More than their male counterparts, high net worth women tend to self-report a more cautious, conservative and less confident investment mindset. This is reflected in what financial and personal issues most concern them, according to our new free white paper, High Net Worth Men vs. Women.
Women face unique financial challenges in realizing their goals for a secure financial future. These range from salary inequality that in turn impedes their ability to save towards retirement, and time away from the workplace to either start a family or serve as family caregiver. They are apt, therefore, to be more sensitive to financial issues that will directly affect their pocketbook and portfolio.
On some issues, high net worth men and women are basically on the same page. For example, high net worth women are just slightly less concerned then men about the political environment (82 percent vs. 84 percent). High net worth women and men also indicate near equal levels of concern about stock market performance (78 percent of women vs. 76 percent of men) and tax increases (73 percent vs. 69 percent).
But high net worth women report more concern than men about inflation (67 percent vs. 50 percent) as well as the impact of an increase in interest rates (45 percent vs. 38 percent). Other national issues in which high net worth women indicate more concern than men are low interest rate on savings (68 percent vs. 62 percent) and terrorism and ISIS threats (77 percent vs. 70 percent). And while women are near as equally concerned as men about the political environment, they are more focused than men on government gridlock (80 percent vs. 76 percent), which they perceive as an obstacle to fixing the nation’s economic ills.
High net worth women’s more cautious mindset is also reflected in their concern about their personal financial situations, our white paper finds. They report more concern than their male counterparts about maintaining their financial condition, the financial situation of their children or grandchildren, financing the education of their children or grandchildren, the loss of their job or the loss of their spouse’s job, using their wealth to help others and having enough money to leave to posterity.
While high net worth men are more likely to be concerned about their own health than women are concerned about their own health, women express more concern about having someone to take care of them in their old age and spending their final years in a care facility. This concern disparity can be attributed to projections that women live longer lives than men.
Retirement is a heightened concern even among high net worth women. Almost half (48 percent) are more concerned about being able to retire as planned. In comparison, four-in-ten men cite this as a personal concern. Just over one-fourth of high net worth women (29 percent) and men (26 percent) express concern about themselves or their spouses being forced into retirement before they are ready.
Financial advisors will be able to engage with and serve their high net worth clients more effectively if they consider these gender-driven differences in financial and personal concerns. Advisors should consider the following when serving high net clients:
· Women investors are more loyal to their financial advisors than men. This loyalty demands a more personalized and informed approach that includes timely responsiveness.
· Wealthy women are fact-oriented and often initiate an in-depth discussion about why a particular investment is a good choice for their portfolio. Be prepared to discuss such criteria as investment track record, tax issues and diversification challenges.
· Wealthy women have heightened concern about family issues and about being able to take care of themselves throughout their retirement. Advisors must be attuned to these concerns and proactively discuss them with their clients.