As women become increasingly wealthier, they present a huge untapped market for advisors to target. That’s the good news. The bad news is that women aren’t saving enough or planning enough. And that’s why it’s critical for advisors to offer their services to women.
Studies show that women own or direct half of the nation’s wealth and make up about half of the managerial and professional positions in the United States today, said Mary Quist-Newins, CFP, ChFC, CLU, FIC, State Farm Chair in Women and Financial Services at The American College. Other reports show that one in 11 women are entrepreneurs, and one in three earn more than their husbands, Quist-Newins said at the 2008 NAIFA Convention and Career Conference. Today, women own almost half of all privately held businesses.
All these numbers suggest that women have more money to invest, more wealth to protect, and make qualified prospects for advisors. “This means there’s more revenue for you [advisors],” she said. Areas where advisors can target women include succession planning, group benefits, etc.
The other side of the coin
The above statistics represent only one side of the women’s market, though. Studies also show that older women in the United States have the highest poverty rates among all industrialized nations. In fact, women make up 70 percent of the U.S. population over 65 that is living in poverty. In 2006, the median income of women in the age group of 65-74 was $14,079, whereas the median income of men in the same age group was $26,273.
Adding to these troubling figures are several other risks that women face, such as longevity, low savings, care-giving duties and financial literacy. Women live 5.3 years longer than men, according to the 2007 National Center for Health Statistics. Women earn less than men ($.80/$1.00) and only 30 percent of women (vs. 48 percent men) over 65 have pensions. They spend 12 years out of the workforce on care-giving activities. Women also have low financial literacy. Eighty percent admit not knowing enough about retirement, and most are unaware of their human life value, Quist-Newins said.
“There's opportunity to grow our business, but we also have the responsibility to educate our women clientele,” she said. According to a survey, only 21 percent of women said they are working with financial professionals.
Working with women
However, women are receptive to advice. “The more money a woman has, the more likely she will seek advice,” Quist-Newins said. But studies have shown that many women don’t trust financial advisors because they feel “advisors do not listen to them and understand them.”