Everywhere you look, the signs are clear that the financial power women wield has changed dramatically from where it was just a generation ago. According to a recent study by Women and Co., two thirds of all women in the U.S. are the CFO of their household. A similar study on women’s financial independence from 2008–this time from Synovate–noted that an equal portion of women in the United States feel financially independent. Even a 2009 report from the U.S. Bureau of Labor Statistics says that women are the sole or main breadwinners in a third of U.S. households.
Clearly, women are holding the financial reigns in larger numbers than ever before, yet in most cases, the financial services industry still regards female clients as a niche market.
Perhaps that is because the majority of advisors, agents, brokers and other financial professionals are men. Female producers are still in the minority and as a result, much of the continuing education, networking opportunities and industry conferences are developed with the male producer in mind. Often, sharing best practices among producers is solely about how “he” can best connect with “his” male clients.
Female producers have had to adapt this thinking to work with their female clients in the past, but things may start to change as more women walk through our doors, asking for guidance on how to plan for retirement. And, according to the data, this will be a more frequent occurrence in 2010 and beyond. When it comes to managing finances and planning for retirement, the perceived minority is becoming the majority.
Women are earning more than ever before. According to the U.S. Bureau of Labor Statistics, earnings for women with college degrees have increased by almost one-third since 1979 compared to a mere 18% increase for male college graduates. As noted above, women are also making more of the financial decisions in joint households. But more importantly, however, recent data from the U.S. National Center for Health Statistics show that on average, women live longer then men, giving them more of a reason to be in control of decisions that affect retirement planning.
As a result of these trends, it would stand to reason that more women are now actively preparing for their futures and embracing the role that financial advisors can play with their retirement planning. Unfortunately, there is still a wide gap between the control women have over their finances and their feelings of preparedness about retirement.
Reclaiming the Future, a recent study from Allianz Life of more than 3,200 adults ages 44 to 75 found that the women surveyed felt less prepared for retirement than the total group. A higher percentage of women felt totally unprepared for retirement, had no idea if their income would last throughout their lifetime and were concerned about possibly outliving their income. To coincide with these sentiments, the 2008 Prudential study Financial Experience and Behaviors among Women noted that 75% of women feel they need help when making important financial decisions.
The desire for assistance is there, so the industry has a great opportunity to connect with women and help them gain confidence about retirement planning.