Many women who did not manage household finances during marriage face significant financial challenges after divorce, according to new research from BMO. The study, titled "The Confidence Gap: From Uncertainty to Financial Clarity, The Journey to Rebuilding Wealth After Divorce," found that women in this situation often receive lower-than-expected divorce settlements and spend years rebuilding their financial confidence.
Michele Havens, Head of BMO U.S. Wealth Management, said, "Divorce is not only an emotionally traumatic experience, but it can also be a financially traumatic one, too. Women who were inactive in their household's finances during their marriage often feel unprepared and blindsided by the financial stressors that a divorce brings. A financial advisor can be a stabilizing force, helping women regain control, rebuild confidence, and chart a new path forward. With the right guidance, financial independence becomes not just possible, but empowering."
The survey revealed several key findings for respondents who let their spouse handle money management:
- 40% reported receiving lower-than-expected divorce settlements when their spouse managed pre-divorce finances. In comparison, only 9% of those who shared responsibilities and 10% of those who managed finances themselves reported similar outcomes.
- Only 36% felt confident managing finances during the divorce process compared to 64% during marriage.
- Among those who shared money management equally with their spouse during marriage, 68% said their financial confidence remained stable through the divorce.
- Post-divorce financial confidence was low for half of respondents whose spouse had handled finances; however, this figure rose to 90% among those who had shared these responsibilities.
- For many women (39%), it took more than a year after divorce to rebuild financial confidence.
Amy Hale, Executive Sponsor for Women & Wealth at BMO Wealth Management stated: "Financial confidence doesn't happen by accident; it's built through active participation. Women who take a hands-on role in managing their household finances are far better positioned to navigate life's transitions. Staying engaged in decisions around saving, investing, and planning isn't just smart, it's essential for long-term financial security."
Other findings include that while most respondents (92%) maintained separate retirement accounts from their spouses during marriage, only about one-third (32%) had separate investment accounts. Nearly half relied on referrals from family or friends when choosing a divorce attorney; almost nine out of ten found these attorneys helpful for future financial planning. Most also turned to personal networks when hiring a financial advisor.
BMO recommends assembling a team of experts—including attorneys and advisors—setting clear short-term and long-term goals post-divorce, closely tracking spending versus income for effective management, focusing on both savings and strategic investments for sustainable retirement planning, and maintaining a long-term outlook despite post-divorce challenges.
The research was conducted by Schmidt Market Research between March 10th and April 2nd of this year with 362 female adults aged 40–70 who divorced within the past five years. All participants had at least $1 million in investable assets.
BMO Financial Group is among North America's largest banks by assets—with $1.4 trillion as of July—and serves customers across Canada and the United States as well as select global markets.