Partners In Planning

Shifting Demographics

How advisors should ‘meet women where they are’

by Ann Bair

Ms. Bair is Senior Vice President of Nationwide Financial Marketing. Visit www.nationwide.com.

I grew up in a home where I was encouraged to take control of my financial future. In fact, it’s something I learned from my grandmother, who alongside my grandfather, prepared in advance for her retirement and stayed involved in managing her savings even in her later years. She enjoyed a long life of 102 years, teaching me the importance of planning for longevity. While her journey inspired me to proactively plan for retirement, I’ve also learned that planning for the future can be challenging for even the most financially savvy investors, especially when they’re facing ongoing threats from volatile markets and inflation. For women investors, that challenge can be even more significant.

Due to a number of factors, including gender pay disparities, greater family caregiving responsibilities, longer life expectancies and lower levels of retirement savings, planning for retirement presents unique challenges for female investors.

In fact, only 36% of female investors feel optimistic about their financial outlook for the next 12 months, and 70% say inflation and signs of a potential recession have made them rethink if and when they can retire, according to Nationwide’s ninth annual Advisor Authority study. While women do have strategies in place to help save for retirement, including relying on retirement savings, Social Security and defined benefit plans, most do not feel confident about their plans. Only 45% say these strategies will help protect their assets against market risk.

This highlights a tremendous opportunity for advisors to help women take control of their financial future. There’s just one catch – while Nationwide’s survey found 96% of advisors feel equipped to serve their female clients, only 44% of women feel their advisor understands their financial goals.

While this disconnect is striking, it can be addressed. We asked women what they want from financial advisors in past Nationwide Retirement Institute® surveys, and found they are looking for a partner in planning for the future. Women want more financial guidance – not just about the steps we need to take, but the different scenarios we might face and the knowledge we need to make informed decisions.

Here are some tips for advisors to help build a deeper, more trusting relationship with their women clients.

Listen Actively

When women investors say they don’t feel their advisor understands their financial goals, I believe that means they do not feel completely heard. The industry hasn’t always focused on our needs—and this may be driving the disconnect we’re seeing. Advisors have an opportunity to bridge that gap by understanding the unique concerns and objectives of the women they serve.

Ask your female clients about their concerns and aspirations, as well as what they need to inspire confidence in their financial future. Invite them to talk about what keeps them up at night. While you may have a go-to approach that seems to work, make sure you are truly listening to your women clients before offering solutions – and help them see how the solutions you eventually recommend connect back to the goals and concerns they shared with you.

Provide Investment Education

Women don’t invest in the market at the same rate as men, according to a survey from BNY Mellon Investment Management – and some of the reasons behind that are startling. According to the survey, one in ten women feel they don’t fully understand investing and only 28% feel confident about investing their money.

Women want more financial guidance – not just about the steps we need to take, but the different scenarios we might face and the knowledge we need to make informed decisions...

Additionally, Nationwide’s survey found less than half (45%) of women said they had a strategy in place to protect their assets against market risk in 2024, down from 51% of women respondents who answered similarly in 2022. While many of the current strategies they are using, including leaning on their retirement savings, Social Security and dividend yielding stocks are good, they could come up short when it comes to generating guaranteed income.

Advisors have an opportunity to help women understand how to make their investments work for them by creating a holistic plan that addresses the amount of income they can expect from current plans, how to optimize Social Security benefits, the impact of market volatility and health and long-term care costs in retirement. This is a great way to help female clients understand the key factors that will impact their retirement, helping them feel more confident about their strategy.

Offer Personalized Financial Planning

It’s important to acknowledge that there is no one-size-fits-all approach for clients, including your female clients. However, you can help them feel more confident by creating a personalized financial plan based on their unique needs and goals.

For example, our survey found single women in particular are grappling with unique circumstances, including planning for retirement without the balance provided by a partner’s savings and income. Financial advisors should talk to these clients about topics like planning for long-term financial independence, legacy and wealth transfer and building an emergency fund to help them grow and protect their nest egg.

Newly single women (whether recently divorced or widowed) may have depended on their spouse or partner to handle money management. This group may need a different level of education on key financial concepts as they find themselves managing their finances for the first time.

Support Women In Financial Services

Unfortunately, the financial services industry still lacks gender diversity – although I believe we are making strides to address this imbalance. Recently, the Bureau of Labor Statistics reported 31% of financial advisors are women.

Representation matters, and female clients often express a preference for working with female advisors. Encourage more female advisors to enter the industry and serve as a mentor to them – that means actively recruiting them to join your firm. That doesn’t mean male advisors can’t serve female clients. Having more female advisors associated with your practice presents an opportunity for you to learn from them.

 

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