- Women face different financial challenges than men.
- Providing financial guidance to women means considering different strategies.
- Women have specific expectations in a financial professional relationship.
Financial advice is never one-size-fits-all. Helping a client meet their financial goals often means strategizing for each person’s unique needs and means. But did you know that your male and female clients have different financial challenges and have their own personal preferences in how they want to work with a financial professional?
Over the past few decades, women have taken a more prominent role in the workforce, are earning more college degrees than men1 — and more than half are the primary breadwinner for their family.2
Yet, because of many circumstances beyond their control, they are coming up short when it comes to preparing for financial longevity. Let’s take a look at some of the challenges women face and where you can help.
Women live longer – A woman’s life expectancy is 4.9 years longer than a man’s3. That means she needs a retirement strategy that will take her through more years and help her to cope with some of the potential life circumstances that come with longevity: widowhood and more health issues.
Women earn less – On average, women earn 80.7 cents for every dollar a man earns working a full-time job.4 That means she may have less money to save and put into a retirement plan. She needs her money to work harder with more aggressive, long-term investing, and outlets for passive income.
Women may be financially in the dark – A majority of women leave the family finances to their male partner,5 which means they may not know how their money is invested or if their retirement strategy will meet their unique needs. Women need to be invited to the table when financial meetings take place and have input into how strategies and investments are set up.
Women face divorce – Today’s marriages have a 50% chance of surviving.3 A split from a spouse can be financially devastating for a woman. Women need be able to work with and trust their financial professional to know where they stand in their individual finances and come up with an exit plan in the event of a split with a spouse.
Women are less likely to have an employer-sponsored 401(k) plan – Women often face career interruptions or work part-time jobs to handle caregiver duties for children or aging parents. That means they are less likely to be offered a 401(k) plan through full-time employment, at times due to women working part-time and employers not extending retirement benefits to part-timers.6 A female client needs you to help her strategize and make financial investments that are suitable to her needs.
How to work with female clients
Women have specific preferences when it comes to working with a financial professional. Let’s look at a few strategies to keep in mind.
Don’t Make It Women-Focused
While women have unique challenges when it comes to their finances, they don’t want guidance that explicitly calls out their gender.7 Women want to be treated as individuals with their own unique situations and may have different levels of financial literacy. Just like men, they have goals to get out of debt and ensure they don’t run out of money in retirement. They just may need a different strategy to get there.
Both men and women agree that that their top frustration is financial advisors who talk more than they listen.8 For women, this particularly strikes a nerve. They want to know that their concerns and needs are heard. Be aware too that most women drive 70-80% of purchasing decisions through influence.9 If they feel they are being ignored in a financial meeting, they have strong veto power and will take the family money elsewhere.9
Don’t Speak Down
Many women want to build a relationship with a financial professional who can educate and inform them without being condescending. Clearly, they don’t want a financial professional who stereotypes and assumes they don’t know anything about finance. Women want to build a trusting relationship with someone who understands their goals and concerns to help them work toward achieving the lifestyle they want both now and in future.
Women are looking for someone to help them strategize to meet their goals. They don’t want a pushy product salesperson. Women are also highly concerned with how their financial professional is paid. They don’t want to be taken for a ride and lean largely to fiduciaries, meaning they have a relationship of trust and their financial advisor is bound ethically to act in their client’s best interest.7
By taking a little time to get to know the challenges and preferences of women when it comes to financial planning, you’ll gain perspectives to help you earn and keep more female clients for the long run. And for women, that can be a very long time!
Download our infographic and use it as a conversation starter with your female clients.
Things to Consider:
- Be aware of women’s specific financial challenges and help create strategies for them.
- Be sure to invite women to the table when discussing family strategies and goals.
- Know how to and how not to talk to women about finances.
1 “Women in the Workforce,” Catalyst, June 2019
2 “More Than Half of Women are Primary Breadwinners,” Dallas Business Journal, December 2018
3 “Women Need to Take an Active Role in their Financial Lives,” CNBC, April 2018
4“ 6 Charts That Show the Glaring Gap Between Men and Women’s Salaries,” Business Insider, April 2019
5 “Own Your Worth,” UBS, 2018
6 “Here and Now: How Women Can Take Control of Their Retirement,” nonprofit Transamerica Center for Retirement Studies®, March 2018
7 “What Women Want in a Financial Advisor,” Forbes, May 2018
8 “Communicating the Connection Between Wealth + Health To Investors,” Luntz Global Partners, October 2018
9 “Top 10 Things Everyone Should Know About Women Consumers,” Bloomberg, January 2018