By John Drachman
Let’s face it, nature smiles on the female of the human race. With longevity on their side, women will live about six years longer than the average male.
And, while women are likely to earn less in their working years, they still stand to “end up as ultimate winners.”
That’s why it’s especially important to plan their finances accordingly. According to U.S. News, 29% of female baby boomers expect to delay retirement until age 70 – while 30% said they weren’t confident they would have enough wealth to retire.
Two gender investing drawbacks stood out:
- A woman with a bachelor’s degree has lifetime earnings of just 60% of her male counterpart.
- This shortfall translates eventually into an annual Social Security check that’s about 20% less.
How Women Are Improving Their Financial Readiness
As they grapple with their financial decisions, women have been increasingly turning to professional advisors – just like the guys. An advisor gender-bias study from the National Bureau of Economic Research though has helped put women in the driver’s seat where their money is concerned. While gender bias cropped up in the study, so did a solution that showed how women could guarantee that the advice they receive is unbiased and accurate – by simply asking their professional a single question:
“How will you structure your interview with me to identify the best asset allocation blend for my needs?”
By starting a professional discussion this way, you invite your advisor to enter the gender-free zone and leave their stereotypes at the door. Not every woman wants to avoid risk, hold more liquidity – or invest in sustainable industries.
Suggest your advisor candidate share their questions with you in advance and even provide you with a sample Investment Policy Statement so you can see first-hand how they take a client through their decision-making process. Following your initial discussion, most professionals provide their clients with preliminary thoughts before more information gathering. After fine-tuning their recommendations, your asset allocation-minded advisor will provide final recommendations for your approval.
By focusing on asset allocation first, the women who participated in the National Bureau study were pleased to report they felt any gender bias was replaced by more meaningful explorations of their personal financial situations. “The study found no significant difference between the investment ideas given to a female investor versus a male investor” when decisions were structured around asset allocation, the study noted.
By showing an advisor you expect – and demand – a structured discovery process in your relationship, you help them get off to a faster start in matching your objectives with selections that fit your personalized balance between risk and reward.
John Drachman is a contributing writer to MyPerfectFinancialAdvisor the premier matchmaker between investors and advisors .John is an IABC award-winning writer, who applies his 30 years of financial marketing experience toward advancing the dialog between investors and investment professionals.