In my years as a financial adviser, I’ve generally found women to be more cautious about money than men — often at the expense of higher investment returns.
They are also cautious in where they turn to for advice — trusting relatives and friends over licensed professionals. That too has significant risks, namely that the advice they receive is incomplete, untailored or just plain wrong.
Understanding women’s experiences of money, work and life are key to improving how we, as an industry engage with them.
Growing business presence
Women in business are a high-growth market, as more females take on senior leadership roles and embrace the benefits of entrepreneurship.
For instance, a 2015 government paper noted a 46 per cent rise in women business operators over the preceding two decades.
That means more income, more surplus cash for investment, and more need for advice.
Gender inequality
Australian women today earn on average 14.1 per cent less than men — a difference of $263.90 per week or 60 work days annually. That translates into less superannuation too.
Women also account for 70 per cent of primary carers — for children and elderly parents/in-laws, eating into their ability to sustain paid work (especially full time) and creating a bumpy path through working life.
Combined, these factors contribute to a belief they have less need for financial advice. (The irony being that with less resources and greater career instability, they’re actually more in need of advice.)
Relationships
Intimate relationships have a significant bearing on a woman’s earning capacity and ability to create wealth.
From the 2021 census, we know there are:
- Over 2.4 million divorced or separated people.
- Over 1 million single parent households, around 80 per cent of which are female parents.
- Over 1 million widowed Australians, again with 80 per cent being female.
- Almost 24,000 same-sex marriages, almost two-thirds of which are female couples (two women often means twice the pain from gender pay and super gaps).
With these figures in mind, consider how catchphrases like ‘mum and dad investors’ and strategies geared entirely towards them have the power to alienate millions.
Homelessness
Women are fast becoming the new face of homelessness.
In FY21, 60 per cent of Australians seeking Specialist Homelessness Services were female. Among those aged 55+, 13,300 were women — well above the 10,600 men of the same age group.
The causes are likely numerous — including widowhood, divorce, domestic violence. Yet, I would bet that a lack of tailored financial advice played a part.
So how do we as an industry better engage with women?
I recently outlined some ideas for breaking down barriers for female advisers, and many of the same concepts ring true for female clients.
- Higher numbers, greater visibility of female advisers. My masters research showed that women are often fearful of advice from men. For the same reasons that many women prefer female doctors and gyms, having access to a female adviser, and seeing more women held in high regard within the profession, sends a powerful message.
- Financial education. We can play a more proactive role in financial education and better communicate the need for everyone to take charge of their own financial affairs before it’s too late. I regularly speak at events and published two books for just this reason — to help Aussie women realise they simply don’t know what they don’t know about money matters, and to empower them to do something about it.
- Conveying value. That many Australians still don’t understand exactly what we do and why is a travesty; one which only perpetuates the myth that ‘financial advice is not for me’.
- Improving reach. We need to better reach women where they are — the ‘let them come to us’ mindset has been tried, tested and proven ineffective. Women typically talk to each other — about EVERYTHING. Which makes us a powerful referral network to tap into.
Yet perhaps the most important element of all is relevance. As an industry, we simply can’t engage with more women if we aren’t seen as relevant to them.
This means better understanding their financial goals and pressures. Developing more bespoke risk prevention strategies. Adapting our marketing approaches. Being more accessible and visible to women. Giving them materials to learn and share and grow.
Because the benefits to our clients, our businesses and our society are too big not to embrace.
Helen Baker, financial adviser and founder, On Your Own Two Feet
