When someone gets married their financial picture changes. It is no longer income and expenses of one person but income and expenses of two people. Often people have differing investment objectives from their spouse and it is a process to come to an agreed upon financial plan while involving both parties. Is there a difference between the investment objectives and attitudes of married investors vs single investors? Does being married change investment concerns?
Married investors often have different portfolio objectives than their single counterparts. When asked about investment objectives, single investors are more likely to identify their portfolios primary objective as growth. Married investors most commonly identified primary portfolio objective is also growth, but only 39 percent identify their portfolio objectives that way, compared to 49 percent of single investors who have a growth focus to their investments. Married investors are slightly more likely to identify security as their primary portfolio objective.
Security as a primary portfolio objective often is accomplished through a more conservative investment risk tolerance. Married investors are more likely to identify themselves as moderate or conservative in risk tolerance, while single investors are more likely to feel they are aggressive or most aggressive. This may be because once you are married you have to worry about two individuals, rather than 1, and it is possible that the couple needs to manage to the individual in the relationship with a lower risk tolerance as a compromise.
Finding that compromise regarding investment philosophy and risk tolerance is often accomplished through working with a financial professional, something that nearly two-thirds (63 percent) of married investors do. This is in stark contrast to the half of single investors that use a financial professional to some extent. The usage of a financial professional does not impact their desire to be actively involved in the day-to-day management of investments however, as approximately half of both single and married investors like being actively involved in their investments.
Single investors are more likely to not use a financial advisor but manage their investments themselves. The length of time with their advisor is also different. Twenty-eight percent of single investors have been with their primary advisor for less than three years, in contrast to only 20 percent of married investors that have been with their advisor for less than three years.
Regardless if investors are married or not, investment objectives and portfolio allocations need to be a topic of discussion between advisors and clients. When investors become married, there may be changes that need to take place that a financial professional should address.