Navigating The New Gender Demographics

The rise of the “Woman of Influence”

by Katie Libbe

Ms. Libbe, is Vice President of Consumer Insights for Allianz Life. In this role, she is responsible for leading retirement income strategy and consumer education efforts for Allianz Life. Connect with her by e-mail: [email protected]

Special Feature: The Ascension of Women

What does it take to be a “Woman of Influence”?

Although it may sound like an intimidating label – requiring years of education, a C-suite title and six-figure salary – when it comes to managing finances, a true Woman of Influence can be found everywhere from the boardroom to the house next door. This wasn’t always the case, but according to the 2013 Women, Money & Power Study from Allianz Life Insurance Company of North America (Allianz Life,) since the 2008 financial crisis, the way women relate to money has changed, giving rise to a more empowered, informed and active woman with respect to her finances.

This is an important development for financial professionals and one that demands more attention from the financial services industry as we develop strategies to make better connections with our clients. But what makes a Woman of Influence, how many are out there and what type of financial guidance are they looking for? The 2013 Women, Money & Power Study found that one in five women fit this profile. These Women of Influence are active in major investment decisions, have a good understanding of financial products and are interested in learning about financial matters. As a result of this increased level of engagement, the Woman of Influence is more likely to feel financially secure (79% agreed versus 62% of all women surveyed) and more likely to feel confident in her ability to spend, save and invest wisely than the average woman (87% agreed versus 69% of all women surveyed).

The study, conducted with more than 2,000 women ages 25-75 with a minimum household income of $30,000 a year, also found Women of Influence have a much better idea about their financial future, including their prospects for retirement. Forty-seven percent of Women of Influence began saving while in their 20s and they are much more likely to have started saving for retirement than the average respondent – with only 1% of Women of Influence saying they have not begun saving versus 12% of all women surveyed.

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A Growing Demographic: One in Five Women

Perhaps the most inspiring finding from the study was the growing number of women who fit this profile – a group that doesn’t necessarily fit the typical Power Woman profile of someone with a large salary and an MBA. These women are more financially engaged than ever and are in the process of evaluating their own relationship with their finances to determine where they stand and what steps they need to take to become more confident with financial and retirement planning.

However, despite the fact that the Woman of Influence doesn’t have to be career-focused and high-earning, the study found that many do have more professional success. As a result of her financial savvy and empowerment, Women of Influence tend to have more earning power (average of $57k/year versus $48k/year for all women surveyed), a higher incidence of post-graduate education attained (26% have completed a graduate degree versus 20% for all women surveyed) and more success in the workplace (they are 50% more likely to be a business owner and 80% more likely to be at the director or VP level within their company than the average woman).

Other Defining Characteristics: More Knowledgeable and Confident

To reiterate, the Woman of Influence profile is about more than education, jobs and earning power. The true measure of a Woman of Influence is her level of financial empowerment, something the study found is on the rise for women across all age ranges and relationship status categories.

Yet, while the majority of women today are feeling a high level of financial empowerment, the profile for the Woman of Influence is even more empowered. Compared to all women surveyed, Women of Influence say they have more earning power than ever before (70% versus 57% of all women surveyed); and more are the primary bread winner in their family (73% versus 60% of all women surveyed). A larger percentage also identified themselves as the household CFO (72% versus 54% of all women surveyed) and noted they make more than their spouse/partner (43% versus 32% of all women surveyed).

Perhaps most concerning, despite the fact that more Women of Influence work with a financial professional, less than half (45%) see theirs as a go-to source for financial information

The real key is how Women of Influence are more informed about financial matters and more confident about retirement. Ninety percent of Women of Influence said they are more likely to believe that becoming more financially knowledgeable has made a real difference in the quality of their life versus 67% of all women surveyed and 46% said they have “no problem knowing what to ask or where to go,” versus 35% of all women surveyed. Furthermore, only 23% said they are less likely to feel that poor management of their finances created real problems for them versus 30% of all women surveyed.

Implications for Financial Professionals

So what can financial professionals take away from these findings?
First and foremost, it’s clear that the Woman of Influence is hungry for financial knowledge and ready to engage at an even higher level. The good news is, for many this process is already underway as more than half of Women of Influence (52%) say they currently work with financial professionals (versus 38% of all women surveyed). As a result of this relationship, Women of Influence are more likely to feel confident and prepared for their financial future (86% agreed versus 77% of all women surveyed) and more likely to feel they earn a better return on their money (83% agreed versus 75% of all women surveyed).

These women also said they’re more likely to understand financial terminology and issues better (80% agreed versus 65% of all women surveyed) and more likely to be active in financial planning (85% agreed versus 68% of all women surveyed). However, despite this higher level of engagement, there is more work to do as women still feel they are underserved by the financial services industry.

Virtually all women who took part in the 2013 Women, Money & Power Study said they feel alienated by the industry, including Women of Influence, and a large percentage of women also noted they believe financial advice and materials are geared only to the wealthy or toward men. Perhaps most concerning, despite the fact that more Women of Influence work with a financial professional, less than half (45%) see theirs as a go-to source for financial information.

Next Steps

The fact that the study reveals one in five women fit this profile should prompt financial professionals to take notice of these women and look for ways to make their practice more appealing to all female clients.

Now that we know the Woman of Influence exists, the financial services industry must evolve and adapt in order to both attract and maintain her business. Service-related issues are key concerns and often take priority over returns on investments. It must be recognized that women place a high value on interpersonal skills and feeling personally cared about. They are put off by a lack of responsiveness and the sense that they’re simply getting cookie-cutter solutions.

There is also a need for more engaging and more clearly written materials. The vast majority of women find most financial information hard to understand, dull, and boring. Even Women of Influence noted their desire for information that is easier to comprehend.

Tips to Become a Woman of Influence

Finally, it’s important to remember that all female clients aren’t Women of Influence yet, but many aspire to reach that status. Here are a few steps you can suggest in helping interested clients put themselves on the path to becoming a Woman of Influence:

  • Set goals: Whether they pertain to spending, saving or educating themselves on investing, financial goals are the key to helping your clients achieve success.
  • Seek independence: They shouldn’t rely on someone else for their long-term financial security. All clients should make efforts to learn about money management, investing and specifically their current financial situation.
  • Build an emergency fund and fund your retirement: Encourage your clients to build an emergency fund to help ensure short-term security. Their retirement savings is the foundation for their later years—both are critical.
  • Embrace risk: By nature, many women are risk averse. However, it takes a certain level of risk in investing to realize greater returns. Women clients need to embrace their fears—playing things safe isn’t always smart.

Make it your goal to attract and retain women as they grow and become Women of Influence because as the study points out, the majority of Women of Influence already work with a financial professional. The real opportunity is to catch women on their way up.