A raised eyebrow is often a subtle but clear sign to investment specialist Andrew Varlamos that a seemingly happily retired couple is rowing about how their nest egg should be invested. 

Typically, it's the "overconfident" husband who is the self-appointed decision-maker-in-chief – who also often remains wilfully ignorant to the fact his spouse wholly disagrees with his SMSF strategy.

"What I've found interesting is that the female spouse will not contradict the male spouse directly, but look at me with a raised eyebrow, effectively saying 'that's not what we agreed at all, that's just my husband charging ahead to make those decisions'" says Varlamos, CEO of OpenInvest, an Australian company that connects individuals and asset managers.

Often it comes down to a question of confidence - or lack thereof. Ask a question and risk looking ignorant? Or keep quiet and let someone make a wrong decision for you?

Conversations about money are always a fraught topic - even more so in times of upheaval.
The timing of a recent study is interesting given it occurs during a period of unprecedented global market upheaval spurred by coronavirus.

Around 40 per cent of people say there is little collaboration on SMSF investment decision-making, according to an online poll of around 300 people by OpenInvest and Behavioural Finance Australia.

"The extent to which there is disagreement between trustees about how the SMSF should be invested and run can be masked in easier and happier times," Varlamos says.

"But when things are a lot more stressful then I think some of these innate and basic disagreements will come to the fore."

He isn't surprised that usually one party more than the other has a view they know what they're doing "they go full steam ahead, and often simply bring their spouse along with them."

"But you can see in that scenario that they're not going to be collaborative in a way that they both feel they're providing equal input."

Women at risk

A tendency for women to be financially disengaged – usually through no fault of their own – can hold broader implications.

Morningstar US's Christine Benz spoke with T. Rowe Price financial planner Judith Ward about a lag in retirement income saving among women, particularly those within the baby boomer demographic.

T. Rowe Price research finds that of those who had been retired for 11 years or more, 45 per cent of women were divorced or widowed, versus just 17 per cent of men.

"That means at some point, because statistically women outlive men, that they might be going solo," Ward says.

"And so, it's really important to be engaged with the finances and understand what's going to happen when one of us is a surviving spouse, and am I going to be OK."

Morningstar's Susan Dziubinski said something similar on International Women's Day in March this year. One of Morningstar's many articles coinciding with this event discusses the troubling picture painted by women's lower lifetime earnings and longer life expectancies.

But in addition to concerning statistics, the special report includes several articles outlining solutions to help address some of the problems.

Behavioural Finance Australia funder Simon Russell also outlines some ways forward for couples.

How to work together better

"None of them is rocket science, but each is easy to forget when you're focused on something else," Russell says of the following tips.

These include:

  1. Active listening
  2. Ask open questions.

The first point involves actively confirming your understanding as the conversation progresses.

"One way is to actively reflect back to someone what you think they've said," Russell says.

"I'm not talking about parroting back or repeating word-for word, but para-phrasing or restating what you've heard."

Using open questions refers to asking questions that require open-ended answers rather than simple 'yes' or 'no' responses.

Open questions may provide a greater window into your partners' thoughts that might otherways remain hidden in response to closed questions.

Less is more

Russell also makes the point, backed up by numerous studies into effective decision-making, that the value of adding additional information works on a sliding scale.

"Where you've got a complex decision to make, with lots of variables and uncertainty, there's a rapidly diminishing marginal return to using more and more information," Russell says.

"Eventually you get to a tipping point where these very unimportant things that we can become distracted by can actually make your decisions worse."

He suggests identifying a few key information sources as a good starting point for couples before delving into a discussion about substantial SMSF changes such as shifting their investment portfolio.

"That can create a sense of consistency, so that if one of us then goes back and argues that another has made a unilateral decision, you can point to that first decision that was made as a way to anchor those made later," Russell says.

Making long-term decisions that affect your income in retirement can be stressful enough for individuals, without potential arguments breaking out between the individuals involved.

Echoing the earlier point about the high incidence financial factors have in relationship disputes, Varlamos says these have both a dollar and a psychological value.

"The extent to which those stresses are reduced must in aggregate lead to a certain percentage of spousal breakdowns being avoided," he says.

"If better decisions are taken because people are making those decisions more collaboratively, even if it doesn't lead to a better return outcome…that's going to have a flow-on positive outcome.

"So, this stuff really matters."