Coutts & Co has joined the ranks of private banks seeking the business of clients encountering the turbulent emotional and financial upheavals of a marriage breakup.
“Having one person you can speak to about all your financial arrangements can relieve a lot of stress at a challenging time,” Coutts says, in one of its latest client information briefing notes.
Divorce among high net worth clients is dominated by big law firms which, apart from the legal work involved, frequently have teams to organise separating clients’ financial affairs.
The Coutts view is that while divorce can be a very delicate topic and difficult to discuss with a bank, it can mark “such an important change in your life that it’s vital to get your finances in order as efficiently as possible”.
It goes on, “That’s easier said than done as a break-up can involve thinking about things you haven’t had to consider for decades – or ever. You might need to move house, arrange a pension or think about paying school fees or other bills which your other half previously managed.”
Individuals may also come into some money as a result of the divorce and need to put that lump sum to work over the long term – into retirement and beyond, according to Coutts private banker Dennis Howard, who says “getting the basics right” can be the first step towards feeling confident about the future.
Even when a marriage ends amicably, separating two different pots of money and assets which have been entwined for years can be extremely difficult.
“There can be a lot to think about all at once after a divorce. It can effectively involve starting from scratch,” he says. “Every divorce is different and you won’t necessarily know what’s going to happen for some time. This can create a great deal of uncertainty.”
If an individual has the right level of support from their bank in a confidential environment “where you feel safe, you can start moving forward quickly. It can really help to have all your banking and wealth management services in one place to keep things straightforward.”
The Coutts note follows a recent survey by Kleinwort Hambros which found that more than a quarter of adults in relationships do not have any financial protection against divorce.
Paul Kearney, head of private banking for Kleinwort Hambros said: “Separating from a partner is always a life- changing situation and can be a very isolating experience.
“One of the most important issues to consider is the financial settlement, which involves navigating a complex set of decisions that will have serious implications for the future. It’s essential to seek support from a team of professional advisers who can help make informed choices.”