Patient. Research-driven. Steady under pressure. Focused on the long-term. These are all traits of investment great, Warren Buffett, known for his buy-and-hold strategy and his need to truly understand the companies he invests in.
If you ask him, the Oracle of Omaha admits that he shares these qualities with another demographic: female investors. In the male-dominated industry of investment advisors, women make up just 14 percent of advisors/brokers. While that number is growing, the demand for financial professionals (both women and men) with these decidedly feminine investment characteristics is increasing as well.
Gender-related issues like the wage gap, fewer high-earning years and longer life expectancy continue to be hurdles that women face when it comes to meeting their retirement and financial goals. However, when it comes to saving, most women tend to focus on non-monetary goals like their children’s education expense and caring for their aging parents.
Considering that by the year 2030 women will control two-thirds of the nation’s wealth, it’s vital to have investment professionals in your practice that have the communication and listening skills needed to relate to the natural caregiving and often more conservative traits that women have as well as the discipline to stay the course. Generationally speaking, women’s surging economic power is segmented and each segment requires specialized engagement.
Retired females expect an organized financial plan including income forecasting, philanthropic giving and legacy planning. For newly divorced or widowed women, essential conversations include budgeting and asset protection. Established professional women look to advisors for help with college savings and tax considerations, and millennial women are often concerned with financial literacy, debt management and systematic investing.
Currently, women earn a majority of both undergraduate and graduate degrees and account for 85 percent of all consumer purchases. Economy-wise, they could be considered one of the largest emerging markets in the world, yet for many women, investing can be intimidating.
Having a keen awareness of the monetary and non-monetary requirements that women have is something every advisory practice should be focusing on. An alarming percentage of women, from those just starting their careers to newly retired baby boomers, don’t currently have an advisor and, of those who do, a vast majority feel misunderstood by theirs.
Having a trusted financial professional who takes the time to listen to individualized needs is crucial to a woman’s financial success. As market volatility appears to be the “new normal,” trading less and making more thoughtful, long-term investment decisions result in monetary benefits, including lower trading costs and higher returns. One study shows that men trade within their accounts 45 percent more than women, reducing their net returns by 2.65 percent as opposed to 1.72 percent for women*.
Closing the gap between men and women in this profession will continue to be an industry focus. If having more female advisors on staff results in researching more and trading less, then we all should prosper.
*Barber, B. and T. Odean. 2001. Boys will be Boys: Gender, Overconfidence, and Common Stock Investment, Journal of Finance
Carrie Wagner is the Director of Private Banking at UICCU Wealth Management and a Wealth Advisor with Commonwealth Financial Network. Her clients appreciate her extensive banking, lending and investment background as well as her genuine and thoughtful demeanor. Carrie holds FINRA Series 7 & 66 Securities licenses, Life and Health Insurance Licenses through the State of Iowa, and is an Accredited Investment Fiduciary (AIF®) designee with FI360 Global Fiduciary Insights.
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