How to talk tax with female clients

While in-person meetings have effectively been banned, the rise of technology-based solutions has enabled advisers to reach clients regardless of lockdown restrictions.

Amid all this, Succession Wealth is one firm that says it has seen more women emerging with specific financial planning needs.

While many women have been juggling caring responsibilities and full-time work over the past year, they have also been more keen than ever to be engaged and focus on their savings and investments, according to Michelle Crowley, wealth planner at Succession Wealth.

FTAdviser In Focus caught up with Crowley during the month the world celebrated International Women's Day to ask what advisers can do to motivate more women to get to grips with their finances, as well as to reach more clients in this group. 

FTAdviser: How can we get more women to engage with their finances?

Michelle Crowley: It is a case of keeping the message out there, through social media, through articles, giving people the opportunity to understand what they're missing out on.

Most of us go on through life without understanding or knowing that we are missing out on important financial information.

We still have a long way to go in bridging that gap.

FTA: Do you think younger women are more engaged now than their older peers?

MC: Definitely; at the early stages of women's careers, I find that they are far more in control of their finances. They are conscious of what they want to save for, such as putting down a deposit for a first home.

However, they also tend to be on lower salaries and not putting enough aside into their pension.

But when they progress and start earning more and setting more aside, they tend to then get married and have children, so the savings get put on hold.

When that happens, I find that one person in the household tends to take more control of the finances, and that tends traditionally to be the father. 

This isn't a bad thing, but because the men are [often] the ones working full-time and contributing possibly more to the household finances, then financial planning tends to skew towards the man's financial planning needs.

Women need to remember that they ought to keep focusing on their own financial futures, on their pensions and [if they have been out of the workforce] buying back national insurance contributions, for example. It's about balance.

FTA: What other kind of practical steps can a woman take, even if she is taking time out from full-time work to raise a family?

MC: Making sure that contributions are being made, focusing on protection, making sure your NI is up to date - being aware of all these things and more is very important. Mothers need to stay on top of their finances, even if they are taking a break to bring up children or take on caring responsibilities.  

FTA: When it comes to taxation and understanding personal allowances and reading tax codes, is there a way to reassure certain clients that these are common problems?

MC: From my experience, everyone seems to struggle with that. It's not just women.

But it does tend to be that one person in a relationship will be more engaged with finances, and therefore tends to have a better understanding of taxation and financial planning. This is something we need to address so that everyone has more knowledge. 

FTA: What sort of tax reliefs are often forgotten about?

MC: The marriage allowance - absolutely. The marriage allowance lets you transfer £1,250 of your personal allowance to your spouse or civil partner. This can reduce their tax by up to £250 in the tax year. But people forget to claim this - even my own mother!

Unless you know about these tax reliefs, it is easy for you to miss them so we need to promote these messages.

FTA: Generally, those in financial difficulty tend not to have a financial adviser. What can you do to help those who sit outside the advised space?

MC: Everyone assumes they can't afford financial advice, but that is not the case. Many advisers would be happy to provide one-off advice and help people, even if there isn't a long-term financial relationship.

I also think this needs to be brought into schools. People need to be reminded from an early age of the importance of getting to grips with money.

And encourage people to seek advice - we ask for help with other things in life, so why are we so afraid to ask for help with our finances? This needs to change.

FTA: Have we lost some of that 'personal touch' when it comes to women's attitudes to money? Back in the day it would have been my grandmother in charge of how my grandfather's money was spent and saved, and in charge of the insurance policies.

MC: In some ways, I think so. My grandmothers, for example, were very much in control of the household budget.

Maybe now while women are trying to balance careers and caring for children, I think that it might come down to a timing issue - looking after yourself and looking after your finances can fall to the bottom of the list. 

FTA: Has video conferencing helped you to talk to the 'whole' family now, post-Covid? What sort of positives have come out of the pandemic, in your view?

MC: One of the things coming out of Covid is that [many] people haven't spent so much, so they have a bit more put away than they would have done in a 'normal' situation. We have saved on the big spending by not travelling or eating out. 

That said, it does seem that women have been spending a bit more of those savings than men, because we have been juggling so much and thinking of different eventualities - is the childcare sorted out, does the family have everything it needs for the next month?

Because women often juggle so many different responsibilities, we might be more inclined to put our money to work for the family, instead of making it work for our pension saving.

We must not put ourselves at a financial disadvantage, however, and we still have a long way to go in bridging that gap.

simoney.kyriakou@ft.com