What do women seek in financial advice?

What do women seek in financial advice? | Insurance Business New Zealand

What do women seek in financial advice?

The new regime is well and truly in place, introducing an even more client-centric and outcome-focused approach to financial advice.

As advisers are aware, tapping into clients’ needs requires not only competence and awareness, but also ‘soft skills’ such as active listening and efficient communication – in order to recognise the money-mindset issues that might be holding their clients back.

For example, research has shown that, on average, women have a different financial mindset than men, and are likely to face gender-specific challenges. Despite being no less capable than men, New Zealand women earn less on average, live longer but retire with less, and are less likely to own property.

Behind these patterns is a blend of personal perceptions and objective barriers, making gender one of the (many) variables that advisers need to consider when offering advice. Importantly, this is yet another opportunity for advisers to shine and make a difference.

Longer lives, lower savings

According to Stats NZ, Kiwi women live longer than men. However, when it comes to saving for retirement, women’s longer lifespan is a double-edged sword, as they need more savings to fund the post-work lifestyle they desire. Unfortunately, statistics indicate that they also have lower KiwiSaver balances than men.

There are several factors at work here. On the one hand, women earn approximately 9.5% less than men. In New Zealand, the gender pay gap has been trending down, but it remains stubbornly difficult to close. Also, the Ministry for Women estimates that one-third of Kiwi women in the working age group are working part-time, as motherhood continues to be a major factor in how women engage in paid work.

On top of this, research consistently finds that not only do women contribute less to KiwiSaver, but they are also less likely to have other investments in place.

A matter of confidence and gender stereotypes

A 2019 survey conducted by Sharesies in New Zealand reported some interesting insights about the ‘investment gender gap’. According to the Investor Survey, only 14% of all Kiwi women are investing in shares, compared to 25% of all men.

A part of this seems to be due to perceived lack of confidence. Only 28% of Kiwi women said they weren’t knowledgeable enough to invest in shares, which caused some to avoid investing altogether.

The way we talk about gender and financial matters may also inform a different approach to money.

On this note, a 2018 linguistic study undertaken in the UK by Starling Bank discovered that there are money stereotypes in the media. Upon analysing 300 articles, they found that 65% of money-related articles in women’s magazines described women as excessive spenders, and the majority of the advice revolved around controlling shopping splurges.

In articles aimed at men, 70% stressed monetary success as a masculine ideal, depicting the financial landscape as something to ‘conquer’ with power, competitiveness, and performance.

There’s no evidence that the same narrative is prevalent here in New Zealand. What we do know, however, is that women and men approach money differently. Local research shows that Kiwi women are more likely to keep their investments in cash or bring money into savings accounts, to prepare for immediate expenses such as childcare or household matters. Kiwi men, on the other hand, are more likely to take risks with investing.

What other studies highlight is that the lack of confidence in investing is a doubly missed opportunity for women. According to international reports, when women invest, they tend to have a better average return from their investments than men. This is because they tend to be patient, favour a balanced investing approach, invest with goals in mind – and most importantly, they’re not afraid to ask questions. 

What women are looking for in financial advice

Once again, New Zealand financial advisers can be the difference-makers. There are many ways advisers can assist women in achieving their full potential, filling awareness and trust gaps, and planning for a more fulfilling financial future.

This does not imply that advice must be gender-specific; rather, it’s client-specific. After all, painting all women with the ‘same brush’ results in a one-size-fits-all approach that fails to consider the variety of needs, desires, and circumstances that each client (man or woman) faces.

All around New Zealand, advisers are there to provide the crucial clarification and guidance needed when making financial decisions. They can contribute to closing the gender gap by reflecting on the client experience and being prepared to address any questions that female clients may have. They can assist them in growing their financial trust, offering valuable resources, and facilitating a dialogue about money.

This is what client-centric advice means: a trusted relationship whose focus is on improving Kiwis’ wellbeing.