"The divorce itself is a business transaction. You’re dividing up assets, your cash and your house. The part that is hard to look at as a business transaction is if there are children involved. That becomes much more of an emotional piece. If you can look at it with two paths, one being the business part of it and the rest of it being the children, when there are children, it helps. You’ll be more focused on the children and what the needs are of the children rather than the material things that you may be getting or losing.” - Karen Bigman, The Divorcierge
In this episode we interview Karen Bigman, a divorce concierge and divorce coach. She shares her insights from the financial challenges she experienced after getting divorced. To learn more about Karen, you can visit her at thedivorcierge.com/.
This transcript has been edited for clarity.
Shawn: Today on the show I have Karen Bigman. She is a divorce concierge, and has some really great advice for you today. Karen, welcome to the show.
Karen: Thank you for having me.
Shawn: Let’s start with how you became a divorce concierge. If I remember correctly, you were married at the time. Is that right?
Karen: Yes, I was. I was indeed married at the time. My ex husband and I had decided that we were going to get divorced. It was an amicable and mutual decision, but it was still very emotionally difficult, although the process itself wasn’t that complicated. During that time, I ran into a friend of mine –a close friend –who was coming off also a very long marriage, just completing her divorce. We were at the bank and she was trying to open a checking account, which one would think would be a fairly simple task. It was so overwhelming for her that she had the banker on the phone with her, with her ex husband. I sat down with her and tried to calm her down and offered to help her. From there I went on to help her set up her online banking and other administrative processes. I realized that there was much more to getting a divorce than simply splitting your lives. More than just a piece of paper, it really was splitting up your lives in all ways.
I came up with this idea of creating a service that helps people both with emotional support and with the sort of administrative or logistical and tactical support of going through divorce. I named it the Divorcierge as a combination of divorce and being a concierge and helping people.
Shawn: I like that, the Divorcierge. So when is it most advantageous for someone to hire you if they’re thinking about divorce?
Karen: Well, I’ve been hired at all stages. In a perfect world, before you start the process of divorce, the best thing you can do is try to figure out where you’re headed, what are your goals, and what do you need to do. Often people go right to hiring an attorney. When you hire somebody such as myself, who can support you from the beginning, you learn about what options are out there for you. Hiring an attorney right off the bat is one option, certainly. But there are other divorce processes, and ways to get yourself organized so that when you do visit the different divorce professionals, you’re prepared. You’re in a situation where you were perhaps in the past always turning to your partner or your spouse for support, and now you don’t have that, someone like myself is there to help you bounce ideas off of. I would say ideally at the beginning when you’re just searching for information and really overwhelmed and not knowing what to do. Which is not to say that someone like myself can’t help you during the process as well.
Shawn: You mentioned getting organized, and you have something called the divorce action plan. What is that?
Karen: When you’re getting divorced –as I mentioned, my inspiration for my business and what I’ve seen, even the most successful executives is overwhelmed with emotion –getting organized is probably one of the hardest things to do. They call it the “divorce process.” It is a process, and having a plan, steps and action items and in a way someone to answer to, helps that process go more smoothly. When you’re going through divorce you feel like your life is out of control, and having a plan in front of you, helps you feel more in control.
Shawn: Got it. How do you guide someone into how they think about the divorce process? The way I think about it is I kind of think about it as a financial deal or business deal. How do you explain that process to someone who might be overwhelmed with emotions and all sorts of feelings at the time?
Karen: The key, and it’s easier said than done, is to separate the emotions from the tactical piece as best you can. The divorce itself is a business transaction. You’re dividing up assets, your cash and your house. The part that is hard to look at as a business transaction is if there are children involved. That becomes much more of an emotional piece. If you can look at it with two paths, one being the business part of it and the rest of it being the children, when there are children, it helps. You’ll be more focused on the children and what the needs are of the children rather than the material things that you may be getting or losing.
Shawn: One of the things that led you to become a coach, or concierge I should say, was helping your friend at the bank and opening that bank account. Did you end up having similar issues after the divorce was kind of said and done?
Karen: I had different challenges. I fancied myself somewhat savvy on not necessarily investing but understanding money. I managed the household finances, I was in charge of all the bill paying and all that. What I didn’t do a lot of was really manage my own money. We left it to wealth manager. When it was time to sign off on the divorce I felt it was best to find the persons to work with me. I was under the impression that it was all about a relationship, which of course it is. I was in search of financial advisor that I connected with. As I began my search I started to realize it was a much more complicated process. Of course you want to find somebody that you like and that you trust, but different financial advisors, different companies, have different goals in mind, work with you differently, have different fee structures. It was just so much more complex than walking to the bank and opening a bank account. It really was an education for me.
A lot of times, and I see this a lot with clients, I see this with women in particular, they kind of throw their hands up in the air and they’re very happy to give their money to someone who says “I’ll take care of it for you” and look the other way. They’re just thankful, “I trust this person.”, “They’re not going to steal from me. This is good” and that’s it. That is clearly the wrong way to look at things. I didn’t understand part of the intimidation is that it really is complicated.
Shawn: Let’s dig into this a little bit more. How did you just find the first potential financial advisors for you?
Karen: I started to just ask around. What was amazing to me is that you definitely need certifications, but a lot of people look at the big banks like the Morgan Stanleys, the JP Morgans, Chase, they feel like that must be where the right person is. For me, learning that the way larger institutions work is not necessarily in the best interest of the client. There’s the responsibilities that are different. I really started off by getting myself educated on the difference between big bank and a small one-off firm. It may be that one is better for one person, one is better for another. That was sort of the first piece of trying to go through the process.
Shawn: For someone who is going to find themselves in the same position, and I know a lot of people haven’t thought that there are differences between financial advisors. You said you educated yourself, what does that mean? Is that from conversations? Did you read any books in particular? Tell me about your education process.
Karen: It was a lot of talking to people. I was also starting to get into my business. I learned mostly with people who were working with a lot of divorced clients. That tended to be where I was sent. I learned, like you, there a lot of people that are certified in something called certified divorce financial analyst, which was a certification that began to become important to me at the time. I learned that someone that is good for your friend, isn’t necessarily someone that is good for you. Your friend’s financial goals might be different. The complexity of that person’s portfolio might be different. One person may have very diverse assets and another person may simply have a lot of cash and may need an income to live off of going forward. Everybody is different so it’s not enough to just find somebody you like.
You want to make sure that person is really explaining to you what’s going to be happening with your money and that you feel comfortable that you’re going to be able to survive for a long time to come on the income that you have coming in, based on your spending patterns. They’re going to help you go through and budget and explain it to you. Someone just taking your money and saying “don’t worry I got this,” you want to to know that but you also want to know what they’re doing. That was what was important to me, to have somebody that would really explain it to me.
Shawn: Let me just ask a basic financial literacy question. When you embarked on this process, did you know a lot about stocks, bonds, mutual funds and things like that, or did you kind of learn as you’ve gone along?
Karen: I knew what a stock was and what a bond was, and what a mutual fund was. I won’t tell you that I know that much more now. I’m not an investor, I do leave the investing to somebody else. What I do know is that when they’re going to make an investment, they let me know and I understand what they are investing in. It may be a very sophisticated tool and I don’t need to know the complexities, but they know that I’m looking over their shoulder and I think that’s what was really important to me. Nothing is guaranteed. No one can guarantee you will return. No one can guarantee an outcome in your divorce. No one can guarantee you will return on your portfolio. You want to know that someone that somebody is moving in an alignment with where you would like to go. I’ll give you an example. If you were somebody that loves risk and they’re investing in very risky investments, then that’s great. If you’re someone who needs a certain income and you need that income to last, risk is not a good thing for you. You want to work with somebody who is going to follow what works for you and what’s going to keep your money safe for the long term.
Shawn: That makes a lot of sense. So when you were going through your process, looking and interviewing different advisors, how did you ultimately stumble upon what was most important to you, in that potential advisor?
Karen: Eventually I found, ironically through my ex husband, someone who we both trusted in our opinion. They were somebody who had been very successful in their own right in the financial world and it was a woman. For me, I just felt like she could understand where I was coming from. That isn’t necessarily the case. She actually recommended a few firms. Her recommendation was more valuable to me because she didn’t have hidden trust in which way I went. She certainly didn’t know what kind of assets I had but she had a sense of what I might be looking for. From her recommendations I interviewed a couple of firms and I ended up going with a firm that I felt comfortable with, met the criteria, was listening to what I said, and was open to spending the time with me to explain things. I have the financial training in the sense that I have an MBA but I’m not by any means a sophisticated person when it comes to investing. To me I wanted to get it on the high level and I didn’t want anyone pulling the wool over my eyes. I felt very comfortable that this firm would do that. It is a smaller firm.
Shawn: One of the challenges too is if you pick an attorney for instance, there’s a lot of risk in picking that attorney. You are kind of stuck with them for a while, and you don’t always know if you got the right one or if someone else is a better fit. The firm that you ultimately chose, how do you know that it’s the right choice, and how would you guide someone and knowing that’s the right choice as the time goes on? It’s probably going to be a very long relationship with them.
Karen: First of all, as I would say, with an attorney it’s a hard process to move but if something is not right then you need to know that moving is the thing to do. It’s the same with a financial firm. Nothing is forever. If you don’t feel comfortable over time, then it’s up to you to make the choice to move on. I think more importantly what you need to do is be on top of it. They’re not perfect, there were definitely issues that came up, and had I not been looking things might have gotten slipped through the cracks. It wasn’t necessarily something underhanded, it was just certain administrative things that didn’t always work properly. It’s really important to keep your eye on the prize and to make sure that you have an ongoing relationship with this person and with your money. You don’t always have to have a financial advisor; some people choose to put their money in ESP’s electronic funds... I’m not sure what it stands for. Just putting their money in mutual funds or funds of funds and leaving them there and then you are just going with the market.
If you want something that’s a little more diverse and you go with the smaller firm, you need to keep your eyes on your money and you can check your statements, and you need to be in touch with the people that you’re working with. If there’s a point where you’re not comfortable, that’s the point where you start to think about moving. It doesn’t necessarily mean that your portfolio is losing money. Sometimes portfolios lose money, sometimes they make money. You do have to keep your eyes on things and you need to ask the questions. It could be that it’s not going in the direction you thought it could be going and that could be a perfectly valid reason. It could be that the market is not going the way we all thought it would go. These are very erratic things. It could also mean that you need to change strategies and if your advisor is not willing to work with you then that’s something that you might want to think about moving to a different advisor.
Shawn: It’s very clear that one of the biggest decisions you had to make was figuring out all of a sudden, what do I do with this money that I have and trying to get your post divorce financial picture in as good a shape as possible. Were there other big financial decisions you made outside of choosing a financial advisor?
Karen: The biggest one I made after a couple years was after I had been renting, I decided that I was going to by an apartment.
Shawn: A very basic question that I totally overlooked is where are you in the United States, for the reason that you are renting an apartment?
Karen: I live in New York City. Buying an apartment here… buying a home anywhere is not easy. In New York there’s different kinds of apartments and obviously a lot of different neighborhoods. I finally settled on a particular apartment and just the decision to actually buy something was quite big. I didn’t really realize it. I was going to the closing on the apartment and the mortgage banker was lined up, the broker was lined up, everything was lined up. Like a New Yorker I got into the subway platform and out of nowhere I burst into tears. I can still remember that moment. It’s New York so not too many people were looking at me but I felt very embarrassed, I started sobbing. By the time I got to the closing –and my broker is a lovely person, and she sat with me outside the room –I realized that of course spending an enormous amount of money on an apartment is scary, but more importantly I had been with my ex husband for 26 years and this was the first major decision that I made entirely on my own, and it was really overwhelming, and it was frightening, but it was also empowering. Money has all kinds of meanings. It’s not just the amount, there’s emotional attachments to it. One of the great things to come out of my divorce was that I could be that independent and I could make a decision which was a great decision for me, and the consequences were only positive.
Shawn: You said the decision was quite big but you didn’t realize it when it comes to the purchase of apartment. What does that mean? What did you not expect going into it? I want you talk about that a little bit further.
Karen: I guess I was afraid to make decisions by myself for many years. It wasn’t that I wasn’t allowed to, it was just that I had always turned to somebody and say, “what do you think”, and that’s one of the hard things about getting divorced or splitting up with somebody. You don’t have that person to turn to and so this was just the magnitude of the decision that I had nobody to ask for help with. It was just overwhelming both in the decision and the fact that it was a confidence booster. I never through I could. It was like “wow look at me. I can do this.” It gave me confidence to move forward and sort of the same in starting my business. I can do this. That’s a hard thing. It was an amicable divorce, it was a long marriage, and it’s hard to figure out how to navigate life by yourself.
Shawn: I think that’s very powerful. What is the best place for people to learn more about you? Also, I know we talked a lot about financial topics in this interview but what are some of the other areas that you talk about and discuss and deal with for people who are going through a divorce?
Karen: The biggest thing that I do at the beginning of the divorce process is help educate you on what the processes of divorce are, try to help you find the right process for you and your spouse, help you know which questions to ask of both your attorney, your financial advisor, help you find the right resources whether it’s a mental health professional or real estate broker, or a lawyer that deals with international issues. One of the things I make sure I do is keep up my pool of resources. In the tri-state area I do classes in conjunction of an organization called Family Kind on Co-parenting. You can look them up at familykind.org. I do an event called dating in a new world for my clients and for people who are on the other side of the divorce or the breakup, and are looking to get back out into the dating world. I also do one on one in the tri-state area or skype or FaceTime with anyone, anywhere in the world. You can sign up for a complimentary half hour consultation on the phone with me at my website: thedivorcierge.com. That’s the combination of the words divorce and concierge together.
One last thing I want to mention, particularly for women that are having a bit of a hard time understanding their finances or may be in a situation where they need some financial support, but they may no be able to pay for it. I do sit on the board of an organization that is nation wide called savvyladies.org. They offer a wide array of webinars on different financial topics, as well as free financial support from certified financial advisors. Those are all places that can support you and other organizations that I work with can support you as well.
Shawn: That’s excellent. Well Karen, thank you so much for coming on the show today.
Karen: Thank you so much for having me.
Thank you for listening to the Divorce and Your Money Show. Visit us at www.divorceandyourmoney.com for personalized coaching services and a full transcript of this episode. If you enjoyed the show, please take a moment to leave a review on iTunes, as it will help other people discover this free advice.