How to speak to my partner about money

How do you speak to your partner about money?

For most of us, having a financial adviser and talking to them throughout our lives is essential. But there is someone else it is just as vital to talk to about investing: your spouse or partner. Investing is the foundation of financial security, and it is vital that both partners are involved.

In this video, you'll learn why it is so important for couples to make financial decisions together, and how to start that conversation. Research by UBS found that while most affluent and high-net-worth couples in the United States share responsibility for financial decisions, investment decisions are still far more likely to be made by men. Even among younger couples, fewer than one in five women take the lead on investment decisions. Given that investing underpins long-term financial security, that imbalance matters.

Investment author and consultant Charley Ellis explains how couples can build a shared understanding of investing. His advice is refreshingly practical: both partners should read two or three serious books on investing (not the "get rich quick" titles), then sit down together for an unhurried conversation about what they really want to do with their money. He recommends starting with Burton Malkiel's "A Random Walk Down Wall Street" or his own "Winning the Loser's Game," and explains why, once you weigh up whether any manager can reliably beat the market after fees, most people are better served by low-cost indexing.

You'll also learn why talking as a couple helps you stick to an evidence-based plan when markets get volatile. The evidence suggests that when volatility strikes, men are more prone to react emotionally, while women tend to be better at staying the course. Making decisions together helps keep both partners on track.

The takeaway: talk to your adviser, but remember to talk to your partner as well. A shared, evidence-based plan that you both understand and believe in is one of the strongest foundations for lasting financial security.

Chapters / Key points

• Why talking to your partner about money is as important as talking to your adviser
• What UBS research reveals about how couples divide financial decisions
• Why so few women lead on investment decisions, even among younger couples
• Charley Ellis on how couples can learn about investing together
• Recommended reading to start the conversation
• Why the evidence points most people toward low-cost indexing
• How making decisions as a couple helps you stay the course in volatile markets

Transcript

How to speak to my partner about money

Robin Powell: Hello there. It's very important, for the vast majority of us, that we have a financial adviser, and that we talk to him or her throughout our lives. But there's someone else it's vital you talk to about investing: your spouse.

Research by UBS found that most affluent and high-net-worth couples in the United States share responsibility for financial decisions. However, certain decisions were more likely to be made by women, those about day-to-day finances or charitable donations, for example. Similarly, some decisions were far more likely to be made by men. Even among younger couples, fewer than one in five women decide about investments.

This is concerning. Investing is the foundation of financial security, and it's vital that both partners are involved. Investment author and consultant Charley Ellis says the priority is to discuss the benefits of a passive approach to investing.

Charley Ellis: A man talking to his wife, or a woman to her husband, and saying, here's what I'm trying to do and here's how I'm trying to do it. If they would both read two or three serious books on investing. Serious books. Not the ones that say "How to Shoot the Lights Out," "How to Make a Million," that sort of thing. But read serious books, and then have a serious conversation some quiet, leisurely Sunday afternoon, and see if they can come up with something they think is really worth doing. They might try Burton Malkiel's "A Random Walk Down Wall Street," or, if you don't mind my book, "Winning the Loser's Game," just to get started.

If you read those books and said, "Ok, let's assume for a minute that those books are reasonably realistic." Because both of us wrote the books trying to be helpful to other people. You would then find there's a very difficult set of questions that have to do with, "Can you actually find managers who will beat the market on a regular basis for the kind of fee that does get charged?" And I think that the answer for most people, it certainly is for me, is to turn to indexing.

Robin Powell: Of course, once you've made the decision to adopt an evidence-based investing plan, you need to stick to it, and talking together as a couple can help to keep you on track. In fact, the evidence shows that when market volatility strikes, men are more prone to give in to their emotions, while women are better at staying the course.

So, yes, talk to your adviser. But remember to talk to your spouse, as well.