The right team, working together: why clients benefit from legal and financial collaboration

Life rarely presents its challenges in neat, separate boxes.

The most significant financial decisions we make are seldom just about money. They often occur alongside heightened emotion and legal complexity – think divorce, the stress of challenging a Will, navigating a business succession, or receiving a compensation payout.

In these moments, people are often overwhelmed. They might see a lawyer to handle the legal side, and later, a financial adviser to sort out the money. But when these professionals work sequentially, or one after the other, it can leave clients exposed in ways neither profession intends. 

Adopting a collaborative practice approach can bridge that gap. By working together from the start, lawyers and financial advisers can ensure that a client’s legal rights and their long-term financial future are aligned.

Katie McDonald, a CERTIFIED FINANCIAL PLANNER® professional at Nexia Perth says collaborating with a lawyer significantly improved a client’s result.

“The collaboration process seems to always create a good outcome,” McDonald says.

“The benefit we bring is we have already worked with the client’s family in mind which is a different mindset for lawyers who only work for their client. Basically, we all sit around the table and work through the situation until both clients are happy.  Often within six to ten weeks you have a financial settlement.”

Sophie Atkinson, a CFP® professional at Visualise Wealth specialising in family law and wills and estates, says rather than treating financial advice as something that follows legal documentation, she is seeing financial advisers stepping into mediation rooms, estate planning discussions and restructuring conversations at the decision-making stage.

“Clients who are going through the rigours of a separation are overwhelmed. Many don’t understand their own balance sheet, let alone the financial implications of the options being discussed,” Atkinson says.

In one case, a woman in her 40s was determined to take half her former husband’s superannuation as part of the settlement. On the surface, it appeared fair, but after modelling preservation age rules and access restrictions, she realised she’d be unable to access those funds for years.

Instead, she negotiated a larger cash component, which meant she could purchase a property immediately and provide stability for her teenage children. The legal outcome was equitable, and the financial advice made it practical.

In another case, a 60-year-old woman had initially agreed to exclude her husband’s super from their property settlement, planning instead to borrow $500,000 to pay him out. Financial modelling revealed the strain that debt would place on her retirement, which forced her to change the strategy to instead use a portion of superannuation to fund the settlement, which avoided significant interest costs, and protected her retirement income.

These are life-shaping decisions, and Atkinson says while legal documents determine what happens, financial modelling determines whether it will actually work.

Antony Selby, a CERTIFIED FINANCIAL PLANNER professional at Financial Spectrum, says when lawyers and financial advisers are visibly communicating, it signals to the client that nobody is operating with incomplete information.

“That matters more than people realise. Mistakes happen more frequently when two pieces of technically correct advice aren’t joined up. These mistakes aren’t overly dramatic, but become visible during a family crisis,” Selby says.

A classic example is the interaction between a Will and superannuation. In Australia, superannuation doesn’t automatically form part of your estate, and Selby refers to cases where a carefully drafted Will left everything to the children from a first marriage but had a lapsed binding death benefit nomination. This meant that the superannuation was paid to a second spouse at the trustee’s discretion. The Will was legally sound, and the superannuation account was managed correctly, but without a joint review, the client’s final wishes weren’t followed through.

“The legal and financial documents were each technically fine in isolation, but no one was looking at the full picture at the same time,” Selby says.

Business succession is another area where the intersection between legal and financial advice is important. A solicitor might draft a bullet-proof shareholders’ agreement with a clear buy-sell clause triggered by death, but if a financial adviser hasn’t ensured there is an insurance policy to fund that purchase, the surviving business partner is left with a legal obligation to buy shares they can’t afford.

When different instincts create the best outcome

Lawyers and financial advisers are trained with different instincts. Lawyers are experts at mitigating risk and ensuring a document is enforceable. Financial advisers are skilled at modelling sustainability and opportunity for the future. When this is aligned, the client gets the best of both worlds.

Selby believes the key to a strong lawyer-financial adviser partnership is starting with the client’s values.

“I go into discussions with a solicitor and say, ‘Here is what the client is trying to achieve, and this is why it matters.’ That shared goal helps reduce friction between our professional instincts.”

He prepares by presenting the upside, and stress-testing downside scenarios. Importantly, this is a two-way street, because sometimes the legal risk requires a financial strategy to be revised, and vice-versa.

“The differing perspectives aren’t a problem to manage. They’re usually what produces a healthier outcome than either of us would have reached alone,” Selby says.

Where collaboration adds the most value

While almost any matter involving assets can benefit from integration, certain scenarios stand out:

• Divorce and mediation involving superannuation splits or property buyouts
• Estate planning where superannuation, trusts or business assets sit outside the Will
• Intergenerational wealth transfers, including loans from parents to adult children
• Business succession and shareholder restructures
• SMSFs holding illiquid assets
• Estate disputes involving complex asset structures

In each case, legal decisions and financial sustainability are inseparable. Too often, financial advice is sought after consent orders are drafted, estate documents signed or restructuring completed.

McDonald says conflicts over money is never results in a good outcome, and having both lawyers and financial advisers working together can help avoid added pain.

“It is a game changer,” McDonald says.

“When you are getting divorced and particularly when children are involved, using a team who work together for the family give the family a better outcome. Blended families also benefit from having a team work together for estate planning.”

Both Atkinson and Selby agree that collaboration between lawyer and financial adviser needs to happen at the earliest possible time. Atkinson says the earlier collaboration begins, the more choices remain available, and the more stable the outcome.

For financial advisers, collaborative practice offers an opportunity to work more strategically and meaningfully alongside legal peers. For lawyers, partnering with a financial planner can reduce litigation risk, accelerate settlement, clarify negotiations and prevent avoidable financial mistakes.

Ultimately, in the moments that shape the rest of a client’s life, an outcome that is ‘equitable’ isn’t enough. It must also be sustainable, and that is where collaboration makes the difference.