Originally posted via forbes.com – https://www.forbes.com/advisor/banking/wells-fargo-affluent-womens-study-financially-resilient-yet-crave-better-guidance/
According to a new survey from Wells Fargo, released on International Women’s Day, women are resoundingly prepared and resilient when faced with emotional and financial crises. However, that’s not the result of financial education or professional support—areas that survey respondents found lacking.
Instead, Heather Hunt-Ruddy, head of business development and growth at Wells Fargo Advisors, attributes women’s resiliency to a combination of experiences and historical inequities that have demanded that women rise above the day’s circumstances and endure.
“[Resiliency] is baked into our DNA,” says Hunt-Ruddy. And that resilience, especially in finance, speaks to women’s ability to believe in and then plan for better days ahead—even in the thick of a pandemic like Covid-19.
Women Are Anxious
According to the survey, women’s earning capacity is now outpacing that of their partners, with 32% of Millennial and Gen-X women respondents stating they’re the primary breadwinner in their household. Yet, even with 54% of respondents saying that their earnings equal or surpass those of their spouse, women are more anxious than ever about their financial futures.
More than two thirds of women ages 24 to 55 said they get extremely anxious when there is a lot of uncertainty and 49% of women ages 56+ reported the same feelings. Current data says those fears aren’t unfounded.
On Monday, U.S. Treasury Secretary Janet Yellen spoke of the outsized impact the Covid-19 crisis has had on women, with more than 2.5 million more women leaving the job market between February 2020 and January 2021.
When women leave the workforce, especially to take on caretaker roles for children or aging parents, they’re not paying into Social Security or contributing to employer retirement plans. These trends mean that not only will the gender pay gap persist, but also women’s retirement savings will continue to be outpaced by men who have suffered fewer sustained job losses during the pandemic.
But women aren’t sitting idly by as shutdowns and labor market shifts continue to ripple through the daily lives of Americans.
“Women are looking for more education and conversation about their finances,” says Nancy Amick, senior family dynamics consultant with the Advice Center within Wells Fargo Wealth and Investment Management.
Despite 34% of Millennial and Gen-X women feeling that they didn’t receive a solid financial education while growing up, the Wells Fargo survey shows that 77% of women are taking up the financial education mantle. Mothers are ensuring that conversations about money start at home, so their children can be prepared for whatever the future might hold.
“Women learn from experience and are paying it forward,” says Beth Renner, head of the Advice Center for Wells Fargo Wealth and Investment Management.
How Planning Plays a Key Part in Women’s Financial Futures
There’s one set of conversations where women need others to pay it forward in their direction: those they have with financial advisors. Nearly half of women ages 24 to 55 and 31% of women ages 56+ said they need financial advice now more than ever, and 67% report that having a financial plan helped them weather the past year’s unpredictability. There’s a disconnect, however, between the advice women need to craft a plan effectively and what financial advisors typically tee up.
“In some cases, all this industry wants to talk about are returns and performance,” says Hunt-Ruddy. “For women in particular, they want to talk about more than just those things.” She says it’s not that returns and performance don’t matter. But those details matter more when put into a real-world context, such as putting a child through college or paying for school when a child gets into a better college than planned.
“It’s frustrating that the financial industry hasn’t yet learned that they need to talk about more than just finance with women,” Hunt-Ruddy says.
The Wells Fargo survey found that women want to take a more holistic approach: to talk about finance as it relates to their lives, not solely about how much money an advisor will make for them. The top conversations Millennial and Gen-X women want to have with financial advisors beyond the numbers include:
- Work (78%)
- Family (71%)
- Health (60%)
Hunt-Ruddy says that it’s important that women self-advocate in these conversations with financial professionals but acknowledges that intimidation is a significant factor in how comfortable women feel talking about money.
“There’s a fear women have of looking stupid or appearing that they don’t know what they’re talking about,” says Hunt-Ruddy. Women may also fear being judged for making bad decisions in the past or getting labeled as pushy or difficult when asking tough questions of an advisor.
Hunt-Ruddy advocates for women to push those fears aside and not be afraid of leading conversations when interviewing potential advisors.
“You have to be okay with not being labeled the ‘good girl,’” she says. And when an advisor doesn’t seem to be listening or connecting, it’s okay to keep looking until you find an advisor who listens, cares and connects your financial life with the life you’re living and aspire to live.
“Keep going until you find the right person, because a great financial advisor can be the difference between surviving and thriving,” Hunt-Ruddy says.
And women should never feel as if they have to settle or merely survive when it comes to their finances. What good is being resilient if you can’t bounce back and find a better way forward?
Better Ways Forward
While the Wells Fargo survey primarily addresses women who identify as emerging affluent or affluent, few women reach those economic security levels without having started with less than they have today. The important thing for women to know is that no matter how much (or how little) money they have today, there’s always a way to start planning for their financial future.
If professional financial help seems out of reach or unaffordable, Hunt-Ruddy says women can tap into newer financial tools like robo-advisors to make a financial plan and start investing. Robo-advisors allow investors to make a plan tailored to their investment horizon and risk tolerance. Some plans also incorporate economic, social and governance (ESG), so women can be confident their investment dollars back their values.
“One of the best advents of robo-advising is what it can do for the smaller investor,” she says. “The recommendations are somewhat tailored and take emotions out of [the investment process].”
With small amounts, investors can get a big start on their future and create a financial plan and portfolio that can later be transferred to a traditional financial advisor when the time is right.
“When your financial situation gets more sophisticated, that’s when you get a human being’s advice,” Hunt-Ruddy says.
From Surviving to Thriving
If the Covid-19 crisis has made anything clear, it’s that connections with other people can make all the difference. The connections women make in their financial lives can only strengthen their resilience and help them craft plans that will help them equally weather the storms and bring into crisp view the lives they imagine. That reality is, indeed, what better and more hopeful days look like for women everywhere.
