One of the ways that high income women defy traditional attitudes regarding women and investments is in their assessment of the factors that contributed to their wealth creation.
A new Spectrem Group report, High Income Women Investors, finds that seven-in-ten consider taking risk to be the primary factor in their financial standing. In comparison, just over half (51 percent) of all other Affluent investors responded similarly.
High Income Women Investors examines the investment attitudes and behaviors of American high income women whose annual household income exceeds $200,000. The majority of high income single women who participated in the survey exceeded this benchmark, while married high income women reported annual household income exceeding $400,000 and also work in professional or executive positions.
Risk tends to be a term not normally associated with women investors, many Spectrem and national studies have found. Whether it is the case or not, women are more prone than their male counterparts to self-report lower certainty in their investment knowledge.
But high income women, who tend to be younger and more highly educated than the general investor population, have more confidence in their financial acumen. A majority (54 percent compared with roughly one-third of Affluent investors overall) indicate that they are willing to take a significant investment risk on a portion of their investments to earn a high return, the Spectrem Group report finds.
Women are a driving force in the financial decision-making process for most U.S. households, either in conjunction with a spouse or partner or by themselves, High Income Women Investors observes. This has ramifications for financial advisors working with these elite and highly-motivated investors.
Previous Spectrem Group research finds that among the benefits women cite in working with a financial advisor, the highest percentage (69 percent) said that it improves their knowledge of investing. Six-in-ten said that the key benefit of working with a financial advisor was that it boosted their investment returns and afforded them a wider range of investment opportunities.
In working with high income women, it is incumbent upon financial advisors that they discuss investments with these aggressive and well-informed investors in a manner that goes beyond a “trust me” type of relationship, the Spectrem report finds.