Woman, 55, Walked Away From Her Divorce With $1.1M After Her Ex Handled Every Dollar For 26 Years. Now His Financial Advisor Keeps Calling

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A 55-year-old woman recently finalized her divorce after 26 years of marriage, walking away with $1.1 million in assets: $650,000 from her ex-husband's 401(k), a $300,000 brokerage account and $150,000 in cash.

Her ex handled the family's finances throughout the marriage. She has never had her own financial advisor.

Now, her ex-husband's advisor has called her three times since the settlement, urging her to keep the accounts with the firm and warning that moving the money elsewhere would be a "big mistake."

She's not sure whether that's sound advice or a conflict of interest.

The distinction could matter significantly. At 55, she could have decades of retirement decisions ahead of her, and she's now responsible for making them herself.

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Why Her Ex's Advisor May Not Be The Right Fit

An advisor who worked with the couple for years may know the family's financial history, but that doesn't necessarily mean the advisor is the right fit for her going forward.

The financial priorities that guided the couple during their marriage may be different from what she needs now. Her income needs, risk tolerance, investment preferences and desired level of involvement could all change after a divorce.

There's also a potential conflict to consider.

If the advisor or firm is compensated based on assets under management, keeping her $1.1 million could mean continuing to earn fees from those assets. That doesn't automatically make the advisor's recommendation inappropriate, but it gives her a reason to understand how the advisor and firm are compensated and what conflicts may exist.

The Securities and Exchange Commission's Form CRS is designed to help investors understand a firm's services, fees, compensation and conflicts of interest. She can review it before deciding whether to stay.

Most importantly, she doesn't have to make the decision simply because her former advisor says leaving would be a mistake.

Dividing a workplace retirement plan in a divorce can require a qualified domestic relations order, or QDRO, depending on the type of plan.

For retirement plans covered by federal ERISA rules, a QDRO can assign a portion of a participant's retirement benefits to a former spouse, who becomes an "alternate payee." The plan administrator must determine whether the order qualifies under the plan's rules.