Financial coaching during a divorce

by Tony Novak, MBA, MT, OnlineAdviser at Freedom Benefits updated 11/21/2011

Foundations of Coaching - Divorce is expensive and fundamentally a lose/lose proposition from a financial perspective. It is often emotional and stressful to the point of evoking poor financial decisions that create a drag for years after the divorce is finished. Many have witnessed examples of "war of the roses" type divorce where the participants later regret their actions of the moment. Yet each individual involved in a divorce may share the same basic goal - to get through the divorce with as little damage as possible and move powerfully forward into a new phase of life. Financial coaching starts by setting specific goals focused on managing the divorce process, holding down costs and achieving tangible benchmarks of financial security. Effective financial coaching minimizes the effects of divorce on the participants, children and family members and reduces the long term effects of "divorce hangover".

Expected Results - The best place to start the coaching process is to adapt specific goals focused on managing the divorce process, holding down costs and achieving tangible benchmarks of financial security. Note that these are the expected results of coaching - not the results of the divorce itself (this will evolve later). Every couple' s situation is different, so results are not predicable in advance. Based on casual observations, most couples can expect direct savings of at least $10,000 in divorce costs as a result of participation in the coaching process. Over the longer term, clients can expect to develop a trusting adviser relationship that enhances the return to financial prosperity.

Individual Coaching vs. Couples - Coaching both spouses together is most effective in minimizing the adverse consequences of a breakup early in the separation process. Over the long term, each individual should develop separate adviser relationships for an effective transition into a new phase of life. Financial coaching is available either as a couple or an individual and may switch form with the consent of both spouses. Special adviser disclosures apply when the adviser is working with both spouses.

Face-to-Face vs. Telephone Coaching - Results seem to be the same for face-to-face vs. telephone coaching due to the nature and focus of this type of work. The adviser will accommodate either option; the choice is always up to you.

Approaching your spouse - financial coaching during divorce is most effective when suggested by a marriage councilor who is already familiar with your situation, attitudes and general predisposition to the breakup process. This is usually an emotional time for both spouses. Financial coaching is only effective when the individuals can separate the emotional issues from the conversation about financial security. In situations where one spouse is open to peaceful resolution techniques and the other souse is not, immediate additional counseling is suggested.

Interaction with Legal Services - Financial coaching is not legal advice but is designed to advance the legal process of your divorce in the most effective manner. Coaching is designed to significantly reduces the amount of legal work as compared with a traditional divorce and will sometimes conflict with traditional legal methods of handling a marital breakup. The adviser' s commitment is that you understand the options available and the financial consequences of making those various choices during your divorce. The discussion will include options for mediation and collaborative legal procedures. The choice in selecting the course of action is always up to you.

Interaction with counseling and therapy - Financial coaching is not a substitute for professional therapy. Coaching will focus solely on what is best for your financial future. The adviser' s commitment is to separate the financial issues from the other issues and focus solely on achieving the best financial outcome. It is highly recommended that you continue to seek help from qualified counselors during the divorce process.

Cost - every divorce is different but the ideal benefits are typically achieved in about 10-12 sessions over the course of a year. Sessions might be face-to-face meetings or scheduled telephone conversations. Budget about $1000 for coaching over the year. Payment is made on an "as you go" basis and there is no obligation to continue for any specified amount of service.

Business Procedures - the adviser is a member of the Better Business Bureau and defers to BBB standards and procedures with regard to quality of business relationships and client dispute resolution. Your agreement to engage in financial coaching will preclude certain legal actions and recourse against the adviser. In addition, the adviser may require specific procedures when working with both spouses to ensure fair and open communications.

Confidentiality - The adviser is bound by strict standards of conduct regarding confidentiality and privacy. When dealing with both spouses, the adviser is required to disclosure that relationship and specifically define the scope of the coaching engagement in a manner that does not create a conflict of interest.

Getting Started - the earlier that the financial coaching process gets started, the better. It is OK to overlap financial coaching even while marital therapy continues. Individual or couples meeting is recommended as soon as one spouse envisions that the marriage may end.

Credentials of the Adviser - Tony Novak, MBA, MT, has over 20 years experience as an independent financial adviser, IRS-trained tax preparer, volunteer training as couples discussion leader, instructor in financial planning at Delaware Valley College, accredited instructor for continuing education for accountants, attorneys and financial advisers and one of eight advisers selected nationally by the publishers of "Financial Planning" as moderator of the largest online forum for financial advisers. His articles on personal financial planning are published in dozens of U.S. magazines and newspapers.

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Financial coaching during a divorce

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