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While the gender wage gap persists, there are increasing signs of good news and progress when it comes to women’s personal finances.
With more women attaining higher education, earning more money and delaying marriage and family building, many, including those in younger demographics are feeling financially empowered. To be sure a positive thing, but it also brings with it responsibly. That’s creating demand for professional advice among women.
Also of note to advisors are the points that as women make more money, logically, they feel more empowered and they look for avenues to increase their financial knowledge bases.
Important Survey Details
Tennessee-based First Horizon Corp. recently polled 1,000 women ages 25 to 65 with a total household income of $75,000 and above in the Southeastern U.S. For advisors, the findings are noteworthy. One of those facts is that 65% of women queried view their financial knowledge as good or excellent.
“32 percent of 35–44-year-olds, and 28 percent of 25–34-year-olds, rate their financial knowledge as excellent. This drops to 14 percent of 45–54-year-olds and 19 percent of 55 to 65-year-olds,” according to the bank.
Interestingly, 75% of those queried described themselves as self-directed investors, but the same percentage said their comfortable seeking financial advice. Both are positive percentages for advisors. It’s clear why the latter percentage is constructive while the former implies there’s ample room for advisors to make inroads with female prospects.
Of note to advisors looking to cater to Gen Z and millennial women is the point that females in those demographics are more open to pursuing financial advice than their older counterparts.
“40 percent aged 25–44 said they felt very comfortable seeking financial advice compared to 20 percent of 45–54-year-olds and 28 percent of 55–65–year–olds,” adds First Horizon.
Women Want Financial Independence
“Independence” can be a broad term, but when paired with finances, women want it and can mean anything from cobbling together robust retirement savings to eliminating student debt to not being financially reliant on a partner.
Owing in large part to the great wealth transfer women’s financial independence will increase and so will their need for money management. It’s on advisors to offer the services and tools necessary to do business with increasingly well-heeled women.
“"We are amid a significant shift, one that will make financial literacy and seeking professional financial advice crucial in the coming years. By 2030, around $30 trillion is set to transition into women's control, driven by the transfer of assets from Baby Boomers," explains Tracy Bell, CFA, and Director of Equity Investment Strategies at First Horizon Bank. "This great wealth transfer presents a unique opportunity for women to flex their financial superpowers, solidify their plans and actively shape their financial future."