When spouses have different risk tolerances: recording it account by account
When two people in a household have different risk tolerances, a small RIA should record suitability for each person separately, link each account to its owner and the strategy it follows, and for joint accounts write down which view the strategy reflects and why both owners agreed. Review it at each annual meeting. One household risk score hides the difference and makes the record hard to defend later.
In the first meeting, one spouse says "we're comfortable with risk." The other says nothing, and later mentions they lost sleep in 2022. The firm records one household risk score, picks a growth model for everything, and moves on. Two years later the quieter spouse calls after a bad quarter, and the file says the household agreed to growth. It doesn't say who agreed.
Record each person, not just the household
| Item | For each person |
|---|---|
| Risk tolerance | Their own answer, in their own words where possible |
| Time horizon | Retirement dates can differ |
| Accounts they own | IRAs, individual accounts, their share of joint accounts |
| Strategy each account follows | Linked to that person's profile |
Joint accounts
- Record which strategy the account follows.
- Write down why: whose view it reflects, or the middle ground agreed.
- Note that both owners agreed, and the date.
- If only one owner was in the meeting, note it and confirm with the other.
A worked example
Take a hypothetical household of two. One spouse is comfortable with a growth model; the other prefers balanced. Each person's IRA follows their own profile. The joint brokerage account follows balanced, with a note that both agreed on 14 March after discussing the difference, and that the joint account funds near-term spending. At the next review both attend, and the note is updated with the new date.
What are the common gaps?
- One household risk score for two different people.
- Joint account strategy with no note of who agreed.
- Only one spouse ever in the meeting.
- Profiles never revisited after retirement or another big change.
When is this overkill?
If both people genuinely give the same answers and every account follows the same model, a single note that you checked both is enough.
How Advorra fits
Advorra keeps households with member-level suitability, links each account to its owner with the strategy it follows, and fills the IPS from that strategy, so different profiles in one household stay visible. See the product page, or read about structuring households and accounts and suitability reviews.
One thing to do this week: check whether your largest household has one risk profile or two.
An operations routine for documenting suitability, not investment advice.
Questions advisors ask
Should we use one risk score per household?
It's simpler, but it hides real differences. Recording each person's tolerance and linking accounts to their owner keeps the record accurate.
What about joint accounts?
Record which strategy the joint account follows, why, and that both owners agreed, with the date.
Do both spouses need to be in the review meeting?
For joint accounts it helps. If only one attends, note it and confirm changes with the other.
How often should this be revisited?
At each annual review, and whenever a life event changes either person's situation.
Is this investment advice?
No. It is an operations routine for documenting suitability.
See it on a demo firm
Advorra is practice software for independent RIAs: clients, models, IPS, billing and compliance records in one place, on top of the custodian you already use. Built by The CollabHub.
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