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Featured Advisor



Srbo Radisavljevic
Managing Principal/Investment Advisor

Edge Portfolio Management

City:Northbrook

State: IL



BIOGRAPHY:
At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, following Chicago sports, enjoying ethnic cooking, and serving as a school board member for Norridge School District 80.

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High Net Worth Women...and How They Got That Way

High net worth women self-report a more cautious, conservative and less confident mindset toward their financial situation than men.. Could this be the secret to their success?

| BY Donald Liebenson

High net worth women self-report a more cautious, conservative and less confident mindset toward their financial situation than men, according to Affluent investor research conducted by Spectrem’s Millionaire Corner. Could this be the secret to their success?

There are telling gender differences in which factors high net worth women and men attribute to their financial success. More than nine-in-ten high net worth investors (95 percent) rank hard work as the primary foundation of their wealth, followed by education. But high net worth women give equal weight to frugality, which is illustrative of the unique financial challenges they face. Women tend to earn less money than men, which impacts their ability and opportunity to save for retirement. Because they tend to live longer than men, women also face higher health care costs throughout their lifetimes

High net worth men, on the other hand, are more likely than women to credit their wealth creation to smart investing over frugality.

High net worth women, too, are less likely than men to attribute their wealth to luck, being in the right place at the right time, and taking risk. Only one-third said they would be willing to take significant investment risk on a portion of their investments to earn a high return vs. half of men.

Women were more likely to credit their wealth creation to decisions made for them by their financial advisor, another indication of their self-reported lack of confidence in their investment knowledge and the benefits they see in delegating professional who ideally can give them peace of mind about their finances. The wealthiest women respondents (with a net worth of at least $5 million, not including primary residence) are more likely to be dependent on a financial advisor to make all of their investment decisions (23 percent vs. 15 percent)

But this, too, may be a gender thing. “When men self-report, they tend to (overstate their expertise) while women tend to underreport,” noted Candace Bahr, managing partner of the Bahr Investment Group and cofounder of the Women’s Institute for Financial Education.” It’s not that they don’t know, they just don’t acknowledge what they do know.”

Several studies have found that women’s lack of confidence in their financial literacy and their conservative mindset can make them successful investors. A 2013 Financial Finesse study found a greater percentage of women were prudently rebalancing their portfolios, reviewing all investments to develop a master asset allocation plan, and analyzing fees and expenses associated with their investments.

This is consistent with other research findings that women actually improve their investing habits and behaviors in a strong market, while men fall victim to a phenomenon called “testosterone overload,” by which in the midst of  large gains, they ignore the risk management controls they originally put into place. As they take on more risk, women were much more likely to “counterbalance,” becoming more diligent in protecting the wealth they have accumulated.

Caution and prudence are seen in high net worth women’s concerns over national and personal issues. They are more concerned than their male counterparts over most national economic issues, in particular prolonged economic stagnation (88 percent vs. 81 percent), inflation (77 percent vs. 68 percent), an increase in interest rates (56 percent vs. 48 percent), tax increases (75 percent vs. 71 percent), and even terrorism (68 percent vs. 57 percent). One area with which they bother less than men is the political environment, a concern for 85 percent of men vs. 80 percent of women).

Not surprisingly, high net worth women are consistently more concerned than men about maintaining their financial position (69 percent vs. 61 percent) and financing their children’s education (32 percent vs, 25 percent).

In selecting investments, high net worth women and men give near-equal consideration to the level of risk and the diversity of their investments. But women give more consideration to an investment’s track record (81 percent vs. 68 percent) and the reputation of the company making the investment (83 percent vs. 78 percent).

So while they may be more conservative investors than men, for high net worth women, this mindset may pay off down the road. Nearly eight-in-ten of respondents with a net worth of at least $1 million said they fully expect to have sufficient income to live comfortably during retirement.



About the Author


Donald Liebenson

dliebenson@millionairecorner.com

Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.  

A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment. 

 


 

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