2014/06/30. Should we be talking about women at all? Financial Planning for Women FPI Convention June Sunél Veldtman CFP CFA

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1 Should we be talking about women at all? Financial Planning for Women FPI Convention June 2014 Sunél Veldtman CFP CFA Authorised Financial Services Provider Scores of recent studies show that we re in the midst of a tectonic gender shift around money: It s big, slowmoving and ultimately a gamechanger. Women have money now, real money: They earn a combined $29 trillion worldwide, according to the Boston Consulting Group, about $3 trillion of that in the United States. And while men still earn more, women control nearly three-quarters of all purchasing decisions. Judging by other economic indicators, those numbers will only grow. Source: The New York Times; Mars, Venus and the Handling of Money, Changing family dynamics From the Brady Bunch to Modern Family Janet Yellen, head of the Fed Hillary Clinton Melinda Gates, Cochair of the Bill & Melinda Gates Foundation Traditional family Us four and no more Same sex marriages Divorce Mixed race marriages Angela Merkel, Chancellor of GermanyDilma Rousseff, President of Brazil Sheryl Sandberg, COO of Facebook Marissa Mayer, CEO of Yahoo 1

2 Financial planning for women 70% of married women fire their advisors after their husbands deaths Understanding women Pursuing women Planning for women Source: Spectrem Group Study of Wealthy Investors, June 2011 Understanding women What is unique about women? P L A N Communicate Care P U R S U E Connect Women and Society Childhood messages Lack confidence Lack knowledge Feel insecure 2

3 Men are better at handling financial matters than women are Women have a lower risk appetite 29% of women agree Source: Old Mutual Savings Monitor, 2012 Focus on Women Source: Prudential Research Study, Irrational insecurity Bag Lady Fear The number of women feeling financially insecure: Women earning more than $ per year with Bag Lady Fear : 50% of wealthy women Source: 2006 Alliance Survey Source: 2006 Alliance Survey Mothers earn less than men Earnings for mothers of the same age and education level are only 70% of men s Source: Ann Crittenden, The Price of Motherhood 3

4 Women feel burdened with their current level of decision making Nowadays women outlive men by about five to six years. By age 85 there are roughly six women to every four men. At age 100 the ratio is more than two to one. Source: Nielson Q1 Global Outline Survey - Scientific America Implications of longevity Women need more capital at retirement Women need to work for longer Women have higher medical expenses over life time Women end up single Bigger likelihood of running out of money "Models of investor overconfidence predict that men will trade more and perform worse than women... we document that men trade 45% more than women, and earn annual risk-adjusted net returns that are 1.4 percent less than those earned by women. Source: UC Berkeley, "Boys Will Be Boys by: Brad Barber of UC Davis and Terrance Odean Pursuing women If you talk to a man in a language he understands, that goes to his head. If you talk to him in his language, that goes to his heart. - Nelson Mandela 4

5 To share experiences What language means to women Self-disclosure is the most precious badge between females they confide in To find things in common each other about their most personal To truly feel they ve been understood doubts and difficulties. - Leonard Sax, Why Genders Matter Engaging with women Socialising and marketing for men Status Socialising and marketing for women How to connect with her Join her network Community Use level communication vs. hierarchical communication - Tell true stories Connection - Let her see herself as your client Meeting goals Educate, empower and entertain 5

6 Meet Anne A woman s balancing act The number of women citing demands on time as the number-one challenge: Almost half Source: Boston Consulting Group survey, 2009 Make it easy for women to do business with you Meet Barbara Acknowledge her time constraints How can I save time? Phone weapon of mass organisation - How easy is your website to navigate? - How do you invite her to functions? - How easy are your reports to read? Help her make meetings worthwhile - Prepare in advance - Checklists Planning for women Not all women are the same 6

7 Women more likely to rely on advisor input than men Have said they plan for only their finances 52% 50% Wonder if they have done enough to secure their retirement 73% 75% Think they need more education to handle their finances 66% 73% Worry that if their partner leaves, they won t be able to cope: partnered respondents 30% 56% Would like financial advice but find it hard to find someone they trust 42% 47% Believe saving for education is more important than saving for retirement 49% 52% Source: Old Mutual Savings Monitor, 2012 Focus on Women Source: Prudential Research Study, Women who use advisors feel different Financial planning for women Understand her goals & show her how she can meet her goals Be mindful of dueling needs Longer time horizons Need more retirement capital with lower earnings Remember that she is likely to end up single Encourage risk-taking through education Need for risk planning Source: Prudential Research Study, Financial planning done well Where to find these women Beneficiaries of policies Wording of divorce agreements Business risk planning and buy-and-sell insurance Drafting of wills Dread disease protection Look at your client base Include your current clients spouses & partners Pursue relationships with divorce attorneys / estate planners Employ women 7

8 Decision-making How do we attract women to financial planning? Gather Validate her questions and concerns Promote the profession as an excellent choice for women Mentoring, promoting and nurturing Sales vs. relationship culture Make perfect decisions Evaluate options Flexibility and leave policies Role models and women s networking groups Affirm her decisions & give practical advice Speak to her friends & family Mars & Venus we are from different planets Sunél Veldtman CFP CFA e: sunel@sunelveldtman.com w: w: Buy Manage your Money, Live your Dream: