It’s a wealth management paradox.
Women currently control $10 trillion of wealth in the U.S., an amount expected to
Granted, in studies, reports and white papers, analysts take care to point out the very real obstacles women — single women in particular — must scale in order to reach the same retirement plateau as their male counterparts. But much of that literature also contains a parallel message suggesting that a woman wealth-builder’s biggest enemy is — herself. Women are portrayed as indecisive, cautious, anxious and risk-averse, with lower levels of both perceived and real financial literacy when compared to men, as seen, for example, in this 2017
"Women have more financial earning and decision-making power today than ever before and yet, too many limit the benefits of that power by shying away from taking control of their financial futures,” wrote Kathleen Murphy, president of personal investing at Fidelity, for the release of a report titled
Experts can also use language familiar to readers of old-fashioned women’s magazines, zeroing in on perceived character flaws and offering self-help-like solutions. Such language can be
One danger of this negative feedback loop is that the most desirable high-net-worth women may not recognize themselves in the stereotypical images they see reflected back at them. It also risks distorting an advisor’s view of their clients and blinding them to emerging sectors of wealthy single women and their unique needs.
Melissa Joy, president of Pearl Planning in Dexter, Michigan, is careful to assume a high level of sophistication about the clients she works with. “When you’re advising a woman managing a multimillion balance sheet at work, I don't think you start by saying, ‘Let's print out your grocery budget.’ We're diving deep into high-level retirement topics, and in a very approachable way, but also in a way that respects their intelligence and their capabilities.”
Financial advisor Nicole Middleton Holloway, founder and CEO of Strategy Squad in the San Francisco Bay Area, which partners with RIA Natural Investments, sees a growing and “pretty underserved” demographic in her practice: single-women inheritors. These clients, Holloway says, “are very worried about things like climate change, wealth inequality and similar issues, and so the main planning [task] is [to determine] what they really need and how much they can give away.” Such clients often feel conflicted about how they've inherited their money, which makes exploring those issues an integral part of crafting a financial plan, she says.
Holloway says she caters to another emerging niche of single women: high-earners who hail from working- or middle-class families. Such clients, she says, often want help planning an off-ramp from the corporate grind fairly early in life. That’s because, although they may be in their 20s and 30s, “It’s like they’re in their 50s or 60s because even if they don’t have children, they’re sole caretakers of parents — or even siblings — because they’re the ones that went out and got a good education and good jobs ... and therefore they're not only worrying about their own financial affairs but also the financial affairs of [others.]”
Women retiring solo
Unmarried women without children can find themselves at a singular disadvantage trying to save enough for a secure retirement, says Kimberly Foss, president and founder of Empyrion Wealth Management in Roseville, California. Often, “they have no one to rely on but themselves as they deal with the inevitable effects of aging and the related increases in medical costs,” she says.
It’s a prospect they can face with less money than their single-women-with-children counterparts, Joy points out, as they absorb financial setbacks taking time off from work to care for their parents, “and then they have no one to care for them when they are old so they may have to play catch-up to bridge that gap.”
Foss recalls one client poignantly telling her: “I left the workforce for several years in order to take care of both of my parents when they had major medical difficulties. ... But I don’t have a ‘me’ to take care of me.”
Almost nine in 10 estate planners say women clients either lost their jobs, had their salaries cut or left the workforce during the pandemic, a study shows.
Jess Bost, an advisor with Consolidated Planning in Martinez, Georgia, says the fact that women earn less than men (currently
Bost says it all comes down to the spreadsheet: “If they don't have the cash flow to put away in their 401(k) … we're not only having a discrepancy in the current ability to build wealth but for the long term.”
The solution is easy to understand but difficult to pull off, she says. “[It’s] being savvy at how to keep the dollars you've earned and how to make more of those and keep more of those.”
The gender cash-flow imbalance is one reason the industry isn’t taking a more clear-eyed view of a demographic that will soon control a $30 trillion block of assets, Bost says: Women currently don’t have the level of assets men have, nor can they make up for that shortfall in planning fees.
Since no institutional fixes are on the horizon, it’s up to advisors and their clients to fill in the gaps.
“Understanding and seeing our choices and then being empowered to make the one that best serves us is going to get us much further down the road,” Bost says. “Not only crunching the numbers with [clients] but really teaching them to feel empowered in their decisions is a big part of that.”
