Women and Wealth Management: Why Women Need to Save Differently than Men
Women are a strong market for wealth managers’ attention. But only 52 percent feel confident in their investing ability. A 2017 study by Fidelity highlighted that women consistently earn higher returns than men and that women saved a higher percentage of their salary than men. This is a solid basis to develop further education and to present product opportunities.
In the past, the arena of wealth management has held a “for men, by men” attitude, and has not always reflected the needs of women investors — but this is beginning to change. A study conducted by Accenture found that 63% of women trust their advisors, showing that they are less satisfied than their male counterparts.
It is important to be mindful of the fact that despite progression in pay equality, women still earn less and reach their financial peak earlier. Women are outliving men and because of this, they have to save differently for their future. Many women are also taking career breaks to look after their children and this can set them back financially when they do choose to re-enter the workforce.
We have all read articles claiming that women invest too conservatively, don’t save enough, etc — then, a product or service is recommended to “correct” the issues.
Women don’t need to be corrected, but everyone needs guidance in these matters. This where a financial planner comes in. In order to build a relationship of trust, it is important to find a planner who respects where the person is and where they want to go, and who will take into account the different factors pertaining to women investors.
The investment strategy and gender issues aside, the below approach to successfully achieving financial independence is one that everyone should follow:
· Create a budget.
· Save a specific percentage of income each year.
· Build an emergency savings account.
· Ensure self and future earnings appropriately.
· Invest in a fashion that meets goals and risk tolerance.
Working with a financial advisor can greatly simplify the process. A first meeting with an advisor is where the person should set out their aims and put forward any concerns will then put those interests first in finding the right way to achieve those goals. A good advisor is dedicated, will inspire confidence and motivation, will have the wisdom to keep clients calm through the market fluctuations, and will shape a financial plan that meets their unique needs.
The financial services industry has produced many products and services specifically geared towards women. These include lower interest rates on loans for buying a home or car, going for higher education or setting up a business. It is certainly worthwhile investigating what is available in women-specific products when purchasing a product or service. There is a high probability of coming across a great deal or discount.
As the old adage goes; money is not everything. But it can certainly be a source of power. Women are beginning to step into their financial power and now is the time to start paving the way for future generations through education and encouraging important conversations. Our daughters, mothers, and sisters should not have the feel any kind of helplessness around money matters in 2021. Nor should our sons, brothers, and husbands be expected to carry the burden of stress in money matters.
