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Stress doesn’t discriminate along gender lines meaning we all feel it, in some form or another, at some point. All of that is true of financial stress.
However, the effects of financial stress aren’t linear. In fact, it’s been clinically proven that such consternation affects men and women differently. For advisors that are looking to convert more female prospects to clients and those that want to enhance their relationships with existing female clients, they should note at least two important factors about these segments.
First, women want financial advice and they’re actively seeking it. In fact, data indicate they’re more likely to readily work with an advisor than are men. Second, women are currently stressed about finances and it behooves advisors to understand exactly why that’s the case.
Understanding Leads to Actionable Ideas
It’s often said that advisors should eschew cookie cutter, one-size-fits-all approaches and that’s certainly true when it comes to helping women conquer financial stress. Some of that starts by understanding that financial anxiety is usually triggered in women by different factor than it is in men.
Money matters that cause men to lose sleep often boil down to salary from their jobs and the performance of their investments. However, as a new survey from Laurel Road, a digital banking platform of KeyBank, indicates, financial stressors for women are different and higher in number.
“Women across all generations share a widespread apprehension about the current economic environment, with 78% agreeing that the economy makes them uneasy about staying on track with their financial goals, an increase over the 75% who felt this way last year,” according to the study. “When it comes to these goals, women continue to say they are most behind on retirement savings (36%), followed by credit card debt repayment (30%), and salary (22%).”
Obviously, those are worrisome trends, but to the credit of women, the Laurel Road survey confirms respondents aren’t sitting idly by. Rather, they’re being proactive in terms of seeking financial advice and taking on side hustles to shore up their financial outlooks.
Inquire About Sources of Advice
Advisors should also inquire about the sources of advice female clients and prospects are leaning. Seventy-six percent said they rely on their parents, according to Laurel Road. That’s fine, but no everyone’s parents are financial pros. There’s also the concern about social media, particularly when working with millennial and Gen Z women.
“Although only 11% of respondents see social media influencers as a most trusted source when seeking financial advice, social media is the second most referenced source for financial trends and practices for women (30%), followed by traditional media (24%),” observes Laurel Road. “Gen Z women utilize social media for information on financial trends and practices, the most of any generation (48%), followed by Millennials (39%). More Millennials turn to budgeting and investing apps than other generations, but even their usage remains low, at just 23%.”
The bright spot is that, according to the survey, less than one in five women currently work with advisors, implying there’s plenty of room for advisors to make inroads with women, assuming the right level of tailoring and appropriate strategies are implemented.
Related: Financially Confident: How Women Are Taking Charge of Their Retirement Future