Registered investment advisors should have been prioritizing establishing and nurturing relationships with female clients all along, but some of the reasons for that are becoming increasingly apparent and those extend well beyond women having longer life expectancies than men.
Indeed, women are increasingly educated – they make up a sizable majority of current college students in the U.S. – are making more money and are actively financial advice. Those are all positive points for advisors. There’s more and it comes in the form of how women are handling their personal finances.
A variety of data points and studies confirm that while women like the occasional retail indulgence, men are more given to lavish, impulse buys. Add to that, women are better savers than men. With those points in mind, it’s not surprising that women are making significant progress in terms of reducing personal debt.
Why It Matters to Advisors
GOBankingRates’ 2023 Women & Money Survey queried more than 1,000 women in the U.S. and found that a majority of them are debt-free – an impressive feat under any circumstances, let alone when considering women across all age groups have contended with student loan obligations.
“Nearly 58% of overall respondents said they did not have any student loan debt. As for credit cards, 43% said they didn’t have credit card debt and 15% of women have less that $500 in credit card debt,” according to the survey.
This is pertinent to advisors on multiple fronts. Obviously, regardless of gender, the less debt a client has to service, the more assets the client can deploy for investing purposes. On a related, note women that aren’t dealing with debt can better plan for retirement –something data confirm they’re grappling to do despite rosy debt outlooks.
“Nearly 17% of women surveyed by GOBankingRates said not starting to save for retirement sooner was one of their greatest financial regrets,” notes the survey.
With life expectancies increasing and the possibility of many women living well into their 90s, advisors should help female clients get on the ball when it comes to retirement planning. The earlier the better. Fortunately, advisors are likely to find a receptive audience.
Another Important Point for Advisors
Many younger clients, female and male, may not be excited about retirement planning, but they should be investing in some fashion. Surprisingly, women that have eliminated debt or didn’t incur much of it in the first place aren’t yet actively participating in financial markets.
“A whopping 56% of overall women surveyed by GOBankingRates said they were not actively investing,” notes the research firm.
That percentage is far too high and should signal to advisors an important point illustrated in other surveys. That being that women want to invest, grow their nest eggs and are seeking financial advice and education. Those encouraging signs for the advisory industry at large and it’s on advisors to capitalize on those points.