Recently Spectrem Group hosted what we call the “Innovation Forum” for many of our financial services clients. We put on the Forum in conjunction with Financial Advisor magazine. It was initially created during the Economic Crisis to help companies focus on moving forward rather than just cutting costs. It has evolved into a community in which the members can share new ideas. Additionally we discuss the ongoing changes in financial services from the eyes of investors. Sometimes the financial services industry is slow to incorporate new trends and ideas. (Banks and investment companies were not at the forefront of mobile apps, etc. but what they ultimately provide are often the most useful.)
I had the privilege of hosting a panel of female financial advisors to discuss the differences in attitudes regarding investing between males and females. As these very intellectual sophisticated ladies discussed, women are soon to become the primary financial decision makers in our country. Not only do they live longer than men, but they also are more likely to go to college, etc. Ultimately they will become increasingly responsible for household investments.
The other interesting topic we discussed was the number of women they advise that come to them upon the divorce of their spouse. In most cases, the settlement they receive in the divorce is similar to getting a retirement account. They receive a specific amount of assets that needs to last throughout their lifetime or at least until they are able to re-establish their lifestyle.
The advisors pointed out that women don’t worry about a specific dollar amount but how what they have impacts their lifestyle. They also believe that their spouses are often unrealistic about the future with many believing they will work forever. In many cases, it will be the widowed spouse that needs to reconcile all of the pieces.
Women generally relate their assets to their family. Just as Spectrem research shows, it is the woman who is responsible for not only the children but aging parents. She is more likely to link the ramifications of financial issues on family issues.
Only a very small percentage of financial advisors are currently women. Our discussion pointed out that, in the past, many advisors were scored on their ability to sell rather than their ability to give holistic advice to families. Female advisors generally score higher on the second attribute.
Clearly the financial services industry needs to re-evaluate how it is approaching female investors.