As families gather together this holiday season, it may be the ideal time to have those tough yet critical discussions about long-term financial plans. Retirement Director Marquette Payton explains how financial professionals can help ensure these meetings are productive and that everyone – especially women – are active participants in the conversation.

It’s hard to imagine, but the last time many of us spent the holidays with our families was 2019, a time when the word “pandemic” was not likely on anyone’s radar. Now that many of us are looking forward to finally seeing our loved ones in person again, it may seem counterintuitive to suggest that this is a good time to bring up uncomfortable financial planning and long-term care topics.

But it may actually be the ideal time. After all, the specter of COVID has forced many of us to contemplate whether we would be financially prepared if something should happen to us, our spouse, parents, or children. It’s also important to consider that this may be the only time of year families are gathered in a forum where all voices can be heard. No one wants to think about death, but for many families, discussing money matters can be even scarier.

As a financial professional, you can play a critical role in facilitating these discussions by supporting your clients with information and planning resources. One area you may want to consider focusing on in particular is encouraging your female clients to be active participants in the conversation.

Women often avoid getting involved in investing and financial planning discussions due to lack of encouragement or because they believe their spouse is savvier than they are. But research shows that active participation in financial planning can help protect women from negative financial surprises following the death of a spouse.1 This is especially important considering the fact that up to 70% of widows leave their financial professionals after they become widows.2

As the holidays approach, following are some ideas for how to help clients – in particular your female clients – prepare for these difficult conversations, while also demonstrating how you can be a valuable partner.

Silence Isn’t Golden, But Transparency Is

To ensure family money meetings are productive and as comfortable as possible for everyone involved, it helps to establish guidelines beforehand. These include being respectful, not interrupting, taking turns speaking, actively listening, focusing on trying to understand each other’s perspectives and, sometimes, agreeing to disagree. For female clients in particular, establishing these sorts of communication guidelines can go a long way in fostering their engagement and ensuring their voices are heard.

Another part of the preparation is helping partners articulate individual as well as shared goals, such as family values and legacy plans. If time and scheduling permit, have each partner complete a questionnaire individually, then meet with them as a couple in a follow-up meeting to discuss their answers and set the agenda for the first family meeting.

Help Female Clients Incorporate Personal Goals in the Family’s Plan

Women’s financial goals are often tied closely to their personal goals and priorities, so it’s important to have a platform that allows female clients to fully articulate what matters most to them. Family discussions are a great forum to accomplish this.

A recent study on women and wealth management from McKinsey & Company found that, although many women would be happy to outperform the stock market, it’s not the primary goal for most. However, retirement is a major theme: The study showed that women are roughly 10 percent more likely than men to say they are concerned about outliving their assets in retirement and having enough savings for retirement. Women are also more likely than men to worry about the cost of health care, paying for long-term care insurance and being a burden on others later in life.3

A good way for families to broach financial planning conversations that resonate with female clients is by sharing values and success stories. In her book Breaking Money Silence: How to Shatter Money Taboos, Talk More Openly About Finances and Live a Richer Life, behavioral change specialist Kathleen Burns Kingsbury proposes two questions families may want to consider raising in these types of discussions: “What are the three most important family values you want to pass down to the next generation (or even across to your spouse)?” and “What is your family’s success story and how does that express your core values?”4

Preparing for the Transfer of Wealth

One topic that should be a priority for families in their money conversations is who will be the recipient of wealth in the event of the loss of a loved one. Oftentimes it is the next generation that comes to mind, but according to McKinsey’s research, approximately $30 trillion in wealth is set to change hands in the next decade, and women are poised to inherit a sizable share.5

Demographics play a significant role as a large chunk of this wealth is held by baby boomers, and because women live longer lives, many men will cede their wealth to their wives. The other factor is that women have made great strides in the workplace, including holding C-Suite positions and becoming business owners. In the process, women have created a lot of wealth for themselves. However, 55% of women over age 50 and 59% of millennial women ages 20 to 34 are deferring long-term financial planning decisions to their spouses.6 The effects of this lack of participation become magnified during the very stressful and emotional time of losing one’s spouse.

Build Confidence Through Ongoing Financial Education

The McKinsey study referenced previously notes that “while socially ingrained gender roles and other factors play a role, the gap between female and male self-confidence highlights the need for financial professionals to do more to help women meet their goals and build trust in their own financial literacy.”7 In fact, the research revealed that even when females are involved in financial decision-making, roughly half of them say they feel unprepared for their financial goals despite having a financial professional.

Remember, women want financial professional relationships to be collaborative. Spend time with your female clients and encourage questions, provide explanations of jargon (or better yet, avoid it altogether) and limit your use of acronyms. Also consider taking advantage of today’s technology to hold shorter but more frequent meetings with female clients through a platform like Zoom to help build financial literacy through small but consistent steps. These interactions can help women investors build higher levels of self-confidence, which in turn may help you be part of the 30% of financial professionals who retain relationships when their female clients become widowed.

Embrace This Opportunity to Demonstrate Your Value

In addition to offering guidance on family money conversations and financial education, sometimes simply providing moral support can be invaluable, especially considering the crisis we have all experienced and are continuing to cope with. Let your clients know you’re available for meetings, whether virtual or in-person, even if for no other reason than to listen to their concerns and provide an objective point of view.

Although money conversations can be often uncomfortable, with your support, they can bring not only a sense of hope, but also feelings of relief for the entire family – especially for women who may not have been involved in these discussions in the past. Now that the holidays are almost upon us, you have an opportunity to demonstrate your value by encouraging families to first and foremost enjoy each other’s company, but also set aside time to start building a legacy of open dialogue for generations to come.

1 “Women put financial security at risk by deferring long-term financial decisions to spouses, UBS research reveals.” UBS, March 2019.
2 “For some widows, breaking up with an advisor is easy to do.” CNBC, October 2014.
3 “Women as the next wave of growth in US wealth management.” McKinsey & Associates, July 2020.
4 Kingsbury, Kathleen Burns. “Breaking Money Silence: How to Shatter Money Taboos, Talk More Openly About Finances and Live a Richer Life.” Praeger, 2017.
5 “Women as the next wave of growth in US wealth management.” McKinsey & Associates, July 2020.
6 “Women put financial security at risk by deferring long-term financial decisions to spouses, UBS research reveals.” UBS, March 2019.
7 “Women as the next wave of growth in US wealth management.” McKinsey & Associates, July 2020.

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