We have anecdotal evidence of women becoming more involved with financial planning. Although the increase is encouraging, it’s not enough. It is known that women are under pensioned (the CSO indicates that they are 80 per cent more likely to be impoverished at age 65 than men) and underinsured. We all know about the wage gap. It’s been well documented. Perhaps we didn’t know that according to a UK-wide survey conducted by Halifax, this inequality exists from a young age, with reports on the amount of pocket money given to children that boys receive 13% more than girls.
We know women live longer than men and are more likely to live alone at some point in their lives, which means they must be able to manage their own finances. Women may also have gaps in their employment as they take time off to rear children or care for ageing parents.
The idea that men are the breadwinners is now utterly outdated, as is the idea that women are not best placed to make financial decisions. As a matter of fact, in our view, once women engage in the Financial Planning process, they are very effective at managing their money. Although there may be nuances in the way women and men think, whatever the ‘why’ is, there is a strong underlying emotional component to money decisions, and women are often more in tune with this.
We believe that the biggest hurdle for women to take an active role in financial planning is not in their ability to manage money but in their confidence in their ability to achieve their financial goals. It is for this reason, I was prompted to write this article because we see many reasons why women should be more confident as not only are they naturally good at financial planning they rock at it!! Here’s why:
- Women are very willing to be educated. An Armetis Strategy Group study showed that younger women feel strongly that they have received more financial education and are more attuned to financial decisions than their mothers were.
- Women are organised and are naturally good at budgeting and prioritising this is evidenced as, traditionally, they manage household expenses on a limited budget.
- Women are generally not competitive in nature and, therefore, not inclined to allow behavioural biases to affect them when it comes to financial decisions and investing, albeit when they start on the investment journey, they need support and coaching in terms of taking on more risk.
- Women have a lot of self-control and are not inclined to dip into long-term investments.
- Women take time to weigh the pros and cons of their decision and are generally quite calm while making a critical choice. This attitude helps ensure women make rational financial choices that have a long-term impact on their financial well-being.
We do not want to create a male-female divide. We merely want to let women know regardless of their experience, they have developed a gift for financial planning. Quelle surprise!