The Role of Financial Advisors in Collaborative Practice and Divorce Mediation

In our previous two posts, we discussed the value that both attorneys and mental health professionals bring to Mediation and Collaborative Practice (CP). We would be remiss if we did not also consider the important function that financial professionals play.

Financial advisors are almost always invited to be a formal part of the CP process, but are also increasingly being used in Mediation as well, though usually in an informal capacity.

Generally the financial professionals are not Mediators themselves, but rather function as part of the team, either formally or informally. Additionally, they may or may not be neutral parties, depending upon the circumstances.

Different Skill Sets

With the variety of skill sets that exist among financial professionals, there is no end to the types of services they can offer within CP and divorce Mediation. For example, a CPA might provide tax information, income statements, or asset growth projections.

New or Used?

Many couples going through divorce Mediation use their current tax accountant or financial advisor (or one that they plan to use post-divorce) in some capacity throughout the process.

This is not the usual approach in CP, however. In fact, there are some restrictions against this practice in certain cases, because neutrality is expected from the financial professional. But there is room within these limitations for the couple’s regular accountant or advisor to provide financial information (such as profit and loss for a business, or divorce-related calculations) to the advisor serving as a neutral party, who can then analyze, inform, and encourage the parties to come to their own conclusions.

Ancillary Financial Functions

At times, additional professionals may need to be pulled in for a specific purpose. Examples would be a real estate appraiser, pension analyst, or business valuator. Their function is usually very limited but still valuable.

When In Doubt, Hire a Professional

Some couples going through divorce Mediation question the need to bring other professionals onboard, especially if it means the cost goes up. It all depends on how you look at it, however. Divorce Mediators are generally not versed in financial, business valuation, or mental health matters, so they will take a lot longer to research and get enough background to provide accurate information. There are so many nuances in a field like taxation that it would be impossible for a Mediator to remain versed in all the latest tax law changes. You would actually save money and time by using a CPA in the first place.

Understand that bringing other professionals to the table is truly a better allocation of resources rather than an additional expense. After all, this is the rest of your life that you are negotiating.