Women have made their mark in many fields, often simultaneously running a company and playing supermums to their children. But many women still take a backseat when it comes to taking larger financial decisions.
While this cannot be generalised, our research has shown that, while more and more single women in the age group of 18 to 30 have been taking financial advice and are in much better control of their finances, in a married couple, it is often men who take the lead in taking larger financial decisions.
At Money Management, we sent out a questionnaire to financial advisers. Forty three per cent said it is generally men among their clients who took the lead in financial planning, while 30 per cent said it was women and the remaining 27 per cent said it was a joint effort. Chart 1 shows these responses.
“In many couples, the woman takes the lead but in general men take the lead most of the time,” says Gordon Bowden, director at Buckingham-based Quainton Hills Financial Planning. “In some couples the man appears to take the lead but the woman is more financially aware.”
Recent research conducted by Aegon says just 5 per cent of women in the UK are on track to achieve the retirement they would like. Of the 4,000 respondents, only 29 per cent of women felt confident about being able to retire when they want to, compared with 45 per cent of men. More than 54 per cent of women consider their company pension to be their main method of saving for retirement, as opposed to 57 per cent of men.
In the know
However, the research also revealed that 64 per cent of women do not know how much their employer is contributing to their workplace pension, while 61 per cent admit to having never checked retirement saving – for men the figures are 54 per cent and 43 per cent respectively.
But the situation is not as grim as it seems, according to a number of advisers. “Since the pensions changes in April 2015 I have seen quite an increase in women requesting advice, especially on their pension provision,” says Glasgow-based IFA Clayton Cummings. “I have seen an increase in women that are either divorced or single seeking advice in relation to pension provision, reviewing the pensions they have built up, consolidation, and cash flow modelling, looking at the benefits they may receive in retirement.”
He further explains that the questions his female clients ask are centred on what these pensions do for them in retirement and if they should be adding more to them.
Are women in better control of their finances compared to men? “No, but I don’t think they are less aware either,” says Claire Walsh, a chartered financial planner at Horsham-based Aspect 8. “I think women engage differently and may have been put off by traditional financial services. They tend to think more about the overall picture of their lives and how the money will support that, whereas men do tend to focus more on the numbers.”
A number of advisers in our research also pointed out that women tend to exercise more control in day-to-day expenditure and are a lot better prepared during meetings compared with men.
Rowena Griffiths, a London-based chartered financial planner at Female Financial Limited says sometimes finding the right financial adviser is important for women clients. “Women often say they ‘didn’t like’ their previous adviser without being specific. When questioned they say that they don’t like feeling pressured into making decisions. I believe only one in 10 advisers are female and that can make finding a suitable adviser difficult.”
She further explained that women are more open about not understanding their finances and financial products than men – at least when they are with a female adviser. “I think financial products and financial services have become increasingly complex over the years and confused clients struggle to make decisions. Women are worried about making the wrong decision in case they don’t understand the product.”
Our research also showed that sometimes female clients prefer to speak to a female financial adviser since they like to feel that the adviser understands their position. Some respondents said that women can be shy in discussing finances and thus a female financial adviser helps in establishing a comfort level. “Often the ‘soft’ facts such as ‘I want to retire early so that I can spend more time with my grandchildren’ are more important than the hard facts,” says Ms Griffiths.
The big question then is, of the total clients advisers have, what percentage are women? We got some extremely interesting responses. As Chart 2 shows, just under half of respondents said 25 to 50 per cent of their clients were women, 33 per cent of advisers said 50 to 75 per cent of their clients are women, 13.5 per cent said 0 to 25 per cent are women, whereas just 1.3 per cent financial advisers said 75 to 100 per cent of their clients were women.
The majority of respondents in the last group were female advisers.
We then asked advisers what the biggest concerns for women were when they are planning their finances. The most popular responses included financial security and independence, protection, retirement planning and honesty in the advice.
However, some advisers said it was not right to generalise and that the aim to plan finances remained the same across both the genders.
“Financial security is what clients want – simplifying investments and pensions and all of their assets are generally a key theme,” says Jon French, an independent financial adviser at AW Financial Management. People tend to want to keep their finances simple, he adds, and he helps new clients coming in whether they are female or male. “A good return is something that clients want regardless of their sex.”
There are two sides to this debate: one points to low numbers of women taking more significant financial decisions, the second completely shuns the view.
Some advisers believe women are a lot more financially aware and independent now. However, several pieces of research have shown women to be lagging behind men in saving or taking financial advice. So what can be done to increase these numbers?
“Studies show that those clients with advisers are better off financially than those without, so I think clients need to be encouraged to take advice,” says Ms Griffiths. “The press is negative about financial matters. For example, in the case of pension freedoms, it concentrates on those clients who have been unable to access their pensions, rather than those who have managed to liberate £2.7bn so far this year.”
Some pointed to the need for better understanding for both sexes. “The curriculum is inadequate in schools for both men and women in teaching financial matters. Most grow up without a clue as to how the world runs in terms of banks and shares. So yes, a lot more does need to be done at education levels.” Mr French says.
Some advisers mentioned that more female advisers could help to increase the number of female clients. But while things can be done to increase numbers of women who don’t take advice, it is also important to look at the number of women who do.
Several reports have pointed to low levels of saving and advice for both men and women, so maybe it is time to look at an overall picture in order to increase these numbers.
