YOUR PRACTICE-Helping clients through divorce boosts business

Reuters

* Divorce financial planning certification broadens services

* Advisers say training lures loyal clients

* Some banks, wealth managers wary of liability

By Andrea Hopkins

TORONTO, Sept 30 (Reuters) - Faisal Karmali had been afinancial adviser for 10 years when he decided to add divorcefinancial planning to his toolkit. Since then, his practice hassurged, with new clients seeking advice at what may be the mostfinancially fraught time of their lives.

"I started off with a couple of existing clients goingthrough divorce, and now it is all new clients coming to me,"said Karmali, an adviser at Popowich Karmali Advisory Group inCalgary, Alberta.

Karmali completed the course work and exams for hisCertified Divorce Financial Analyst (CDFA) qualification in 2006after a few clients went through a "really bad" experience andhe decided to educate himself so that he could improve theservice he offered.

Seven years later, his firm gets steady referrals from otherprofessionals involved in divorce who need an expert on thefinancial side, and he said about 60 percent of his new clientstransfer their accounts to him after their divorce settlement,even when they had a previous adviser.

Going through a divorce is an emotional, high-need time, andgood financial advice from a professional will win loyalty. Withthe designation still relatively rare among financial advisers,the training can pay off for advisers who are prepared to go theextra mile when clients may be at their most vulnerable.

"The biggest financial impact on any person's life isseparation or divorce," said Debbie Hartzman, an adviser atProfessional Investments in Kingston, Ontario, and the woman whobrought the CDFA training course to Canada.

"It's the biggest single thing that is going to change yourprospective planning going forward. As a certified financialplanner, I realized how important this information was."

Hartzman reworked U.S.-based material aimed at financialplanners to cover Canadian property and family practices,training advisers in Canada on how to evaluate divorcesettlements, calculate budgets for spousal or child support, andanalyze how a settlement will play out over time.

While lawyers focus on the legalities of divorce, plannerswith training use software to evaluate settlements, includingtax implications and the economics behind the division ofassets, Hartzman said.

Lawyers are typically involved in a settlement, but theyoften don't know whether a lump sum is better than periodicpayments, or whether a lot of money over a short period isbetter than less money for longer. That's analysis that a CDFAcan provide.

"I've seen such terrible attempts at budgets by lawyers,"said Sharon Numerow, a CDFA at Alberta Divorce Finances inCalgary. "I decided it was a missing niche in the market. Therewas no one really to help people. Lawyers aren't equipped to doit, nor is it really their first love."

Which is not to say the legal world embraced the idea offinancial planners offering advice during a divorce. In theearly days of the Canadian designation, the Law Society ofOntario pursued Hartzman, accusing her of practicing law withouta license.

She eventually won them over, but Diana Shepherd, marketingdirector at the Institute for Divorce Financial Analysts, saidCanadian banks and wealth management firms still sometimes balkat their advisers using the CDFA in practice.

They worry about the liability of their advisers offeringwhat may seem like legal advice during divorce, and aboutadvisers winning access to more investible assets, and thus morecommissions or fees, because of a settlement they recommended.

But Shepherd said the CDFA prepares advisers for that,training them to have clear division between those clients theyare helping through a divorce and those who need investmentadvice.

Hartzman said experience has taught her to refer clients to colleagues for portfolio-management services during thoseperiods she is working on their divorces to avoid any conflictof interest.

"You can't act in your normal capacity if you are dealingwith someone who is going through separation and divorce," Hartzman said. "You can only do financial planning towards thegoal of separation, can't take any investible assets."

While adding the skill will likely bring in new clients,those who do a lot of divorce financial analysis warn that thework is as exhausting as it is rewarding.

Financial advisers typically empathize with their clientswhen they walk them through retirement planning and provide themwith financial advice. With divorce, more distance is neededbecause clients are already emotional.

"To deal with people going through divorce, it's almost likeestate work. Someone who has just lost somebody," Numerow said."If you are not prepared to deal with that side of somebody,there can be huge burnout."

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