This article is part of Morningstar's 'Perspectives' series, which features contributions from third parties such as asset managers, academics and investment professionals.
Almost half (46%) of UK investors discuss finances with their partners less than once a month, 27% discuss finances a meager few times a year, and 16% say they only discuss it when they have to, according to a recent poll conducted for TD Direct Investing.
The research, which was conducted to gauge the attitudes and habits of investors across the globe, found that a quarter (23%) didn’t start discussing their finances until more than a year after their relationship began.
“The findings show there is a high percentage of couples that aren’t talking about their finances regularly. With financial issues in the UK being so prevalent, such as the pension crisis, it’s time everyone talked more about their money," said Stuart Welch, CEO at TD Direct Investing.
Do Your Financial Goals Align with Your Partner's?
“The research, also found that more than half (58%) of those polled say their financial goals align with their partners, which sounds like the perfect scenario – but unless you’re communicating regularly about money, how do you know you’re still working towards the same financial goal?" said Welch.
"There are so many changes constantly being announced regarding money – whether it’s pensions, mortgages, lending or the markets – so speaking regularly to ensure you’re still on the same page is essential,” he said.
Men vs. Women
Despite this gap in communication amongst couples in the UK, men and women seem to agree on financial responsibilities within the relationship. More than half (56%) of women vs. a third (35%) of men say that household budgeting is their own responsibility, with men more likely to say that it’s their partner’s responsibility (19% vs. 2%).
In addition, 70% of male investors see managing investments as their responsibility vs. just 36% of women. Men are also more likely to say they are responsible for retirement saving and planning (57% vs. 32%) and dealing with financial professionals (63% vs. 34%).
“The clear theme that has emerged is that men see it as their responsibility to look after ‘big money’ such as investments and pensions – and women tend to agree with them," said Welch. "But given that men are far more likely than women to describe their attitude to risk as high (16% vs. 5%) should couples be taking joint ownership for big money decisions, to make sure there’s a balance to the risks they take?
“The research certainly provides food for thought for couples – if they communicated more and combined their financial attitudes, it could help them to achieve healthy, balanced finances, incorporating both risk and caution, resulting in a more balanced and potentially, better-returning financial plan.”
TD Bank Group commissioned Environics Research Group to conduct an online custom survey to collect data for this poll. The poll includes responses from 2,014 men and women in Canada, 1,003 in the US and 1,006 in the United Kingdom. All respondents have investable assets and sole or shared responsibility of the household financial planning or investment decisions.
The original version of this article was issued by TD Direct Investing on February 13, 2013.
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