This article appeared in The Weekend Australian 19 June 2021.
Women need to have control over the key financial decisions in their lives.
Women and men should have zero tolerance for financial advisers who don’t work with them equally.
Yet a recent UBS report (Building bridges, breaking barriers) revealed that half of married women defer long-term financial decisions to their spouse and that only 20 per cent of couples make long-term financial decisions together.
At the same time the report showed more than 96 per cent of all couples agree women should be more involved in long term finances. It also revealed that more than half of all women who defer say ‘‘I wish I was more involved’’. This struck me as both shocking and alarming.
It’s shocking because it’s so unlike the clients I have known over 25 years of financial advisory practice.
The clients I have advised largely do make their long-term financial decisions together. And the women I advise are central to the key decision-making about homes, children, education, entertainment, travel, healthcare, aged care, retirement, wealth transfer and legacy.
It could be that as an older female adviser, I have attracted a less representative cohort of clients than others.
Many clients tend to be business people or executives actively involved in shaping the lives and legacies of their families, and I have probably attracted a larger share of clients where the female leads the decision-making and, importantly, where the male wishes the decision-making to be shared equally.
The UBS report is alarming, too, because it suggests that the trend to defer to men is getting worse. While 40 per cent of boomer females are deferring financial decision-making to their spouses, that number grows to 47 per cent for Gen X and 51 per cent for Millennials.
What is going on here? Have these women never heard the old saying that a man is not a financial plan!
It is important to remind us all that financial plans are not an end in themselves, they are just one of the important enablers of life and legacy plans for all individuals and families. They are a key means to help us achieve our life purpose and meaning.
Who wouldn’t want to participate in that if they could? And who wouldn’t seek an adequate understanding of the key aspects of long-term financial decision-making to prepare for the likelihood, at least some day, of being the sole financial decision-maker?
Financial advisers clearly have a vital role to play here. We need to make sure we continue to attract and retain plenty of female and male financial advisers who understand the importance of shared financial decision-making throughout a financial advisory relationship.
Our financial system may not have been designed particularly for women, but that does not mean that women can’t gain mastery of the key moving parts and direct the financial aspects of life to serve the purposeful lives they wish to live.
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For example, superannuation has had to be retrofitted to accommodate broken work patterns for women as its design assumed a largely uninterrupted work pattern.
Female clients of financial advisers, here is your checklist. You should:
- be treated equally by the financial adviser;
- be included in discussions and meetings with the financial adviser, and expect the language and concepts used in the provision of financial advice to be meaningful to all;
- understand the impact of the financial decisions being required of you;
- feel comfortable to ask any and all questions of a financial adviser;
- be included in the decision-making and authorising of financial decisions; and
- have all issues and concerns responded to by the financial adviser.
If any of these things are not happening to female clients, whether in a couple or not, the financial adviser needs to address them as a matter of priority.
Women don’t need to become financial engineers, just as we all don’t need to become car mechanics or heart surgeons.
But we all need to have mastery of the key financial decisions that have a major impact on our lives, whether it’s at the prevention, ‘‘first aid’’ or major intervention stages.
A capable, caring and trusted financial adviser can help prevent financial mistakes, help protect and safeguard your most important assets, help you maximise those assets over your lifetime and help transfer those assets to your chosen beneficiaries.
As women gain increasing ownership and control over investable assets, women (and men) will seek out those financial advisers who work with them as equal primary clients.