Did you cringe a little when you read that? You’re not alone.
Most women we know are reluctant to talk about money. It’s one of the reasons why even in this “woke” era women still earn 79¢ cents on the dollar, and why we typically have less in retirement savings than men.
Women face unique savings challenges, including living longer than men and having higher healthcare expenses. But a 2019 Nationwide Advisory Solutions study of over 1,000 financial advisors and more than 800 investors found that only about 6 in 10 women have a retirement plan, compared to about 3 out of 4 men.
Lexington Wealth Management (LWM) in Lexington, Massachusetts began an “Empower Women” program to “…offer a space for women to come together and feel supported by one another in a safe, judgment-free environment. “ LWM President and Co-Founder Kristine Porcaro explains, “Our mission is to empower women and girls from all walks of life to speak up, ask questions, and learn about how to manage money in a judgement-free, comfortable environment.” She said it’s important for women not to equate money with power. “We get our power from knowledge, and knowing how to handle money, not from the money itself,” she explained.
One Empower Women participant said, “This series is nothing short of amazing. I have gained so much knowledge in areas I never knew much about – nutrition, meditation, stress management, organizing my house, charitable donations, and the list goes on and on. The intimate setting and sharing of information among these women has become a cornerstone of my well-being.”
Women Have a Goal, Men Have a Number
Kristine says she finds men are more focused on the numbers and how much their investments can make. Women tend to talk more about the security money can give them or things they want to do. The money doesn’t have to hit a specific number, but it has to achieve a real life goal. For example, as she develops a financial plan, a woman will say she wants be able to help her parents as they age but have enough for herself also, or she wants to be able pay for child’s education.”
Women can be more conservative about money, which can prevent them from investing appropriately. But once they determine what they need and develop an appropriate plan, they tend to stick with it and make adjustments as life events happen, which ultimately generates better results. Kristine explains that men tend to focus mostly on the numbers and want to adjust or tweak investments, which can lower returns.
What Should We Do to Build Financial Security?
1. Find a financial advisor who understands your specific needs. Look for licensed, qualified company or individual who has a solid female client base, and understands your financial situation and can present proposals that make sense for you now, and as you move through your life.
2. Do a thorough background check on your advisor’s reputation. I’ll bet we’ve all read at least one newspaper article about a financial advisor who stole their clients’ life savings. So, before you sign on with an advisor – regardless of how highly friends or family recommend them – investigate their background. Here are two resources:
The Security and Exchange Commission investment advisor public disclosure page: https://www.adviserinfo.sec.gov/IAPD/Default.aspx
The Financial Industry Regulatory Authority’s BrokerCheck website: https://brokercheck.finra.org/