Women and Money: Make 2020 the Year to Learn How Women Think About Their Finances

Women Think Differently About Money Than Men

Genders are different and think differently about money. Financial Advisors of both genders should understand these differences to better serve their clients. This can also give them the opportunity to generate more revenue from existing accounts. It’s important to note these differences between women and men are value neutral; one gender’s style isn’t better or worse than the other, only different. 

Women Often Lack Confidence Discussing Money

“Only 47% of women say they would be confident discussing money and investing with a financial professional on their own.” Unfortunately, this statistic isn’t from a survey done in the 1950s. It is from Fidelity’s Money FIT Women Study released in 2015. For comparison, the survey reported 77% of women are confident discussing medical issues with a doctor. [1]

Why is this?

Much of the reluctance women feel about discussing financial issues with a professional is a self-perceived, or actual, lack of knowledge about investing. Women don’t want to look foolish or ill-prepared when discussing money with a professional, especially if that professional is a male;  approximately 80% of Financial Advisors are men, this is a significant issue.

Many Women Have Difficulty Talking to Anyone About Their Finances

Reluctance to talk about investing extends beyond Financial Advisors. Reports Fidelity, “four in five women (80%) have, at some point, refrained from talking about their finances to their closest confidonces. A number of factors hold women back from talking money with loved ones.” Affluent women express their reluctance in a concrete way since 16% have “a secret stash of money their partner does not know about.” [2]

Reasons Many Women Don’t Want to Discuss Money With Anyone

According to the Fidelity study, many women don’t wish to discuss money or finance with family, spouses, partners, or friends. The top four reasons are: 

1. Too personal
2. Women don’t want people they are close to, such as friends or relatives, to know this information  
3. Women don’t have a high comfort level in discussing financial issues
4. During their upbringing, whether as girls or teenagers, parents often told young women not to talk about money. [1] (This isn’t just women, plenty of the men were also raised to not discuss money).

First Priority: Establish Relationship of Trust

Whether you are a woman or a man, you as a Financial Advisor must first establish a relationship of trust. Then, you can employ "polite persistence" to get your female clients to discuss their finances with you. If you are a Financial Advisor and you never advise your client because they are reluctant to discuss their assets with you, why are they paying you? 

 Resources: 

[1] https://tinyurl.com/Fidelity-Women-Money-2015

[2] https://tinyurl.com/Allianz-2013-Women-Power

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Contributing Writer: Subject Matter Expert Charles McCain