There’s good news; according to research commissioned by ING DIRECT, women are becoming increasingly confident when it comes to financial decision making, with 27% of women making the majority of financial decisions in their household, and only 1% of women deferring financial decisions to their male partner. Additionally, households in which the male is the main breadwinner are now in the minority, representing just 46% of households. Many households report equal financial contribution between partners and 11% of women report contributing substantially more than their partner.
Sisters doing it for themselves
While women are financially independent in both earnings and decision making, it would appear that the financial services industry hasn’t yet caught up with this demographic trend. The ING DIRCET Women & Finance report found that just 31% of women receive professional financial advice, perhaps because the industry has focused on investment growth message at the expense of investment preservation.
“Women identify with feeling a responsibility to preserve wealth, particularly inherited wealth, and to leave a legacy for the next generation. For women, the focus is often on ‘making it last’ rather than ‘watching it grow’,” said ING DIRECT Executive Director of Customer Delivery, Lisa Claes.
“Sometimes the best solution is not the one which delivers the highest investment returns and it’s important that the financial services industry recognises this and adapts its approach to address some of the intangible factors that are important to women, such as consistency, longevity and security.”
Same destination, different journey
Bruce Brammall, author of Mortgages Made Easy and managing director of Bruce Brammall Financial said that the days of blokey marketing messages in financial services should be long gone.
“The first principle of financial planning is to know your client, to understand their goals and objectives. If your client is a couple, that means ensuring that you understand the goals and objectives of both individuals,” Bruce said.
“Women do have different needs. They are often, but not always, more conservative in their outlook for what they want their money to do. And I think women understand the base need for insurance better than men. They worry more about disaster striking them, or their family, and therefore understand the importance of financial protection better.
“I’ve found that single women, in particular, are more likely to seek out professional advice when it comes to their finances. Many accept that learning the intricacies of the world of finance is not a priority for them, so they would rather pay someone else to get it right, rather than blunder along making their own mistakes.
Bruce likens it a bit to “asking for directions” when driving. “Men, in general, are more likely to keep driving to find it. Women will stop and ask someone for directions.
“While almost everyone could benefit from professional advice, women often need a bit of extra advice in the superannuation department, to help build their balances, which are often smaller than men’s because of time out of the workforce and pay inequity.”
Wealth could learn from fitness
The ING DIRECT report points out that change can be profitable, using the fitness industry and travel industry as examples.
The tourism and fitness industries have made, for some time, deliberate efforts to target women and accommodate their needs, and they’re now reaping the financial rewards.
Women, who were once neglected by the fitness industry, now represent over half of the 4 million Australians who participate in fitness industry activities.