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Three Ways Women Are Being Failed By The Financial Planning Industry Thumbnail

Three Ways Women Are Being Failed By The Financial Planning Industry

The financial planning industry doesn't get women.

Women are more educated and successful than ever. Yet, when it comes to their money, they still tend to stand on the sidelines, according to financial experts.

It's something women's advocates are trying to change.

The other day, I spoke with long-time RichLife friend and women's financial educator and consultant, Dr. Barbara Provost, founder of Purse Strings for Financially Fearless Women, about women and retirement planning.

Her research shows that 73 percent of women were unhappy with their service from professionals in the financial industry. 

Among widows, 80 percent switch advisors after the death of their spouses. Roughly 87 percent of women would like to have an advisor, but only 17 percent do.

Fifty-nine percent of widows and divorcees said they wish they had been more involved in long-term financial decisions. And, 74 percent don't consider themselves very knowledgeable about investing.

Women increasingly have more money in their accounts.  Last year alone, women had control over approximately $22 trillion U.S. in personal wealth.

As Barbara put it, "Women can no longer ignore their money. They cannot be secure, independent, and financially fearless unless they understand what's happening with their money. And, that means understanding the basics of budgeting and cash-flow management, as well as adequately preparing for their retirement. It means having regular conversations starting at an early age about money -- a subject that many (women included) still consider taboo."

I couldn't agree more with Barbara.  This lack of financial literacy stems from poor communication about money and an antiquated belief system that dates back generations.

Sixty percent of married/partnered women working with a financial professional say their partner is treated as the sole decision-maker, regardless of how much she earns. 

Single women experience similar problems, frequently feeling patronized by financial advisors, like their ideas aren't listened to, and their goals aren't fully understood.

Over the past 15 years, I've helped almost four thousand families plan for their retirement. Encouraging our clients to work together on their finances and retirement planning has had the most significant impact on how successful their retirement will be.

Open, inclusive conversations allow everyone to communicate freely and have their needs and concerns heard. It helps both partners understand what's going on with their finances and what they need to do to hit their retirement goals. It also helps them know where everything stands when a life-changing event like divorce or the death of their partner happens. 

It's time for us to get comfortable having uncomfortable conversations.

The average age of a widow is 59. The divorce rate is at almost 50% and may have even gone up with COVID. 

Most women, when they divorce, lose a large amount of money in the separation of assets. And if they haven't been in the workforce, it's even harder on them. 

Of the people at the poverty level in the United States, seventy percent are female. And half of those women were not living in poverty before their spouse died.  With a better financial strategy and better planning, that tragedy could have been avoided. 

Women's reluctance to trust financial professionals and the process of creating plans for the long-term starts with that experience of being talked over, not listened to, and not included in the conversation. 

In terms of actual dollars and cents, this puts women way behind in building wealth and having a secure retirement.

Every woman needs to find a trusted source of information and work with a financial advisor that will fully listen to them. 

Women need to feel confident that they are getting advice that is always in their best interest. 

Every woman needs to find a financial advisor that will help them level the playing field so they can feel financially secure and retire with confidence.