Menopause & Money 3: What the fiduciary is even going on?
How to know if your financial advisor is any good. Plus, do we need some sort of grown-ass woman rite of passage?
Fellow Empresses,
So, here we all are in the middle of peri/menopause with our bodies and brains in constant flux, being mercilessly yanked from one plane of the multiverse to the next, what with hot flashes, night sweats, mood swings, or suddenly itching all over your person from extreme dryness, and here I am, yet again, asking you to think about money… Believe me, I’d much rather be mixing you a WILE un-anger mocktail.
But when aren't we thinking about money these days? Between inflation and bank failures and diminishing 401K returns, it's no wonder the number one concern in the recent Empress Mindset Survey of over 3000 of you, was finance-related—specifically, medical bankruptcy. Money is on women's minds more than ever during midlife.
Because when it comes down to it, THE EMPRESS Menopause and Money series is really about understanding that money is not just money.
Money is about giving yourself choices and maintaining your power. And one of the ways of doing that is by building financial sovereignty and understanding that having a solid financial advisor on your team is a critical part of your own self-care.
Because here’s the thing of it, the reality is...
It’s time for us to own up. Not to sound too woo-woo, but I think we might need a serious rite of passage or ritual that enables us to step up into our power as grown-ass women owners. Remember, women are 80% more likely than men to spend retirement in poverty, so there’s no time like the present…
But first, what's a fiduciary? The word itself finds its origins in the Latin for “trust and faith”—meaning to act in good faith on behalf of another. According to the Consumer Financial Protection Bureau, a fiduciary is someone who manages money or property for someone else. When you are named a fiduciary, you are required by law to manage the person’s money and property for their benefit, not yours.
Why is this important? Because when you're working with a financial advisor, what you want most of all is someone who has a legal fiduciary responsibility to you. Someone who is acting in good faith on your behalf—not just making money off brokering transactions that may not necessarily be serving you. But what's the sign of a really good fiduciary and someone who is acting in good faith?
Recently, we came across a new book by a pair of Stanford labor economists, Myra Strober & Abby Davisson, who really brought home what it means to act in fully informed good faith when making big life decisions.
The book is called MONEY AND LOVE, and the main thrust of Strober & Davisson’s premise is that our thinking about love and money is fundamentally flawed because we compartmentalize the two when in fact they're inextricably bound. You can't make one decision without the other coming into play at some point in your life. So they've put together this rubric of 5Cs and it spans the entire arc of your adult life, from the time you meet the person who might be your person to the end of your life when you're caring for each other and/or for each other’s parents. And, as there are loads of big decisions to consider, you don't want to compartmentalize, you want to take them holistically through the 5Cs which are: 1) Clarify 2) Communicate 3) Choices 4) Check-in, and 5) Consequences.
I mapped these all out in a multiverse example of a life decision that I made decades ago in Paris that you can read about here. But for our purposes today, these same 5Cs are what any good fiduciary financial advisor should also be asking and exploring when making decisions on your behalf. Let's take them one at a time:
1)Clarify: When facing any significant financial/life decision, what we should do first, according to Strober & Davisson’s book, is Clarify the things we value most about our lives at this time.
At midlife, you may find yourself at a career pivot or you may find yourself wanting to work less. Alternatively, if your kids are grown and out the door, this may be the moment when you supercharge your career or make an entrepreneurial move. The important thing is to get clear on what you really want and what you truly value relative to your own personal and professional sweet spot. Your financial advisor needs to be fully aligned and in sync with your vision and your non-negotiables.
2)Communicate: When considering any significant financial/life move or change, you and your financial advisor need to communicate with the people most impacted by the decision. This may mean coworkers, bosses, mentors, partners, friends, family members, possibly your kids, and even your doctors if your insurance is changing.
3)Choices: Before you get too far down the road with any significant financial/life decision, you and your financial advisor need to investigate and consider the full range of choices available to you. There are always more options and alternatives available to us than we usually realize or see at first. A good fiduciary digs deep on your behalf to ensure that you've considered all the possible choices. This might take the form of different investment options or wealth-building strategies. The point is, this is the part where they do their homework, survey the entire 4D playing field, and look for moves neither of you might have seen until now.
4)Check-in: The next part is where your financial advisor checks in with trusted sources and people on the ground. This is where they go all Columbo… or better yet, Charlie Cale from Poker Face, and get curious, call bullshit, and ask around—again, to make sure you ultimately have all the data you need to make the most well-informed decision possible. This is what a good advisor does. If it's an investment, they make sure there's a there... there, and that the fundamentals are sound and pass the requisite stress tests.
5)Consequences: Lastly, any good fiduciary is going to stop before making a final decision and fully game out the consequences of the move so that if things go sideways, you both understand why and how best to respond in the aftermath.
So, all of this may sound simple, but actually finding a financial advisor, someone who is a fiduciary, who's acting in good faith on your behalf, and who only earns when you earn, someone who's willing to dispense with the sales pitch, and abide by this process is a tall order. Even if you DIY things, the 5Cs are still going to be critical to making better, more intentional money decisions.
It's the first step toward financial sovereignty and building generational wealth. Being able to say, “I'm the first woman in my lineage to be a millionaire and to establish a matrilineal legacy of solidity for my family,” is something that is profoundly powerful. And just remember, regardless of how in flux you feel right now from peri/menopause, the Empress Age is replete with abundance; there’s no reason this new era of your life can’t be your richest one.
Well, there you have it, this week's skinny on Menopause and Money from The Empress. You can buy the book MONEY AND LOVE directly on their site, which also features all kinds of events and continuing education.
Stay tuned for our next dispatch where we go deep on personal care and the best beauty hacks for the peri/menopausal set. You won't want to miss it. Until next time.
Yours in Grandeur,
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