Statistically speaking, men make money than women. A hot topic to be sure and one that needs to be addressed and solved sooner than later.
Obviously, advisors need to be mindful of that fact, but they shouldn’t assume that simply because a male client may a household’s primary breadwinner that he’s also in charge of household finances. The opposite appears to be true, meaning there’s another reason for advisors to put the time in when it comes to catering to female clients.
Even when excluding single women or those that live alone, data confirm that many women in shared households are either in charge of the finances or believe they are. Either way, this spells opportunity for advisors because the signs are clear. Women are taking more active roles in everything from daily budgeting to saving for education and home buying and retirement planning.
Times Are Changing, Advisors Need to Evolve, Too
It goes without saying that times are changing and advisors that have been in the business awhile have had front-row seats to many pivotal societal changes. More women than ever hold college degrees, advanced degrees and are participating in the workforce – many at high levels.
On a related note, a recent survey from Go Banking Rates indicates just 12% of women say their partner runs the household finances. That’s an unbelievably low level relative to what the percentage likely was in the 1950s or 1960s. It’s probably low compared to the 1990s.
“When asked how involved they are in household finances compared to their partners, about one in five women said they were single or the only adult in the household. Among those who aren’t, nearly 40% take the lead in their household’s financial decisions and another 30% make financial decisions together with their partner,” according to the survey.
As noted above female employment is at historical highs and there’s plenty of room to grow, confirming advisors need to know how to cater to working women – many of whom may be or eventually out-earn male partners.
“According to the Bureau of Labor Statistics, only about one in three women worked in 1950 — but even by 1980, it was still just over half. The female employment-to-population ratio didn’t reach 60% until 2000 and, according to the Center For American Progress, it’s more like 75% today — and they’re not surrendering control of the money they earn,” notes Go Bank Rates.
Advisors: Talk Up, Not Down
One of the worst things any advisor can do is talk down to and patronize any client. Unfortunately, it happens with female clients because the financial services industry – this scenario is improving – long conditioned the public (and advisors) to believe women were savers while men were investors.
“Women have been conditioned to prioritize frugality and saving, while men have been taught about the importance of investing and growing your wealth long term. But we are seeing a tide turn — with more women taking control of their finances, it’s obvious these conventional approaches are no longer sticking,” Lauren Bringle, an accredited financial advisor at Self Financial, told Go Banking Rates.
Fortunately, the investing “glass ceiling” is being shattered and scores of data and studies confirm female clients are demanding more investing education, they want more sophisticated financial advice and believe advisors are excellent sources for accomplishing those goals.
Related: Annuities Again Merit Attention