'Hidden epidemic': Advisers' role in addressing suspected financial abuse

Financial abuse is a “hidden epidemic” impacting one in six women and one in 13 men in Australia, according to Catherine Fitzpatrick, an adjunct associate professor at the University of New South Wales’ (UNSW) School of Social Sciences and social entrepreneur.

Speaking to ifa, Fitzpatrick explained that financial abuse occurs at almost the same rate as physical violence.

“It’s important to remember that coercive control like financial abuse can be a warning sign of physical danger, as it’s present in more than 90 per cent of domestic violence. That means safety is critical. A victim-survivor is best placed to decide how to manage the risks,” Fitzpatrick said.

“Advisers are not social workers or specialists in domestic abuse. But they can recognise the signs, respond with empathy, and invite the client to speak privately.”

Wealth Planning Partners’ Amanda Cassar strongly believes that advisers are well placed to recognise financial abuse, but early on discovered an uncomfortable truth - that many advisers aren’t picking up on the red flags associated with this epidemic.

Speaking to ifa, Cassar said many advisers she has spoken to claim never to have come across a case of financial abuse. She, however, warned that this does not indicate the problem does not exist.

Having recognised a knowledge gap, Cassar has attempted to bridge it by making her peers more aware of the existence of this significant problem.

From delving into the topic on podcasts to putting together a course for various online training platforms, Cassar has become a passionate advocate for raising awareness of the existence of financial abuse and the role advisers play in mitigating it.

In conversation with ifa, Cassar explained that a client’s behaviour during a meeting can be an important indicator that something is amiss.

“One of the main things is when you try and set appointments for a couple that one of them may not be included or invited or show up, or there's a dominant partner who wants to run everything,” she said.

“If the partner is invited into the meeting and you ask them direct questions, maybe the more dominant partner sort of talks over the top of them or doesn't allow them to respond, or belittles their responses.

“Sometimes it's as subtle as that.”

She shared details of an incident she encountered with a past client where the partner’s attempts to control her career as a means to exact control over her were more than evident.

“It can be when a partner limits another person's employment options or forbids them from certain career choices. Like, I had one lady who was in the media, and he said, ‘You've got to stop messing around with the media, go stack shelves at Woolies’. And she was an award-winning investigative journalist,” she said.

“So, forbidding them to better themselves through career advancement, withholding funds or just giving a very small allowance to the partner, not allowing them to purchase medication.

“If assets are being hidden from them, they come across bank account statements or assets you don't know about, it can be filing fraudulent insurance claims. Taking assets out of one person's name and putting them into another.”

Like Cassar, Lush Wealth’s Christine Lusher has been raising awareness about financial abuse via multiple channels including her social media profiles.

Just last week, she painted a picture of a seemingly perfect relationship on her LinkedIn profile, but a relationship that beneath the surface actually told the story of a trapped woman.

“A happy 30+ year marriage. Three successful adult children. On the inside: 'We've always kept our finances separate. He paid the mortgage and bills while I was off paid work raising the kids. I also worked full-time and contributed my wage to the family but never earned as much as he did. I had to withdraw my super to cover medical costs during my breast cancer treatment. Now, I’m trying to figure out how to retire, but Centrelink says they need to know about his assets, but he won’t share the details. I know he owns three investment properties and has super. I want to retire, but I don't have access to any money. What should I do?,” Lusher wrote.

"This is financial abuse. A seemingly happy marriage, but beneath the surface, a woman is trapped, unable to secure her own future. Financial abuse can happen to anyone, regardless of wealth or status,” she continued.

Speaking to ifa, Lusher explained that an uneven balance in controlling finances can be a sign of financial abuse.

“I guess, just making sure that both parties have access to the money that they need, that one side of the partnership is not needing to ask money to go to the hairdresser or do the basic sort of things that they need to do, that they both have access to their to their own money, or to be able to spend their money how they want to,” she said.

How to address it?

But recognising financial abuse as an adviser is different to knowing how to handle it, Cassar admitted, and said that a good place to start is reaching out to the at risk party for a one-on-one conversation.

“I think when a partner constantly diminishes or talks over a partner, maybe even phoning that person later, going look, you know, John was obviously running the conversation yesterday. You know, I'd still love to hear a little bit more about what you thought. I don't think I understood your point properly’. Or, you know, making sure you go back to that person to completely understand their views,” said Cassar.

“So they're sort of really, I guess, subtle things at the start, or requesting that I'd like to hear Louise speak for a minute. John, can you just shush? Depending on the relationship you've got with the client, that can be really difficult.”

Similarly, Lusher encouraged advisers suspecting financial abuse to reach out to the at risk person and make sure that they are actively involving them in financial decisions.

“I guess you can have a chat to them both individually, just to make sure that they both have access to the funds that they need. But yeah, everything needs to be, I guess, a joint decision,” she said.

“So it's just making sure that both parties are aware of their finances and what they can do, that you consult with both parties, that you involve them both in the decision making process.”

However, Lusher pointed to a key problem - couples in an abusive relationship are unlikely to seek financial advice for fear of discovery.

“But if there is a lot of financial abuse it's unlikely that that person, that the couple, is going to come and see a financial adviser, because we will likely call them out. So it's, yeah, unlikely that they would consult an adviser to begin with, and if they did, it would be maybe just one person coming to see them, and the other party's not involved. So it's pretty hard,” she said.

Lusher added that when clients come to an adviser after leaving a financially abusive relationship, a big part of the adviser’s job is to help teach the client how to properly manage their finances.

“It can be quite difficult too if someone has maybe never really controlled their own finances to sort of help them work out what they can afford so that they don't, you know, overspend or purchase a house that they can't afford, or go and buy a new car that maybe is not the best decision for them right then and there. Yeah, it is pretty much starting from scratch,” she said.

We encourage anyone suffering from financial abuse to contact 1800 RESPECT or the Centre for Women’s Economic Safety which runs free money clinics.