Women, Money and Planning for the Future

Women today are reaping the benefits of greater access to education and more opportunities for career advancement. They now hold the majority (52 percent) of management and professional positions in the U.S.; own 30 percent of all private businesses; and are the primary breadwinners in more than 40 percent of U.S. households (a four-fold increase from 1960).¹ They also control 51 percent (around $14 trillion) of personal wealth today² —a number that is expected to grow to $22 trillion by 2020.³

One particular segment — Baby Boomers — is more financially empowered than all previous generations, having accumulated wealth through corporate employment, family businesses, marriage, inheritance and investments made during the “boom” years.

This translates into an increasing number of women who are responsible for making key decisions about their financial future and that of their families. And in doing so, they face some unique challenges:

• On average, women tend to live longer than men and generally earn less over their lifetime.
• They’re often the primary caregiver (66 percent), which can lead to taking a “less-demanding” job (16 percent of female versus 6 percent of male) and working fewer years in their profession.⁴
• Rising healthcare costs disproportionately impact women.
• When it comes to financial planning and investing, women tend to be less self-assured — only 8 percent say they are confident in this area.⁵

All of these issues influence a woman's ability to earn and save throughout her lifetime. This is why it’s so important to set clear financial priorities and consider working with a financial advisor to help you reach them.

Thinking about working with a financial advisor? Here are some tips to help you find the right one:

Consider your needs: Are you interested in general financial advice or specifically in investing? Perhaps you’re gifting stock or saving for a child’s education. Or, maybe you’re single and need insurance coverage that will provide a safety net should you become ill. Or, you may want to prepare for retirement and review all sources and methods to fund your future plans. Your answers to these questions can help guide you towards the right type of financial advisor. Many financial planners are also investment advisors, but not all investment advisors or their firms offer financial planning. Some firms offer both financial planning and investment services, so be sure to ask.

In general, financial planners help you plan your finances for the future. You can expect to discuss such questions as: Am I saving enough for my retirement? What role do loans play in my overall financial picture? When and how should I start taking social security?

Investment managers assist with your financial plan implementation by helping you choose specific investments to create a portfolio based on your unique goals. Typically, an investment manager will help you select investments and monitor/rebalance assets based on your objectives.

Ask the financial advisor about licensing and compliance: Good questions to ask include: What licenses and professional designations do you hold? Do you adhere to fiduciary or suitability standards, or offer both?

In the financial industry, there are currently two standards of care — fiduciary and suitability. Advisors with a fiduciary responsibility are obligated to put their client’s interests first. With those operating under the suitability standard, the requirement is to recommend investments that are suitable in terms of the client’s financial needs, objectives and unique circumstances. It is also helpful to know what securities license registrations a financial advisor holds. Registrations, along with the investment professional’s background can be verified at FINRA Broker Check.

Find out how you are charged for services: There are typically three approaches for investment services fees: An asset-based fee when the investment advisor makes all investment decisions on your behalf based on your goals; a fee for the investment product selected by the client based on brokerage-assisted advice, or a self-directed platform for those investors who will make decisions and pay for purchases and sales entirely on their own. Fees for a financial plan may be a flat fee — by the hour or as part of an overall fee for investment services. By talking with your advisor about your individual needs and goals, you can decide which approach or combination of approaches is best for you.

So, how do you find a financial advisor to ask the above questions? Seek out referrals from friends, family and colleagues. You should also consider alternatives to the traditional brokerages and big banks, such as an independent financial advisor, community bank or credit union, where the account minimums are often lower and the service more personalized. At Tech CU, for example, investment relationships can be opened through Tech Wealth Management⁶ with as little as $25,000 and with the standard of care you choose. And, individuals are eligible to become a private banking member with just $100,000 in combined assets (which can be met in several ways, including having an investment account or mortgage with us).

Bottom line: There are many types of professionals who can help manage your money. The most important thing is to establish priorities, then find an advisor who will take the time to understand your unique challenges, needs and goals while developing a sound plan to help you reach them.