purpose in life. And so it fits right in.
And if there’s some point that I just I’m done with it, all I do is just close the computer and I’m finished. I don’t have to go through a two-year process of selling my business. It’s fun with…some of the people that I meet at the conference say like, “Well, can I call you and just ask you about a few things?” And that’s part of the mentoring stuff. I don’t do consulting. Like some speakers use the speaking venue as a place to get clients to consult with and to do…I don’t do that. I’m not going to be…I will do some informal mentoring, but I’m not a coach.
Michael: So as we wrap up, this is a podcast about success, and one of the themes that always comes up is just the word “success” means different things to different people, sometimes different things to us in different stages of our own lives. And so as you’ve gone through this journey and I guess really reinvented yourself a few different times for you all the way back to, you know, the teaching phase and the professor phase and then the advisor phase and now the speaker and educator phase. So from your perspective now, how do you define success for yourself?
Kathleen: Making a difference in other people’s lives. Yeah, I would say that that’s the biggest for me. A positive difference.
Michael: And that’s what drove you, I guess, from doing this in the advisory firm to doing this as a writer and speaker as well? Just the opportunity for reach and impacting more lives?
Kathleen: Yes. And it’s worked out well for me. I love creating new things, and I love working for myself. For a while, when I was a college professor I had a boss, but most of my working life, it was working for myself. So working for myself is very fulfilling. And creating new things. My background originally was art, and so I like to think that things that I create are artsy too. So that’s personally fulfilling.
Michael: That’s the visualizations and the color art in the book?
Kathleen: And being able to explain things in a simple manner that can be understood without a lot of jargon and without a lot of lines on that PowerPoint slide.
Michael: Oh, I do love my bullet points, though. Well, thank you for joining us here on the “Financial Advisor Success” podcast and, you know, sharing that story and journey with us. You know, again, I think working with widows, while it’s a pretty powerful niche opportunity for advisors who really do want to focus and specialize in it and go and pursue some of that training to do it well, I think for most of us it’s a challenge because we know it’s a challenging situation and a high-stakes situation and very important to serve clients well, and not familiar ground for most of us because it doesn’t come up all that often if you’re not specializing and focusing in it. So hopefully this has been helpful for a few advisors as you’re going through these situations with clients of what to be thinking about and what to be trying to talk about and some resources to dig deeper if you want to dig deeper.
Kathleen: Yeah. And thank you so much for this opportunity to do this podcast with you, Michael. And you said you were going to make it easy, and you did. It just flows nicely and you just direct the little play. And it’s been fun.
Michael: My pleasure. Thank you for joining us here, Kathleen.
Kathleen: Thank you.