Women More Likely to Look for Financial Help

A recent Charles Schwab survey indicates that men seek financial help less often than women, and also report making more financial mistakes.

The survey, designed to understand how investors 50 and older approach their finances, found that men are more inclined to trust only themselves to make the right financial decisions (47% vs. 32% of women). But men are also more likely to say they’ve made more financial mistakes than smart financial decisions (29% vs. 20% of women) and that they still have a lot to learn about managing their finances successfully (35% vs. 28%).   

According to a press release, women are nearly twice as likely as men to turn to friends or family members for financial advice (30% vs. 17% of men), Also, more women than men (67% vs. 55%) say that specific options tailored to their unique situations are more important than a wide variety of perspectives and information.  

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Forty-four percent of women say they are taking a passive approach with their finances versus 37% of men.  Almost half of all women surveyed (46%) are more focused on whether or not their investments or retirement savings are performing well and are less concerned about the underlying reasons for success. Thirty-eight percent feel the same.   

Nearly six in 10 (59%) men say they have learned more from their financial mistakes than from the successes they’ve had; just 51% of women agree with that perspective.  

The Charles Schwab Retirement Advice Survey of 642 Americans ages 50 and over was conducted by Kelton Research between December 15th and December 20th, 2010.

Study Chronicles Pressures on Plan Sponsors

A BNY Mellon/Finadium study found many retirement plan sponsors are reducing the benefits they offer or looking to rebalance funding between employers and employees.

Key findings of the study include: 

  • Retirement benefits packages continue to be seen as an important part of employee hiring and retention. Fifty percent of private company executives surveyed said that their plans made them more competitive as an employer, and 73% of public plan executives felt that their plans were an asset.
  • The attractiveness of defined contribution plans for employers lies in the reduction of funding volatility; in the long run, funding costs for defined contribution may be higher or lower than current costs, but the ability to control volatility is seen as an unparalleled advantage.
  • Hybrid defined benefit/defined contribution plans offer the professional management of defined benefit with the portability of defined contribution; some type of hybrid plan may be the best solution for employers and employees if employer costs can be managed effectively.
  • Executives are looking to their service providers for help with some of their most pressing challenges, including assessing performance for private equity and other illiquid assets, and defining new strategies for assuring a stable retirement for their employees.
  • Surveyed executives had two general opinions about their defined benefit custodians. The first group was engaged with their custodians, seeing these service providers as critical business partners in program management and development. Whether using services on a bundled or unbundled basis, this group recognized that custody banks house a diverse range of professionals with specialized skills. A second smaller group saw these custodians as simply holders of assets, a necessary but unexciting part of the asset management process. The selection of the custodian for a defined benefit program tends to be a long-term choice; 83% of executives said that they had been with their DB custodian for more than two years, and many had been with the same custodian for over 10 years.
  • Plan sponsors that had unbundled custody and recordkeeping for their DC plans noted several supporting factors for their decision. Exactly half sought the transparency that unbundling provides; this group wanted to ensure that data was double checked and that processes were being managed accurately.
  • Surveyed executives expected to offer more services to their employees in the future with the same level of resources they now have available. When asked if any changes had been made to recent service provider relationships, 71% responded no and an additional 25% noted that they were adding a variety of additional services

Laurin Moore, Head of the U.S. Tax Exempt Business at BNY Mellon Asset Servicing, said: “The most pressing question that sponsors of defined benefit and defined contribution plans have to answer today is how to provide retirement benefits that offer employees sufficient funding without causing further strain to employer balance sheets or government budgets. To meet this challenge, plan sponsors are looking to their custodians and asset managers for not only investment returns, but also tools for managing performance and ideas for successful program structures.” 

The study was produced in conjunction with research and consulting firm Finadium LLC. It surveyed 33 executives, all managers with direct responsibility for the oversight of their retirement plans. Executive Directors and heads of plans were the largest category of interviewee, followed by CIOs and other investment officers, as well as operations officers. The plans included in the survey came from across the U.S.

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