Women and Money: What Advisors Need to Understand
A U.S. Bank survey of female and male clients reveals differences advisors should know.
March 06, 2020 at 10:25 AM
4 minute read
Women in WealthThe original version of this story was published on Law.com
It's been almost 100 years since women got the right to vote in the U.S., where they now control 51% of the nation's private wealth, yet they feel less confident managing money and worry more about retirement and market downturns than men.
A study by U.S. Bank of 3,000 women and men across the U.S., split almost equally between the sexes, found that fewer women than men feel financially prepared (23% vs. 34%), consider themselves financially savvy (19% vs. 33%) or feel confident about their ability to manage their finances (47% vs. 61%).
Yet fewer women than men worry about making ends meet (16% vs. 22%) or struggle to pay their bills (12% vs. 19%), which suggests they may be more competent managing their money than they believe. The differences were even more pronounced between men and women under 35: 47% of women were worried about making ends meet compared with 56% of men, and 38% of women reported they struggle to pay their bills versus 53% of men.
The U.S. Bank study was based on an online survey of male and female investors with minimum investable assets of about $25,000, but 65% had investable assets of $100,000 to $1 million. Their ages ranged from under 35 to over 55, and 80% of them were over 35. They were all clients of the bank.
Women have a different relationship to life and to money than men, according to the survey. They value security and well-being more — 46% of women vs. 35% say this is what they enjoy most about money — and are more likely than men to worry about having enough saved for retirement — 49% vs. 32%. A little more than a third of all respondents — 39% of women and 36% of men — said they worried about a major market decline.
"Women are worriers," says Gunjan Kedia, vice chair of wealth management and investment services at U.S. Bank, who presented the findings of the survey at a luncheon earlier this week.
That's not surprising given that women live longer than men and get paid less than men, about 80 cents on the dollar, though the gap can be less for women and men doing the same job.
Women and Advisors
Despite those worries and confidence issues, fewer women use financial advisors than men when they are younger than 35 — 72% vs. 83% — but that comparison reverses when they are over 55: 72% use advisors vs. 63% of men, according to the U.S. Bank survey. These percentages are quite high and may reflect the fact that respondents to the survey were limited to the bank's clients.
The most popular reason both men and women didn't use a financial advisor was a belief that they could manage their finances themselves (33% of the women and 42% of the men cited this).
Would having more female advisors help women engage one? The survey tested the hypothesis that women would prefer a female advisor, but found that wasn't true.
"We didn't find women asking for women advisors," Kedia said. "Maybe they don't ask because there are few women advisors so it's not something they think they can demand."
The survey found instead that both women and men heavily weigh "confidence-based criteria" when choosing a financial advisor, such as academic degrees, experiences and how much the advisor appears to understand their life goals. Only men under 35 requested an advisor like them, a man under 35, Kedia said.
Asked about how the financial advisory industry could close the confidence gap between men and women, Kedia said advisors need to have eye contact with women when meeting them as part of a couple with their husband, use less investment jargon and avoid "mansplaining."
She suggested that advisors be "more human, less technical" when meeting with female clients. With that in mind, U.S. Bank's investment team is in the process of rewriting the way the bank communicates its investment theses and guidance, using training videos for advisors on these issues and encouraging advisors to meet one-on-one with female clients without men present.
Women want to talk about their kids and whether their husbands are taking too much risk with their investments, Kedia explained.
It all adds up to "an awareness issue" for advisors, Kedia said.
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllTrending Stories
- 1Weil Advances 18 to Partner, Largest Class Since 2021
- 2People and Purpose: AbbVie's GC on Leading With Impact and Inspiring Change
- 3Beef Between Two South Florida Law Firms Deepens With Suit Over Defamation
- 4Judge Skips Over Sanctions in Talc Bankruptcy: 'That’s A No'
- 5Hit by Mail Truck: Man Agrees to $1.85M Settlement for Spinal Injuries
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250