A new study asserts that women feel uncomfortable discussing financial matters. The latest Money FIT Study from Fidelity Investments is generating some conversation within the financial industry. The investment giant commissioned an online poll of 1,542 female participants in its retirement plans, and 80% of the respondents indicated that talking about money matters was “too personal” or “uncomfortable” for them, even if the other party was someone they knew closely. 1,2
If this were 1965, this kind of response might seem reasonable ... but in 2016? Keep in mind that this was an online poll. The involved survey firm, Kelton, conducted it with the usual wide parameters. Responses were collected from both retired and working women. Respondents were aged 18 and up. 2
Two other key factoids from the study seem incongruous with this first one. In the same
online poll, 92% of the respondents said they wanted to learn more about financial planning
within the next year. Additionally, 83% noted that they would like to take more control over
their personal finances in the next 12 months. Accomplishing both objectives implies talking
about money and personal finance issues. 1
Another positive: female baby boomers seem to have more financial literacy. Digging deeper
into the study’s findings, 70% of the boomer women surveyed felt confident about retirement
saving and making a retirement transition, compared to 54% of Gen X women and 62% of Gen Y
women. Also, 63% of women in this demographic said they knew where to invest; just 48% of
Gen X women and 60% of Gen Y women did. 1
Why do we see this disconnect in the data? If women want to learn more about money and/or
possess reasonable financial knowledge, what accounts for their apparent reluctance to talk
about money matters with spouses, partners and friends? Is there a lack of confidence, a fear of
seeming ill-informed? Is the topic just boring?
Perhaps the answer to the last two questions is “yes.” The poll asked how likely respondents
would be to discuss certain issues with their spouses or partners, and while 78% said they
would likely have conversations about health issues, just 65% said they would be likely to chat
about investment ideas. Fidelity and Kelton also discovered that 65% of these workplace
retirement plan participants aren’t drawing on financial or investment guidance offered as a
complement to the plan. In fact, just 47% of these women indicated they would be confident
discussing money and investments in the presence of a financial professional. 1,2
At the typical company, workers of both genders would rather head out for lunch than set aside
a lunch hour for a meeting about “boring financial stuff.” Such a meeting, however, might help
them see the big picture of what they need to do for retirement and might motivate them more
than any website or article possibly could.
When financial professionals overcome that perception, employees awaken to the opportunity
that a workplace retirement plan presents and see its value; the topics of saving and investing
become much more compelling. When that perception remains in place, fewer employees ask
for guidance and many effectively do not know where to start, and that may promote
discomfort and awkwardness in chats about personal financial matters.
Women seem to invest capably whether they like talking about money or not. Fresh data
from SigFig (formerly WikiInvest) bears this out. In analyzing 750,000 investment portfolios,
SigFig found that the median 2014 net return for a woman investor was 4.7%. For men, it was
4.1%. SigFig also made an even more intriguing discovery: while women tend to invest more
conservatively than men prior to age 55, after age 55 they actually allocate a higher percentage
of their portfolios to equities than men do. 1
The new Fidelity study is a conversation starter, but it might best be taken with a few grains of
salt. Structure a multiple-choice survey question (and its answers) two or three different ways
and you may get two or three different responses. Your individual response to the challenge of
saving, investing and planning for retirement should be a confident one.
Tom Chancellor is a Certified Financial Planner Professional helping clients enhance their financial peace of mind. Tom spent 20 years as a marriage and family therapist and now incorporates resources from psychology, communications, and relationship studies in financial planning for people who experience life-changing events. Tom helps his clients and other financial professionals respond to life transitions such as divorce, death of a spouse, retirement, receipt of an inheritance and legal settlements. Contact Tom with questions at firstname.lastname@example.org.
Securities offered through Comprehensive Asset Management and Servicing, Inc. (“CAMAS”), 2001 Hwy 46, Ste. 506, Parsippany, NJ 07054,1-800-637-3211. Member FINRA/SIPC. Teak Tree Capital Management, LLC, is independent of CAMAS.
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note -investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
1 - forbes.com/sites/nextavenue/2015/02/12/money-the- subject-women- dont-want- to-discuss/ [2/12/15] 2 - plansponsor.com/Women_Have_Confidence_Gap_in_Financial_Matters.aspx [2/12/15]