That was the consensus of a recent panel presented by The Hartford and the Massachusetts Institute of Technology AgeLab, discussing a recent study about retirement concerns by gender. The study found that women are worrying more than men about retirement, and they have just cause to worry because of longer lifespans and less retirement income. (The full Why Women Worry report and summary is available here).
A recent study by Hewitt Associates found that women are not only saving less for retirement, but need more in retirement (see Women Could Face More Savings Shortfalls Than Men). That might explain partly why women showed more concern about retirement than men across the board in Hartford’s study. The topics women worry about more than men include inflation, physical health decline, outliving their money, and money management. The only area where men showed more concern in retirement than women was: “not enough to do,’ according to the study.
“The good news is that women are worried about the right things; the bad news is their retirement income isn’t up to par,’ said panelist Stephanie Chappell, corporate gerontologist at The Hartford.
In the employer market, there is opportunity from both advisers and sponsors to reach out to women—particularly single and working women, an increasing segment in the workforce, said panelist Laura Marzi, assistant vice president in The Hartford’s Group Benefits Division. “There’s an opportunity being missed today,’ she said. “I don’t think we’ve done a great job [reaching out to women], and our financial adviser community has a big opportunity.’
To turn “angst to action,’ financial advisers could put more focus on women clients, who need to understand their financial picture independent of their spouse, said panelist Eric Waller, a retirement solutions consultant with The Hartford. Financial advisers have tended to focus on the male gender and not the female gender, he says, which is evident in the fact that 70% of widows will switch financial advisers within the first three years of their husband’s death. “If you want to keep your client, talk to both partners,’ he told PLANADVISER.
Women show interest in receiving advice from a financial adviser. A recent Prudential study found that three-quarters of women confident about their retirement savings have the help of a financial adviser (see Women Look to Advisers, Internet for Financial Information). More than half of women (59%) surveyed listed a financial adviser among their top three sources of financial information.
Panelist Joseph Coughlin, director at the MIT AgeLab, agrees that practice management for advisers needs to change to better incorporate women, perhaps by using less traditional channels of advice. Speaking with PLANADVISER, he said advisers are “using a model designed around men’s lives’—he likened it to a model fit for the 9-to-5 working man in 1969. Communicating with female clients, he says, is different than men. The traditional client dinner might not be as effective when you are talking to a working mom who needs to pick up her kids.
Coughlin said America is experiencing the “first generation of fully empowered women,’ who are playing a much larger role as decision-makers in the increasingly consumer-driven economy.
And (while avoiding the debate about whether gender differences are social, biological, or both), studies show some differences in how women interpret and respond to information. For instance, Coughlin says, women spend longer scanning a grocery shelf than men. For advisers, those differences could require a different way of approaching the client segment of women.
Waller suggested that advisers need to be more sensitive to the bigger picture, incorporating financial planning. There are a lot of transactional-minded advisers, he says, but women could benefit from a more holistic approach. A recent Cerulli study points out that financial planning will become more important to financial advice in general (see Advice is Value Added).
Advisers who do not reach out to women are missing a huge opportunity, Waller emphasized. “The adviser community is going to have to just open their eyes and go after that market more aggressively,’ he said.