We often get asked, why do we focus our financial planning and investment services towards women? The question makes complete sense because the company is founded by two men. I usually refer to the old adage that a lost man usually doesn’t stop and ask for directions, but a lost woman does. Now there is research to support that claim.
According to a study done by US Bank in 2021 called “Women and Wealth: Exploring the Gender Gap” women are more likely to approach financial planning as a partnership with a trusted advisor. They also found that women value a financial advisor that listens to them more than men do.
The reason why women seek to partner with an advisor tends to change over time and the problems that they are looking to solve with the help of a trusted partner also evolves in different life stages.
Early Career Women
Younger women are generally comfortable and confident about money and financial planning. They've grown up with more salary transparency, the proliferation of money-related apps to help with budgeting and investing, and the optimism of youth. They are interested in financial planning that fits their busy lives. They make good salaries, still have debt, are single or newly partnered, and want to get a good foundation in place.
They gravitate to financial planners that offer the planning they need in a way that they can relate to. This includes cash-flow planning, debt reduction strategies, maximizing employee benefits, and above all – helping them improve their financial literacy.
This generation of women understands the value of starting early on the path to financial independence and wants financial planning advice that can help them build a solid foundation. They are also leaders in the conversation around ESG or sustainable investments. They believe that financial growth should not have to come at the cost of the environment or their communities.
Mid-Career Women
As women approach the mid-point of their careers, money becomes more complex. Careers are in full swing, and growing wealth brings more questions than answers.
These women may not have worked with a financial advisor before. Whether single or partnered, they realize that all the different pieces of their financial lives need to come together in a comprehensive plan.
For them, it's about creating the option to stop work, scale back work, start a business of their own, or financial support those they love without disturbing their quality of life.
They realize the value of working with a financial advisor that can help them put together all the pieces of their lives including:
Equity compensation
What to do with an annual bonus
Tax planning
Saving for education
Taking the right amount of investment risk
Buying a second home or income property
Creating opportunities with their wealth
These women want a trusted partner that explains the “why” to them, and guides them to make choices that are right for them. As things change, they value being able to make changes to a plan to accommodate new goals or different circumstances. Sometimes a sounding board for major life decisions can be an invaluable resource.
Pre-Retirement Women
These women are driving the decision to work with a financial advisor for themselves and their families. Very often, something has sparked the need to partner with a financial advisor to solve an immediate problem:
A change of job
A spouse’s health issue
Aging parents
Imminent retirement
Death of a spouse
Tax issues
Having a trusted partner to help them sort through the issue calmly in a non-judgmental way is paramount. They want someone to help them fix problems, provide solutions, and ensure that no other avoidable situations are on the horizon. They may want to plan for a retirement that allows them the time they have always wanted with their family.
This group has the most anxiety around money and the least excitement.4 They take their time developing trust and want an investment plan that helps them achieve their goals – without taking on too much risk. After a full career of earning and saving the last thing they want is to bet it all on something insecure.
Retired Women
After the transition into retirement women still look for guidance from their advisors. Since women are typically care givers for their aging parents at a higher rate than men, they have a deep desire not to be a burden for those around them. They also desire to leave their community better than they found it and want to use their dollars to live their values. Topics top of mind for them include:
Reliable income for the rest of their lives
Long term care planning
Passing on dollars to children
Giving money to charity wisely
Funding education for grandkids
It is not uncommon for a woman to change advisors in retirement, especially if their partner chose the original firm or person. They know what they want in a professional experience and take recommendations from their network to find a good fit.
A Difference in Approach for Women's Financial Planning
Although the problems that arise for women may change, there are some things that remain the same. Women of all life stages are looking for guided assistance from someone that they trust, someone that takes the time to understand their views and helps them build a financial plan that serves them. Most firms say that this is their approach but most experiences rarely live up to the promise. As time goes on and women become more dominant directors of family financial decisions, firms that actually took the time to listen will be happy that they did.
About The Author
Alchemist Wealth is led by the expertise of Andrew J. Tudor, CFP®, RICP®, CAP® and Fred Tudor III, AFC®, MBA. Alchemist Wealth serves clients as a fiduciary specializing in providing fee-only financial planning, investment management, and retirement planning services. With over 2 decades of combined experience in financial services, Fred and Andrew bring a wealth of knowledge and personalized solutions to meet your financial goals.
The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.
This content not reviewed by FINRA
