Divorce can be an emotional time in clients’ lives, but as their financial advisor, you can help them navigate key financial impacts of this life change so they can emerge optimistic about their future. 

“Divorce can directly impact a client’s financial well-being, and they need someone they trust to lean on during this often-complicated process,” says Lynne Knox, private wealth advisor at Capital Group’s Private Client Services. 

While attorneys navigate the legal process of divorce, financial advisors can play a key role in helping clients think through the financial consequences of the choices they make when ending their marriages. Here are ways divorce planning can add depth to your practice.

Consider becoming a certified divorce planner

According to research conducted for Capital Group’s Pathways to Growth: Advisor Benchmark Study, the highest growth advisors offered a broader range of services tied to the long-term goals of clients and their families — including charitable planning, retirement planning and generational wealth transfer. Specializing in divorce financial planning could be another way for you to broaden your value to clients. 

To help boost your skills and market your capabilities, consider becoming a Certified Divorce Financial Analyst (CDFA), a designation that can show clients you have a higher degree of skill in financial and accounting issues that frequently occur during divorce negotiations. 

Strengthen and enlarge center-of-influence (COI) networks

Having a CDFA credential could also help you stand out among peers and capture the attention of COIs already working with clients in divorce.

Consider the types of professionals a client might work with in legal and financial circles, such as divorce attorneys, mortgage brokers, real estate agents and forensic accountants. But you should also look to adjacent and wider circles of specialists who help families navigate divorce, such as marriage and family therapists or private investigators.

Working with these specialists can help you provide holistic service that builds loyalty and results in referrals. You may even consider further cultivating your COI network by planning regular meetings with them to discuss how each of you can help a particular client. For example, Knox created an advisory board 12 years ago, and the group still meets quarterly.

“When someone goes through a divorce, they start over completely,” she says. “So you want that client to be surrounded by all the expertise they need to rebuild their financial life. You, as their financial advisor, are the best person to bring everyone together.” Strong relationships with those in COI networks, she adds, could also expand your referral pipeline — a vital source of growth for your practice.

Lean into the “advisor” in financial advisor

Financial advisors can often find themselves in a therapist’s role with clients, but Knox says divorcing clients often require even more patience and empathy. “They all come to you when they’re in pain, so the most important thing is establishing trust and acknowledging what they are feeling,” she says. “You want to have them focus on 12 or 18 months down the road, when they won’t feel this way. And I tell them, ‘I know, because I’ve done this with clients hundreds of times. We will get you there.’

Clients are often in fragile states when they seek her help, Knox adds, and it’s not enough to lay out financial advice in black-and-white terms. “Clients often feel betrayed by the ones they trusted the most,” she says. “They may not appreciate being told what to do, even if it makes sense for their interests.”

Knox says she uses a technique called appreciative inquiry to help guide client conversations, especially at the start of the relationship. This form of communication emphasizes “positive” idea generation over “negative” problem identification.

“I ask questions in a way that they arrive at the answer for themselves. If you tell them what to do, they may believe you, but they won’t care,” she says. “But if you ask a different way, like, ‘What will happen if you spend your money on this? And then when the time comes, you have to sacrifice this? Will there be regret?’ Let them answer it. And then they also feel in control.”

Establishing trust can be especially important, since even simpler, no-fault divorces can take as long as 18 months to complete. As the process unfolds, you can help clients evaluate the resources they will need to fund their post-divorce life. Many advisors use wealth strategy analyses to show how different sets of client assets may grow over time and across economic cycles.

“You want to help clients understand their financial picture more clearly, so that they’re being set up for success after a divorce,” says Leah Ryan, advisor practice management consultant at Capital Group. “The family law attorneys sometimes do not zero in on aspects such as tax repercussions or liquidity of assets and this could be detrimental to the client’s financial future.”

Connect with more women

Women are generally underserved in the financial services industry, and one way to build relationships with women clients can be through divorce planning.¹  About 70% of divorces in the United States are filed by women, and they often need financial advice.² And in grey divorce — marriage breakups among those aged 50 and older — women’s income fell by 41%, almost twice the decline that men experienced.³

Chevonne Farler, an advisor at TBH Advisors in Brentwood, Tennessee, an RIA with about $1 billion in assets under management, says she watched her mother struggle following the divorce from her father. That experience motivated her interest in becoming a financial advisor and specializing in divorce. “It was such a traumatic time period, and I never want people to feel the way she felt or the way that I felt not knowing how money works,” she says.

Once the ink is dry on a divorce agreement, that client relationship can evolve to focus on helping them make their new financial foundation stronger. Knox, for example, worked with a life coach to organize a three-week session called “Women, Money, Sex and Power” for women clients coming out of divorce. 

Knox says about 80% of her practice is helping women through divorce, and it’s rewarding and motivating work. “You really can change the quality of someone’s life by making them feel more financially secure,” she adds. “I find it extremely rewarding when I see clients concentrating on their passions instead of their fears.”

¹”Bridge the female investing gap,” Goldman Sachs Asset Management, March 2023.

²”Revealing divorce statistics in 2023,” Forbes Advisor, August 2023.

³”The economic consequences of gray divorce for women and men,” National Library of Medicine, December 2021.