Most financial planners are men, so it doesn’t come as a surprise that financial plans are built around men. A woman’s needs are a little different.
Women live longer than men
This is wonderful. Unfortunately longevity comes at a cost – housing, insurance, care and medical costs all add up. Research shows women typically tend to underestimate these costs – both relative to men and actual requirements (I suppose no one has ever heard of ‘women flu’).
So, at some stage a woman is likely to have sole responsibility for financial decisions. This is typically at a time of loss – not a good time to have the added anxiety of financial insecurity. By participating in long term financial decisions and gaining experience earlier on, you can feel much more confident and capable of caring for yourself when the time comes.
Women earn less than men
We are making progress but a woman is still likely to be paid less than a man to do the same role (grrr).
Many women also take time off work – to be a mum. Emotionally rewarding but very poor rating on the financial scale. It often means a career change or accepting less responsibility at work. It clearly causes havoc to short term cash flow and a dent in super contributions. Did I just mention that we actually need more money to cover our longer life expectancy! Having a clear strategy in place and ensuring that your money is actually working for you is critical.
Women invest differently
We have different motivations. We take a longer perspective. We are more careful. We do more research. We prefer a more disciplined approach. Women also do not see asking for direction as a point of failure – we are more open to financial advice.
Sadly – financial planning is a very male dominated industry. Women are often ignored in the conversation or spoken to in a condescending manner.
Woman are much more vulnerable to financial insecurity after a relationship breakdown (we all know the divorce stats). Research shows that woman in a long term relationship are much more likely to take responsibility for the day to day budget leaving the management of longterm finances up to their partners. These woman will have to face the added pressure of managing their finances with very little experience. They also face the risk of exposure through their naivety.
Women are pretty vulnerable when it comes to money – we need more but earn less. Our security can only come through understanding our own needs then gaining the knowledge and confidence to address them.
Marisa has almost two decades of experience in managing money for both large institutions and private individuals. She strongly believes that both men and woman have equal say and responsibility in achieving their long term financial goals.
Marisa Hoffenberg, Bcom, CFA, DFP