by Samantha Secomb FPFS, Chartered Financial Planner and Director of Pentins Financial Planners and Women's Wealth.
Women think and behave differently around finances - equality of approach is not always appropriate when it comes to financial planning. Obviously I am generalising, but I speak from thirty years of experience as an adviser when I tell you women are far more likely to say "I don't know where to start" rather than blame a lack of time. In my experience, women prioritise security and manageability over wealth and ambition. Here is how I specialize financial planning for some of my female clients.
In my experience, women are less ambitious for material wealth than men. A yacht, prestige car or holiday villa is less appealing than a debt-free home and money set aside to support the kids through higher education. Additionally, I've found that women prize security: knowing there will always be enough to support the lifestyle she wants for herself and her family- no matter what.
Once I help female clients cover the financial bases, they're often ready to talk about options for improving on returns. However, ‘covering the financial bases' takes some serious number crunching to test all the "what if" scenarios. I also usually put on my coaching hat to reassure my clients that all is safe and sound before moving to the wealth-building stage of the financial planning process.
With many couples I've worked with, one partner earns well while the other has sacrificed earnings ability to care for their children.
Often, I'll suggest the current earner in the family hand over some wages to fund a pension for their partner. Couples generally meet this suggestion with resistance. However, when I demonstrate that equalising income in retirement delivers massive tax benefits for the family, the move is more appealing.
Discussing the costs of replacement childcare and helping the family consider the value attached to the caring role is good for everyone. The discussions boosts the self-esteem of the carer. It reminds the earner that it's a team effort to bring home a salary and it helps quantify the financial risks associated with incapacity of the carer. This risk is often overlooked. Just because the carer doesn't go out to work doesn't mean the family wouldn't suffer financially if they were unable to do their job. Either the earner will have to stop work to provide care or help will need to be hired in unless the family are lucky enough to have a support network to take up the slack.
It's been a standing joke amongst my colleagues that I insist a box of tissues be available in the meeting room. My male colleagues do not reduce their clients to tears and they are proud of it. I, on the other hand, often find discussions about our greatest hopes and worst fears can get emotional. I don't feel I have done a comprehensive job unless I talk about these important, life sculpting subjects and I am not embarrassed by an emotional discussion. Typically, my female clients are more comfortable with this vulnerability as well.
Women often offer perspectives such as, it's more important for me to know we will always have enough rather than keep aiming for more and taking on risk, or if I stretch myself any further at this time, there is a risk of it all becoming unmanageable.
These characteristics are admirable, but they can lead to women having less; less earning potential, less time in paid employment, less pension and less investment return. I find it important to help my female clients claim their family dues, embrace appropriate risk, and sleep soundly knowing the risks they are taking are all completely manageable.
After nearly 30 years in financial services, Sam now runs her own Financial Planning practice specialising in independent financial advice For Women By Women.
She ives in Westgate, works in Canterbury, eats too much, loves dancing and is looking forward to Strictly 2019 season kicking off.
She is grandmother, mother, daughter, sister and grateful to be part of an extended family which provides more drama than all the soaps put together, they are her joy and reason for living.
