Women Have Women
have special financial needs that advisors overlook in two ways: 1) advisors
don’t always acknowledge the different planning needs women have and 2)
advisors don’t always communicate well with female clients – especially if the
client comes to a meeting with her husband. It’s very common for a male advisor
to spend much or most of the face time in meetings talking to the husband and
ignoring the wife. For these two reasons, women may be given the short end of
the stick when it comes to financial planning and investment management.
Women’s Financial Situation Differs From Men
1. Women typically earn less over their career lifetime
because they tend to take more unpaid leave – than men – to raise children or
care for family members (e.g. an aging parent).
2. Women typically earn less than men overall since they hold more jobs in
lower paying areas of the economy (e.g. retail and food service) and are less
well represented in management positions.
3. Women tend to earn less than men even if the job description and requirements
are the same.
4. Women live longer than men so they are more exposed to “longevity risk” (the
risk of outliving one’s assets).
5. As a result of living longer and taking more unpaid leave, women often have
less saved in 401k/403b/457 defined contribution accounts. These same women
also will have lower pension benefits because they’ve worked fewer years.
6. Women often marry older men and they often retire the same year as their
spouses. As a result, their Social Security benefit (based upon the highest 35
years of paid salary) often is lower.
A competent advisor will acknowledge these important
differences between men and women; he or she will craft financial planning
solutions that address the value of unpaid work and reduce the risk of women
outliving their assets. For example, a stay-at- home mother has real economic
value to her family and she should be insured at least until all her children
are 21. Why? Apart from the emotional loss, a stay-at-home mother’s premature
death means the family must pay someone to stay with children when they come
home from school, and to drive them to after-school events.
As far as the risk of outliving assets is concerned, this
is a more serious threat for women than men. If you visit a nursing home you
can’t help but notice that most of the residents are women. A good advisor will
address long-term care needs especially for all women – both
single and married.
Are Guilty Of Talking to Women Differently From Men
How can -- and how should --- advisors help women plan for
their special needs? Communicating with both male and female clients in a
balanced fashion is key, but it doesn’t always happen that way. Approximately
3/4 of financial advisors in the US are men, while at least half of the clients
are women. When talking to mixed gender couples, male advisors can end up
talking down to women, ignoring her concerns and communicating more with the
husband than the wife -- even when both husband and wife are fully present in a
meeting. If women feel excluded or ignored, so respond by showing less interest
in the discussion with an advisor. This creates a vicious circle. I admit I’m
making sweeping generalizations about many male advisors and I’m assuming that
more husbands handle financial decision-making than wives. That said, I
frequently hear complaints from women who become my clients for this very
A competent and helpful financial advisor (male or female)
will do the following:
both husband and wife in discussions, even if one party naturally shoulders
more of the financial decision-making in a relationship.
information so both men and women feel included and informed, even if one
person likes to go to a deeper level of detail.
the same level of time and attention to women clients as male clients, and pay
attention to varying levels of risk tolerance.
If you don’t feel like your advisor is listening to you
because you’re a woman, get a new advisor! Fee-only advisors can be found on
The National Association of Personal Financial Advisors www.napfa.org. The right advisor is available
for every potential client.
here for the roginal article from Tap Into.