Women’s influence and impact on the world around us are growing each day, hitting some impressive milestones. Currently, women comprise 28% of the 119th Congress, the highest percentage in U.S. history, continuing an ongoing trend of sending more and more women from both parties to Washington D.C. Since winning the right to vote in 1920, women have shown up to vote, even outpacing men since 1980. Women are starting new businesses in increasing numbers and while the number of female entrepreneurs still is less than men, according to one study, 49% of new business owners were women. More women continue to graduate from college and grad school than men and are increasingly in leadership roles with 30% of Fortune 500 board members in 2022 being women.
Our financial influence is expected to continue to grow as women currently serve as the breadwinner or co-breadwinner in a majority of households. In addition, women are expected to inherit more than half of the $84 trillion expected to transfer from the baby boomer generation over the next two decades. Women also tend to have longer life expectancies than men.
This all sounds quite positive, but it’s important to note that women continue to face more challenges than men. Although the wage gap is narrowing among younger women, it still exists with women on average earning just 84 cents for every dollar earned by men. Even larger gaps are seen depending on race/ethnicity. Women also tend to spend fewer years in the workforce as they usually are the ones who will take time off to care for young children or aging parents. This can have long lasting effects on total career earnings and participation in retirement plans.
What Women Want
Overall, research has shown that, with regards to wealth, women want:
- To support their family
- Ability to pursue creative interests
- Independence
- Focus on Wellness
- Travel
- Volunteer and donate
A Woman’s Approach
When it comes to financial needs and investing, everyone seeks good performance, yet women tend to have more sophisticated needs and wants. Establishing and preserving family wealth is a top consideration for women due to longer life expectancies. Women also place high importance on leaving a legacy to children and planning for continued care, regardless of their marital situation, as they more often live out their final years without a partner. With a longer expected lifespan, record low proportion of younger women married, more commitment to careers and smaller families to support them, women tend to be concerned about outliving their investments. According to Lending Tree, fewer women rate their financial health positively, though only 42% of women have fallen into debt, compared to 57% of men.
This boils down to money being a big source of stress to us, yet women often don’t feel confident talking about it and therefore don’t enjoy talking about it. According to Merrill Lynch, 61% of women would rather talk about their own death than money. As a result, many women find that they don’t feel a real connection with their financial advisor, if they have one. Many advisors are used to catering to men and fail to take in to account the subtle but important differences between how men and women invest. Research has shown that 70% of recent widows will fire their financial advisor within a year for failure to connect with them. A New York Life study found that women don’t just fire advisors for poor performance, but 62% of them felt that their current advisor wasn’t addressing their unique investment needs and challenges.
How Women Build and Manage Wealth
So how do women build and manage their wealth? The good news is that it’s never too late. Start by taking the following steps.
- Get Organized: account aggregation tools like the My Ancora client portal can help you view all of your assets in one place for a more complete financial picture. Make sure you’re familiar with this and set a reminder to check back in regularly.
- Define your Goals: you may have a gut feel for what your financial goals are but getting them down on paper with specific details will help clarify your vision. An advisor or financial planner can often assist with this process and should revisit with you at least annually.
- Get Invested: work with an advisor to ensure your investment portfolio is customized according to your specific goals and that your needs are heard. There are often simple solutions available like breaking out separate accounts for different purposes.
- Plan for your Future: we cannot stress enough the importance of financial planning as part of your wealth strategy. A personalized financial plan that gets reviewed annually can uncover opportunities and grant you peace of mind.
- Build Your Team: finding advisors that you trust and connect with will help improve your outcomes. If you have a financial advisor already, don’t hesitate to ask to meet their financial planners and support staff. If you’re seeking an advisor, ask trusted peers for recommendations and use resources like FINRA’s BrokerCheck to help with your research.
Ancora’s Private Wealth team consists of advisors from a variety of backgrounds. We’d love to help you through these steps to feel more knowledgeable, confident and comfortable controlling your financial future.