Prudential Investment Managers

Prudential Investment Managers

February 2019

The Valentine’s Day guide to investing for couples

In any long-term relationship, you’ll have a mix of enjoying the present while looking forward to the future. As you grow old together – sharing a home, a family, and many happy memories – you’ll also want to build a financial future together. In the here-and-now, that means things like running a household budget. In the long term, however, that means investing together for big-ticket purchases and a rewarding life in retirement. So what should you look out for when you invest with your spouse?

For starters, it’s often a case of simply listening more. Listen to your spouse about their investment goals, risk appetite and time horizons. And listen to your financial adviser about the best ways of combining your (and your spouse’s) resources for the most promising returns.

Remember, all decisions related to your combined investments should be discussed. Fighting over money can escalate very quickly… so clear and regular communication is absolutely essential. It may also force you to ask some awkward questions at the start. For example: do you know how much your spouse earns? Don’t be embarrassed if you don’t; you’d be surprised how few people do!

During your conversations with your financial adviser, you’ll need to determine your risk tolerance – both as individuals and as a couple. This can be tricky if one of you is a conservative investor and the other prefers more risk… but don’t worry, your financial adviser should be able to help you find a middle ground.

For joint investments, it’s important for you and your partner to work towards a common goal. You’ll firstly need to agree on the following: 

  • Your combined investment goal
  • The rate of return you’ll need to be able to reach that goal
  • How much you should collectively invest each month
  • Your combined investment time horizon

Fortunately, our online Goal Calculator is a great way to help you determine exactly how much you and your partner should invest on a monthly basis in order to achieve your joint investment objectives.

If you started investing before you met your spouse and you’ve built up a long-standing relationship with a financial adviser grounded in trust, there’s no reason why you can’t keep your adviser once you’re married - both of you could have different financial advisers. The more information you gather from different advisers, the better. If this happens, just make sure you communicate well and ensure your partner attends your meetings to keep up to date with your financial situation. Try to schedule at least one annual meeting for both of you with each adviser to make sure that your collective goals are aligned and being met… even if you’re taking different investment routes to get there. Just be sure to avoid duplicating adviser fees. 

Choosing the right investment to achieve your goals can be a complicated business when you’re doing it as a couple. To help you with your decision-making process, try our Fund Selector Tool which we designed specifically to help investors find a suitable Prudential fund based on their risk appetite and investment time horizon.                                                                                                                                                      

For more information please speak to your financial adviser. Alternatively, feel free to contact our Client Services Team on 0860 105 775 or email us at query@prudential.co.za.

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