Women face significant challenges for building wealth. It’s common knowledge that there’s a substantial gender pay gap — women earn 84 cents against each $1.00 men earn — but there are other financial roadblocks, such as leaving the workforce for caregiving, being set back farther by divorce, having more student debt, and investing more conservatively than men.1
However, it’s been projected that women will be the primary holders of wealth in the U.S. by 2030.2 One study found that women are already 99% involved with financial planning in households with more than $1 million in investable assets.3 They’re also actively sharing responsibility with their spouses in planning for retirement, leading to 62% of non-retired women feeling very positive about their plans. In addition, research has shown that an increasing number of women are relying on financial professionals for education and assistance with planning.
Feel empowered to take control of finances
The story of women’s relationships with money is complicated, however. Only 23% of women are comfortable leading long-term financial planning such as investing and insurance.4 And women under age 60 are more comfortable making investment decisions for retirement savings accounts than women over age 60. A 2021 UBS study found that 82% of women in opposite-sex marriages were deferring financial decisions to their spouses, while other studies placed that number closer to 50-60%.
Like many areas in life, education may well be the key — for increasing women’s confidence and comfort and allowing them to feel more equality with men in making decisions and taking action. Since women typically don’t have time or emotional energy to self-educate after long days of work and caregiving, it’s typically more prudent to learn from a financial professional. Going outside of the household for financial guidance can help reduce the risk of tension or conflict in a relationship — according to one survey, 42% of people living together keep money secrets from their romantic partners.5 Having a wealth advisor can also empower women who may find themselves single one day, whether from divorce or death. Read more about hiring a financial professional: What to Consider When Looking for an Advisor.
Find the right advisor
Aside from focusing on credentials, experience, and fees, women want financial advisors with authenticity, communication, and collaboration. They seek a trusted partner who they can talk to about money and their life — intimate topics that they might discuss only with family or close friends.
A great advisor gets to know you well and looks at your whole life, not just one slice of your finances (like investments). They can help coach you through money issues (that you may have carried on from childhood or other situations) and tackle your money concerns by connecting on an emotional level first, rather than tackling financial fears with data alone.
Sometimes these skills come more naturally to female advisors, so you might prefer collaborating with one. But only about 28% of all finance advisors are women, so they aren’t always easy to find.6 At Mercer Advisors, women make up almost 50% of our firm’s client-facing associates.
| · Women lose an average of $237,000 in lifetime earnings due to caregiving7
· Women’s household income drops 41% after divorce compared to 23% for men8 · Women owe nearly 3% more in student loans than men9 · Women investors outperform men by 0.4% annually to nearly 1%10 |
Take a step forward
Whether you seek out a female or male advisor, remember that you have a voice when it comes to your financial story, and you don’t have to give up control of your financial independence. Education and knowledge are critical to empowerment… but don’t stop there. Creating a financial plan for achieving your goals can only be effective if you implement it. A comprehensive wealth management plan will include financial planning, tax planning and preparation, estate planning, insurance solutions, and investment management.
If you want to be successful in building your wealth, and overcoming the roadblocks women face, act now. To meet with an advisor who understands women and wealth, get in touch.
1.“How Women Can Increase Odds of Saving Enough for Retirement,” Kiplinger, May 8, 2024.
2. “The rising wealth of women,” Bank of America, March 2024.
3. “New Study Highlights How Women Can Control Their Financial Well-Being,” Forbes, March 18, 2024.
4. “Women are poised to reshape financial markets —as investors and financial decision-makers,” World Economic Forum, June 7, 2024.
5. “Are you committing ‘financial infidelity’? Study finds 42% keep money secrets from partner,” CBS News, Jan. 23, 2024.
6. “Finance Advisor Demographics and Statistics in the U.S.,” Zippia.
7. “Lifetime Employment-Related Costs to Women of Providing Family Care,” Urban Institute, February 2023. (resource removed from website)
8. “How divorce laws are designed to create unnecessary financial hardship for women,” Fortune, Aug. 23, 2023.
9.“Student loan debt: Averages and other statistics in 2024,” USA Today, June 3, 2024.
10.“Investing for Women: What You Should Know,” Motley Fool, Feb. 20, 2024.
