Many women feel alienated and misunderstood in financial conversations, and this is due to three main challenges that make money discussions difficult.
Three Challenges Women Face in Money Discussions
It’s long been said that women shy away from financial conversations, but is that really true? At Aviance Capital Partners, we believe that women are just as willing to engage when they are approached about finance in the right way. But all too often, women are left feeling alienated and misunderstood by the average advisor. Read on to learn about three reasons why women can feel left out of financial conversations.
There are a handful of topics that most of us are taught never to talk about in public—politics, religion, and sex are just a few. But for women, money is often added to that list. So much so that in 2018, 61% of women surveyed said that they would rather talk about their own deaths than have financial conversations with friends and associates!
Not only is that statistic shocking, but it’s also a trend that can be detrimental to women’s long-term earning power. In fact, talking about salary and compensation with colleagues can help you make more money and lead to better financial practices.
It makes sense that women cling to the money taboo stronger than men, especially considering the traditional roles that men and women have played in the household. The emphasis placed on men to be the financial providers, while women are typically seen as the household caretakers, has in large part driven the idea that women either shouldn’t talk about money or don’t earn enough or know enough to speak knowledgeably on the subject.
Lack of Confidence
Despite the taboo nature of talking about money, women are heavily involved in certain areas of household finances, including budgeting, purchasing, and saving. However, women are generally less confident when it comes to investing than their male counterparts.
According to a survey by U.S. Trust, 65% of women are comfortable keeping a large percentage of their assets in cash through savings and checking accounts, money markets, and CDs, but they are significantly less likely than men to invest in accounts like employer-sponsored retirement plans, brokerage accounts, HSAs, real estate, and business interests. Of those women who are investing, only 41% actually understand their investments well, compared to 56% of men.
What’s more, a recent survey conducted by Bank of America shows that while men and women have equal influence on day-to-day financial decisions like budgeting and paying bills, less than half of women feel they have influence when it comes to decisions on investments (46% of women vs. 64% of men). Lack of knowledge is one of the top reasons why women feel less empowered to invest; yet 44% of women regret not investing sooner, and 26% regret not investing more.
Investing can be a key component of long-term financial success and closing the knowledge and confidence gaps between men and women is hugely important in making sure women are financially sound in their later years.
They Don’t Connect with Their Advisors
Not only are women less likely to work with a financial professional when planning and saving for the future, but those who do often feel disconnected from their advisor’s approach.
A multi-year nationwide study of women conducted by New York Life Investments revealed that half of women working with a financial advisor felt the advisor was incapable of connecting with them on a personal level, 40% felt that advisors ignore or dismiss what they have to say, and 62% felt they have unique investment needs that advisors do not understand.
Rather, women place a much greater emphasis on a personal connection, with empathy topping the list of traits women want in a financial advisor.
Let’s Have Honest Financial Conversations
I believe it’s not that women can’t or don’t want to be involved in these conversations, it’s that they are not being approached in the right way.
As a financial planner, I pride myself on getting to know my clients for more than just their account balance or investable assets. The Aviance WealthPlan™ process looks at investments as just one piece of your overall financial puzzle, and your financial puzzle is one piece of who you are as a person.
To learn more about my person-first approach to financial planning, and how I help women become financially fearless, click here. If you have questions or concerns about your specific situation, I would love to hear from you! Click here to schedule a free 30-minute financial review.
Aviance Capital Partners, LLC (“ACP”) is an SEC registered investment adviser located in Naples, Florida. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that ACP has attained a certain level of skill, training, or ability. While information presented is believed to be factual and up-to-date, ACP does not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Not all services will be appropriate or necessary for all clients, and the potential value and benefit of the ACP’s services will vary based upon the client’s individual investment, financial, and tax circumstances. The effectiveness and potential success of a financial plan depends on a variety of factors, including but not limited to the manner and timing of implementation, coordination with the client and the client’s other engaged professionals, and market conditions. The tax and estate planning information provided is general in nature, which should not be construed as specific financial planning or tax advice tailored to an individual reader. ACP suggests that readers consult a financial professional, attorney or tax advisory professional about their specific financial, legal or tax situation. Customized financial planning indicates that financial planning will be informed by the material financial and investment circumstances of the client, as communicated by the client to the adviser, but may not consider literally all aspects of a client’s financial affairs. Past investment performance does not guarantee future results. All investment strategies have the potential