When women seek financial services, many feel they are treated with disrespect and condescension because of their gender, according to a survey of 12,000 women in 21 countries by Boston Consulting Group. What’s more, women face unique life circumstances and experience major life shifts in different ways than men do, which can require a different approach to financial planning. Does this mean that women would benefit more from a financial advisor focused on serving women than one who doesn’t specialize in this way?

Men’s vs. Women’s Needs

Arguably, the biggest differences between men and women that might require a unique approach to managing finances are women’s lower lifetime earnings and longer lifespans. These two factors mean that women need to save and invest more than men, but this can prove difficult. An October 2015 Vanguard study found that men’s account balances in defined contribution plans, such as 401(k)s, tended to be 50% higher than women’s because of men’s higher wages.  Women actually saved at a higher rate, but since the women in the 585,000-participant study were drawing on an average income of $68,895, while the men studied were drawing on an average income of $85,983, the women ended up with much less in their retirement accounts: an average of $79,572 versus men’s $123,262. 

Designing Financial Plans for Women

Advisors focused on meeting women’s needs might be able to help female clients overcome the gap between what they need to meet their financial goals and what they are able to earn and save. They can do this by developing financial plans to help them cut expenses and increase both income and investment returns. Here’s how. (See also 5 Traits the Best Financial Advisors Share.)

Insurance, budgeting, career goals and more – A women-oriented advisor might review a female client’s existing insurance policies and help her shop for less expensive coverage that still meets her needs. Or he/she could suggest that a client use a budgeting program like Mint to track spending, then review each expense with her at the end of the month to look for unnecessary spending. Together they might discuss the client’s job or career and create a plan for acquiring new skills or more education that might lead to a promotion, a higher-paying position at a new company or a change in direction to get on a more lucrative path. They could also make sure the client takes full advantage of all the tax-advantaged retirement savings vehicles available to her, minimizing her tax liabilities and taking the appropriate level of risk to earn the long-term investment returns she needs.

Household financial managemen Women commonly take primary responsibility for managing a household and caring for children in addition to working full time, leaving them with little time or energy to think about financial planning. In the Boston Consulting Group’s survey, women said that their most frustrating task was managing household finances from month to month.  An advisor who takes on tasks that might otherwise get neglected or who eases the burden by simplifying a client’s household financial management can make a big difference. (Read Why Women Choose Women for Financial Advice.)

Major life events After life changes such as marriage, childbirth, divorce and losing a spouse, women are more likely than men to experience significant shifts in their financial priorities, the Boston Consulting Group report notes. Specifically, women are more likely than men to stop earning money after the birth of a child and to assume new financial responsibilities after separating from or losing a spouse.  A sympathetic financial advisor can help a female client address the financial challenges created by these life-altering shifts.

Equal representation in planning – Another issue: The 2013 Fidelity Investments Couples Retirement Study found that for couples who already work with a financial advisor, married women are more likely to let their husbands take the lead in the client-advisor relationship, which puts women at a disadvantage if their husbands predecease them and they’re left alone to manage the household finances. Choosing a financial advisor who recognizes this disparity and requires a woman to take an equal part in the advisory relationship can better prepare her for the statistical likelihood that she will outlive her husband.

Social Security – Further, women who spend less time in the workforce due to child-rearing or caring for an aging parent may have lower Social Security benefits to rely on in retirement. Those who divorce a higher-earning spouse after fewer than 10 years of marriage won’t be entitled to Social Security benefits based on their husband’s record.  A financial advisor who is aware of these challenges can strategize ways to maximize a client’s Social Security benefits and create a plan to make up for any that are less than ideal.

Long term care insurance – Finally, women with assets to protect may be more likely to benefit from long-term care insurance than men, since they have longer lifespans. An advisor who understands this need will help female clients find, purchase and budget for these expensive and complicated policies.

Is It a Marketing Gimmick?

In today’s market, both individual financial advisors and robo-advisors offer services targeted to women. Many are owned and operated primarily – or exclusively – by women who seem to take a genuine interest in helping people whose circumstances they can relate to.

However, for other advisors, being women-friendly is just a marketing initiative, says Lauren Klein, a fee-only investment manager and financial planner with Klein Financial Advisors in Newport Beach, Calif. “These firms see women as a niche-marketing opportunity, so they open women’s divisions or even set up a separate webpage to attract women into what is often a male-dominated firm,” Klein says. “Serving women well takes much more than marketing materials and outreach. Many so-called women-friendly advisors think that changing brochure colors to softer tones, putting women on a brochure or even having ladies’ events means they are serving women, but they’re not actually taking the necessary steps to serve women as they want and need to be served.” 

Regardless of their intentions, what do these advisors offer that’s different from what gender-neutral services offer? Are they really that different? Examine their offerings and the answer largely seems to be no. After all, is it really only women who want their financial plan to provide for their families and make them feel secure; who want a level of portfolio risk that lets them sleep at night; who want to make sure they have enough assets to last a lifetime and possibly leave an inheritance; and who want to get information in clear, easy-to-understand terms?

Men, too, can have low earnings that make it difficult to save enough for retirement; unnecessary expenses that could be reduced or eliminated; or an above-average projected life expectancy thanks to a good family health history. They can also find themselves lost after the death of a spouse who managed the household finances.

A Net Positive

Women feel financial advisors typically take them less seriously than they take male clients and that many financial advisors aren’t sensitive to their unique circumstances, according to the Boston Consulting Group survey. If a female-focused advisor means the difference between feeling comfortable approaching a professional for help and continuing to wing it on your own, these services may add real value to your portfolio and improve your peace of mind. That’s true regardless of the financial advisor’s motives in trying to appeal to female clients – and whether or not the advice or strategies are really unique to women. In sum, women don’t necessarily need to seek out a female-focused financial advisor, but if having one leads to feeling more comfortable and more engaged, these targeted services are a good thing overall.

The Bottom Line

Much of the financial advice men and women need is the same: avoid debt, save and invest for retirement, purchase adequate insurance. Women may face unique challenges related to lower earnings and longer lifespans, and choosing an advisor who consciously accounts for these circumstances can help make women better off.

But at the heart of any good advisory service should be a focus on the individual client and her specific situation, strengths and challenges – not a blanket approach that treats all clients the same. Good advisors will serve women well, whether or not they specifically emphasize gender-based financial planning. For related reading, check out How Financial Advisors Mistreat Women (And What Women Can Do About It).



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