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March is Women’s History Month – a notable occasion to be sure and one that should be a reminder to advisors that upping their focus on female clients is an all-year endeavor.
That’s particularly true at a time when women are, following a rough patch caused by the coronavirus pandemic, entering the workforce in big numbers, cementing their status as major drivers of consumer spending and broader economic growth. There are reasons why advisors should consider bolstering relationships with female clients while making efforts to turn those in the prospect camp into full-fledged clients. Those include issues such as the still present income gap and financial matters being a primary source of stress among women.
Plus, a case can be made that’s women can derive more benefit from working with advisors. After all, scores of data points, research, studies and surveys confirm the following: Women are better savers and more prudent investors than men. Plus, they’re eager to attain more financial education and high-level advice.
For advisors looking to better connect with women one word can guide that journey for both advisors and clients: Empowerment.
Why Empowerment Matters
On the surface, client empowerment might seem like an esoteric concept, but in reality, it’s actually rather tangible and easy to help clients. Anne Ackerley, head of BlackRock's Retirement Group, and Gargi Pal Chaudhuri, head of iShares Investment Strategy and Markets Coverage at BlackRock recently discussed strategies for helping women reach financial empowerment.
Two areas of emphasis advisors can start with is helping female clients address burdensome student debt while getting them into the equity market because many women have been too cash-heavy for far too long.
“And then I think another big focus that I have, the concept of a wealth gap. Thinking about where that comes from in terms of women not investing enough, in terms of women staying in cash and missing out on this incredible rally over the last decade, last two decades that the US stock market has been able to have,” notes Chaudhuri. “Also, in terms of women having higher student debts, living a little bit longer, and therefore having higher healthcare costs. All of that lead to the wealth gap.”
Another element in helping women attain more financial confidence is realizing that inflation affects them differently and more frequently than it does men. As Chaudhuri points out, the “Pink Tax” – charging higher prices for female goods than male equivalents – is alive and, unfortunately, well.
Retirement Planning: Pivotal Area of Emphasis for Women
Data confirm that worker access to employer-sponsored retirement plans is solid and when women have access to 401(k) plans and the like, they’re apt to contribute more than men.
That’s a positive for advisors because it confirms women are committed to saving for retirement and many want more advice on that front. Still, advisors need to be aware of the retirement concerns and needs that are specific to women.
“Women live longer, and probably the number one financial fear for women is the fear of outliving their savings. and so, we as an Industry really need to work on how do we help everybody, take their savings and convert that into a stream of income that they won't run out of for however long they live,” notes BlackRock's Ackerley.
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