This is a story that was recently published in a financial planning industry magazine and is typical, unfortunately of the type of problems that are often referred to a financial planner for assistance.Tanya was an investigative journalist back in the day and has run her own businesses. When she met and fell in love with the man who would become her husband, she was quite well off. She had a successful business, property and cash in the bank.
At the end of the relationship, there was nothing left in her own name. All had been transferred into a company and trust of which he was the director and signatory of. She remained just a shareholder, so all decisions could be made without consultation.
The belittling had by then been going on for years. She was told she was bad with money, and obviously, she thought it was true.
Everything she had was no more. All her decisions were wrong. He was right. The emotional abuse was there too, alive and well.
Friends and family hardly recognised the frail shell that eventually did leave the relationship, the one she’d been told that she’d never be brave enough to do. The relationship by then was 12 years old, and Tanya had wanted out for the last six.
Her health was broken; she had a stroke and a series of seizures brought on by the stress, and she was financially at ground zero and emotionally bankrupt. But she had a good reason to soldier on - her daughter.
Onlookers may make comments like ‘She should have gotten out earlier.’ ‘Why would you stay with a guy like that?’ ‘What was keeping her there?’ ‘Why did it take so long?’ And I guess unless we’re there ourselves, we’ll never really, truly know.
So, to ask the question everybody seems to want the answer to... why did you stay?
“It was the frog in the pot scenario. If you throw a frog into boiling water it jumps out, but if you put it in warm water and slowly turn up the heat it will be boiled alive before it even knows it,” Tanya said.
“I was isolated by the time I realised I needed to get out, cut off from my family and my friends, I felt there was no out. But then one day, I realised I couldn’t risk being a bad role model for my daughter any longer. I wanted her to know that she could get out, should the cycle repeat, and that she could have an amazing life in doing so.”
One day, Tanya’s husband gave her an ultimatum: stop “playing around with the media” and get a job in a supermarket.
“When my daughter heard this, she burst into tears and said ‘that’s not you mummy’,” Tanya recounted.
“In that moment, I realised I’d failed her and we had to go.”
And how did you finally manage to get out?
“I started putting $20 per week onto a grocery card so that we’d have funds to last us for food once we’d gone. I managed to have three months saved when we left and had squirrelled things away with a close friend,” she said.
“The timing had to be right too. It’s not an easy thing. If I had advice for anyone looking to move on from an emotionally and financially abusive relationship is that, if possible, put aside whatever you can to tide you over for when you’re out. That may not work for everyone, but it sure made a huge difference to me.”
It took a lot of time and the rebuilding is ongoing, of Tanya’s health and finances. She’s used all of her experience in media and small business to build a success business today and her personal and business growth continues.
The role of a financial adviser
As a financial adviser, it is rare to come across a client that is being financially abused. But it does happen.
Some signs we see is the closure of accounts or paperwork going missing; often the client becomes agitated and confused about the state of their affairs.
Sometimes, the abuse can escalate to fraud and lead to police prosecution if the Power of Attorney is not acting in the best interests of those they’re acting on behalf of. This is already widespread and rarely reported due to shame and embarrassment.
We believe clients should always be advised to nominate two people to jointly act as Power of Attorney - if two are signing, it’s harder for one to go rogue.
For younger people, unfortunately, women are more often the victim of financial abuse, particularly if they are in a relationship with a controlling partner.
Deleting friends and family from their phone contacts; limiting or refusing them contact with loved ones; taking earnings; doling out limited spending money; requiring receipts and not allowing the purchase of personal items like shoes and clothing or discretionary items like hair, nails, grooming and so on are all red flags.
It’s an unfortunate reality, but financial abuse - in all forms - is on the rise.
Advisers can have an important role to play in combating financial abuse, and advice practices do look to report where they are concerned.
Clients who know others that you feel may need help, can look to refer those parties to a planner and we may be able to be the rock that your friends need to right any wrongs.
Disclaimer: Please note that these are recollections and a story from a magazine, but is typical of what is happening, possibly right under your nose with a friend.