Bringing Superior Planning to the Fairer Sex

Many women face a more challenging task preparing for retirement and other planning needs because of the disadvantages they face relative to men.  Here’s how to help.

Nearly every day, it seems, a new study is broadcast over the wire services proclaiming Americans’ lack of financial preparedness and the opportunities for advisors to serve them. This situation, sources tell National Underwriter, is particularly pronounced among that half of the American public that has historically taken a less active part in financial decision-making: women.

Experts say the planning shortfall is evident in client engagements with women across cultural markets and income brackets, including affluent women who are the chief focus of advisors interviewed for this feature. Many of those in greatest need of financial planning assistance are, regrettably, those women with little time to make up for the failure to plan: boomers nearing retirement or going through a significant life transition.

“I run into women all the time who still do not know what their husbands have prepared for retirement,” says Shelley Fiore, a chartered financial consultant and MassMutual co-general agent at Detroit Financial Group LLC, Farmington Hills, Mich. “And, unfortunately, I still meet women every year whose husbands have died prematurely and have left them with virtually nothing—no life insurance, no retirement plan, no emergency reserves.”

“A significant percentage of women who live long after age 65 end up living in absolute poverty,” she adds. “It doesn’t have to be that way.”

Indeed not. Yet many women, market-watchers say, face a more challenging task preparing for retirement and other planning needs because of the disadvantages they face relative to men. Among them: Women (on average) earn less than men in comparable positions; live longer than men, so the retirement dollars have to go further; and contribute less than men to employer-sponsored retirement accounts, due both to the gender income gap and the fact that many women leave the workforce, if only temporarily, to care for children.

Reconciling Two Languages

The differences between the sexes, experts say, are manifest in discussions with advisors—and not just in terms of planning needs. Men and women, sources say, tend to frame financial issues and assess planning recommendations in different ways. Marti Johnson, a chartered financial consultant and representative of Cornerstone Financial Group, Wichita, Kan., observes that whereas men are prone to view solutions in quantitative terms (focusing, for example, on a product’s price and rate of return), women think more conceptually. They want to know what benefits the solution will yield: how, for instance, a plan will result in an enhanced quality of life in retirement.

These characterizations, Johnson adds, are gross simplifications, for each client and prospect is different. Nonetheless, she insists, advisors need to be attuned to the often subtle differences in thought processes that, broadly speaking, separate the sexes. They thus need to employ language, and properly interpret verbal cues from the prospect, that will facilitate productive and successful planning engagements.

“I tell clients that I’m a bilingual financier,” says Johnson. “When sitting down with couples, I often feel like I’m conducting the meeting in two languages. A husband and wife may share concerns, but you have to address issues in question in verbiage that both can relate to.

“Women are more likely to verbalize that they’re not risk-takers, which generally isn’t true,” she adds. “What they actually mean is that they’re afraid of things they don’t understand. Men won’t verbalize this concern because they’re taught not to.”

Yet, getting the wife or significant other to share her concerns may be the greater obstacle. In many client engagements, say experts, the husband takes charge of the conversation because, as the family breadwinner, he’s the one who pays the bills and makes the key financial decisions. Examples: how much to set aside for retirement; and in which vehicles to invest assets. Because of this gender gap, particularly among older boomers and those already retired, many women are wholly unprepared to take the financial reigns if the need arises due to the death of or divorce from, a spouse.

“Those women who let their husbands do all the financial decision-making often feel lost when the responsibility is suddenly thrust on them,” says Diana Scheel, a chartered financial consultant and advisor at Sapient Financial Group, San Antonio, Tex., a MassMutual Financial Group company. “Many don’t even know what assets they have. It can be very disconcerting for them.”

(To be sure, not all women feel this way. As I note in my Producer’s Corner column on page 62, a growing number of them—particularly those of Generation X and the Millennials—are taking a greater role in financial decision-making.)

Compounding the difficulties that women face in planning engagements is the fact that female advisors who might be more closely aligned than male counterparts to the needs of women remain a small percentage of insurance and financial professionals. Johnson pegs the number of women at just over 10% of the advisory workforce—up from the low single-digits when she began her career, but still a small minority.

One result, she says, is that many training programs for advisors retain a male orientation. Ditto in respect to educational initiatives for clients, a notable concern for widowed and divorced women who no longer enjoy the income or assets of deceased or former husbands.

The education gap is, however, narrowing. Candace Bahr, a certified divorce financial analyst and principal of Bahr Investment Group, Carlsbad, Calif., offers a seminar program for single women (a group that accounts for about 70% of her clientele) through a monthly workshop, “Second Saturday.” Sponsored by the now 24-year-old Women’s Institute for Financial Education—, a non-profit with 55,000 members that Bahr and Ginita Wall co-founded—the workshop deals with the legal, financial, family and personal issues of divorce.

The workshop features a presentation by an attorney on the divorce process and legal fees, protecting oneself legally and financially, plus child custody and child/spousal support. Additional talks—presented in turn by a family counselor, financial advisor and family law mediator—explore such topics as helping the family cope financially and emotionally with a divorce; dividing property and the tax consequences of divorce; avoiding divorce court; and the “short-form divorce.”

Since its debut, more than 8,000 women have attended the workshop in 25 to 30 cities, or on average between 30 and 40 per month. The gatherings generally are larger than a comparable workshop more recently established for men who, says Bahr, tend not to want to discuss divorce issues in groups. The workshops for women, she adds, are increasingly in demand.

“A woman who is going through a divorce is often in crisis mode because her income and assets are being cut in half,” says Bahr. “Add to this financial hardship the expense of divorce, which averages about $30,000 in legal fees.”

“Divorce is one of the most devastating things that can happen to somebody, both financially and emotionally,” she adds. “I can’t tell you how many women I’ve come across in my practice who have had breast cancer as a result. Stress and serious health conditions like cancer often accompany women transitioning through a divorce.”

Should a divorce settlement prove unfavorable, adds Bahr, a now single woman may have to revise down her standard of living pre- or post-retirement. Because women have a longer life expectancy, the change can be more painful than for men with comparable financial resources because the retirement dollars have to go further.

A lower standard of living can be difficult to accept, even for high net worth women who, from the perspective of someone less affluent, would seem well endowed. Bahr notes that a settlement payment of $1 million might not last long for someone who is accustomed to spending $100,000 annually.

If that $1 million isn’t forthcoming at the conclusion of a court proceeding, then no effort should be spared to guarantee the sum is paid out at the death of the former spouse. Bahr says that divorcing women should take care that, as a part of a settlement, the ex-husband leave unchanged a life insurance policy he owns designating his former wife as beneficiary (and children as contingent beneficiaries) of the policy proceeds—something he might otherwise be disinclined to do should he remarry. If there is no life insurance in force then, notes Bahr, she can demand as part of the settlement that the ex-spouse buy a policy—or, alternatively, an annuity—naming her as beneficiary.

 The Soft-Sell Approach

 Bahr is not alone in bringing financial education to women in non-threatening group settings that prospects find attractive because of the opportunities to learn about planning solutions without having to commit to one; and because of the chance to share ideas and network with other women who may have similar financial issues and goals.

Johnson regularly host seminars for corporate employees through a program, PlanSmart, sponsored by MetLife. Building on MetLife’s “Retirewise” initiative for employees (now offered at more than 600 companies and nonprofits nationwide), the PlanSmart program includes workshops on managing credit, college funding, estate planning, financial solutions for families who care for dependents with special needs, as well as decision-support assistance for employees.

After completing the workshop, employees who want additional assistance can consult with Johnson. And, indeed, many of the women she counts among her clients came through the corporate education program.

Fiore also does group programs. She frequently holds golf outings for prospects through an initiative called “Women on Course.” She also regularly hosts “Pearls of Wisdom” seminars: Sponsored by MassMutual Financial, the events use exercises and short video clips to share information about planning for one’s children’s education, caring for elderly parents, and, like Bahr’s Second Saturday workshop, securing financial assets during a divorce.

“The goal of these events is to provide a relaxed, sisterly setting where women can discuss their financial fears and dreams and determine where they need to focus,” says Fiore. “Women in these scenarios feel very relaxed and willing to share, and so the forums are great for securing referrals.”

“Rapport-building generally takes longer with women than it does with men, but the longer time-frame usually also results in stronger client relationship and more referrals,” she adds. “One client of mine with whom I have a particularly strong bond introduces me to every other girlfriend and female associate she knows.”

Seminars aside, sources say they also secure referrals to female clients through other professionals. Bahr partners with CPAs, family law attorneys and estate planning attorneys. Julie Murphy Casserly, a certified financial planner and president of JMC Wealth Management, Chicago, says she also counts these professionals among the “advocates” and “evangelists” for her practice, as well a psychologist who, like Casserly, serves professional women.

Casserly cautions, however, that such alliances don’t always work out. She cites a case when she decided to “fire” a mortgage broker to whom she regularly referred business, but who failed to reciprocate.

That failure, to be sure, could reflect as much on the character and expertise of the recipient of such referrals as on the diligence and good business sense of the advisor providing them. Ultimately, sources insist, the referrals will only continue to flow if the financial professional can consistently win the trust and confidence of prospects and clients.

“The secret to securing the trust of prospects, be they men or women, is to listen to their concerns and care about their financial circumstances, as opposed to trying to immediately sell them a product,” says Sapient Financial Group’s Scheel. “And you must come across as knowledgeable about what you do.”

Johnson agrees. “There is no substitute for sincerity and expertise,” she says. “You have to know what you’re doing—and be competent and honest to a fault with women. If you’re blowing smoke up their skirt, they’ll know it.”

By Warren S. Hersch  From the June 2012 issue of National Underwriter Life &  Health Magazine. Warren S. Hersch is senior editor for National Underwriter, and annuities and wealth management news editor for


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