The Big Business of Divorce
By: Brian A. Shactman | CNBC Reporter
Every year in the United States, there are one million divorces. In many respects, that’s two million people beginning life anew.
What’s more, about 67 percent of second marriages end in divorce, and the percentage is even worse for third marriages.
The need for everything — from lawyers to therapists to movers — is astounding. As morbid as it may sound, in the business world, that would be considered a big market.
“If you think about the bridal industry, it’s a $2 billion industry,” said Francine Baras, co-founder of Start Over Smart, an expo business that brings together services for the newly divorced. “No one has a number for the amount of money that is probably in the divorce industry.
“And not only is the market underserved, it has not actually been looked at as a niche."
Until now.
Businesses want to serve this consumer need, but do it without amplifying the label of “divorce”, which still carries a heavily negative connotation.
“We see divorce as a huge business,” said Start Over Smart’s other co-founder Nicole Baras. “We went into the expo business to help people, give them the support that they need.
“What ended up coming out of that is ‘wow’, this is a really big industry, and it's going to grow.”
The need for a lawyer is relatively obvious. But this business opportunity is far-reaching, even connecting to the insurance industry.
“In 1960, when you look at adults, it’s over 70 percent that were married,” said Jane Conti, Vice President at New York Life. “If you look at 2010 statistics, it's less than 50 percent, so more of their business is working with individuals who are divorced or who are separated.”
Estimates vary widely on how big the divorce business actually is. However, one thing is for sure: It’s in the billions.
And the recovery from the 2009 stock market lows has actually given the market a boost. For one, the dynamic has returned to dividing assets, as opposed to dividing debts.
In the divorce economy, assets divided range from yachts…to mansions…to cash.
And the same is true on Wall Street.
“There are many Wall Street people who are now divorcing because their investment accounts have come back again,” divorce lawyer David Mejias said. “Their bonuses are coming back. Their deferred compensation is coming back, and now they have assets they can split again."
-By CNBC’s Brian Shactman
@bshactman-CNBC's Linda Sittenfeld contributed to this report
