Sep
13
Women and Personal Finances
by Mary Teresa Fowler
"Between 70% and 80% of advisers are men, and many veterans have built careers serving a mostly male clientele."
In today's enlightened society, it is easy to forget that, once upon a time, women did not even have the right to cast a vote. Of course, the general consensus is that the modern woman has moved far beyond that point. No doubt, there is no disputing the shift in direction and change of attitude towards gender. Yet while women have advanced in every area, the system (and some in the system) have lagged behind the ladies.
Often women still face extra challenges compared to men in the same situation. That horrible truth is more likely to raise its ugly head in areas that were dominated previously by men. The area of personal finance needs some adjustment to find a balance that is fair to everyone. Keep in mind that most advisers are men and most of their clients have been men.
Women's retirement accounts have been shown to be much less than men's accounts and women have a longer life span. It is vital, therefore, that women feel comfortable with their adviser and confident about their course of action. The industry is changing and starting to understand that the system must accommodate both genders. Yet we have not reached that utopia in the world of personal finances.
Why Do Women Face Extra Challenges With Personal Finances?
1. Advisers Lose Sight Of The Client
Sometimes advisers see what is best for them - not for the client. A lady in her 60s might want to be conservative with her choices. Her 30-year old adviser may be a big risk taker. The adviser says to go with the risky option but that might not go very well for a client in retirement. The youthful adviser has years to recoup any losses but a 63-year old is in a different position. Savings can disappear quickly with the wrong investment.
On the other hand, the opposite scenario can prove true for a woman. Often she might want to take a risk but is warned against it. If the adviser thinks that there is a substantial risk, it makes sense to raise alarm bells. Yet sometimes an adviser makes the suggestion because he thinks that the risk is too great for a woman. Of course, the same individual might suggest the risky stock right off the top to a man.
2. Advisers Fail To Communicate
Generally, advisers want to sell and 'sell fast' and that approach works well with most male clients. Women investors prefer that they explain the process and show them how they can reach their goal. Obviously communication has to be central to a good adviser/client relationship. Yet often women do not feel that they are getting the whole story and advisers are just in a hurry to complete the deal.
3. Advisers Fail To See The Difference
Women have different needs than men - especially for retirement. Most likely, they earned less during their working life. The same retirement plan does not fit men and women. Yet often advisers have a 'one plan fits all' attitude.
Do You Think Women Face Extra Challenges With Personal Finances?