Finance from a feminine perspective
By Gene Walden
From the Minneapolis StarTribune
The investment business has long had an image as macho as the bull and bear. Wall Street was a place where men peddled securities to men.
That world is slowly changing. Women who do become involved in investing have proven to be very astute. But generally speaking, women are not exactly pounding down the doors.
“In most cases, married women still want to delegate their finances to their husbands,” says Paula Kozlowski, a regional vice president of Van Kampen Funds.
“Only about 15 percent of women who are married or live with a significant other feel responsible for planning for their financial future,” adds Peg Chromy Webb, a senior vice president with Wayzata-based Wealth Enhancement Group. “The other 85 percent prefer to have someone else do it for them. It’s not a priority for them as it is for men.”
Unfortunately, most women will reach a time in their lives when leaving their finances to someone else is no longer an option.
“Almost 95 percent of women will be in charge of their finances at some point of their life,” says Webb. “That’s why they need to take charge of their financial future now rather than putting it in the hands of someone else.
“Picture life without your husband and plan accordingly.”
It starts with finding the time to study and learn, adds Kozlowski. “We see a lot of career-driven women who are very bright, but they have not spent enough time reading and educating themselves on investing.”
Too often, women find themselves overwhelmed by their finances after a divorce or the death of the husband. “I’ve gotten phone calls from women in that situation and they want a 24-hour crash course on investing,” says Webb. “That is not the time to start learning about investing. Don’t wait. You need to take the first step now to educate yourself.”
Part of the upbringing
Women’s attitudes toward finance and investing are shaped in part by their upbringing, explains Kozlowski. “Particularly in the Midwest, most people were raised in families where the father took care of the finances.”
Without that foundation, women feel lost when the topic of conversation turns to financial matters. “They don’t understand the jargon and they don’t have a good understanding of investing,” says Kozlowski.
That disconnect helps explain why many wives would rather pass on the annual portfolio review with the financial advisor. “It’s not that men don’t want their wives there,” says Kozlowski. “The women just won’t come.”
Women may also avoid those meetings because they feel like they’re on the outside listening in. “I see many women who say they can’t stand their advisor because he doesn’t pay her the same respect as he does the husband,” says Webb.
Even with an advisor sympathetic to the wife, the husband may still dominate the conversation. “Sometimes I have to ask some questions directly to the woman—and the husband may still try to answer. I have to ask him to let her answer.”
Mars and Venus
Men and women have very different attitudes toward finance--a cultural clash Webb says she has witnessed in action many times. “I have a glass table in my office where I can see them kicking each other under table. There are huge differences in attitude between men and women.”
Some of the more obvious differences include:
· Women tend to be more conservative and less willing to take risk.
· A lot of men actually like investing and often consider it a hobby. Women rarely share that same enthusiasm. “The investment section is the last part of the newspaper that most women would want to read,” says Kozlowski.
· Women typically make less but live longer, so they need to make their money last.
· Women are more willing to seek help. “It’s like asking for directions,” says Webb. “Women are quicker to admit they don’t know something and more willing to ask for help.”
· Women are more long-term-oriented and more willing to stick to a plan. Men are more reactive, less risk-averse, and more willing to play the market.
“The good news,” says Webb, “is that once women decide to get involved, they are great investors.”
A number of studies have shown that women actually tend to be better long-term investors than men. “They have good attention to detail, they do their homework and they have good follow-through.”
It all starts with a little education. “You don’t have to know everything. Become somewhat educated. Learn the terminology. And then go seek help.”
Men: 4 things to do for your wives
1. Find a financial advisor she likes.
2. Put together a list of all of your accounts, policies, contact people, phone numbers, web addresses, pins, and passwords.
3. Involve her in the investment process, even if it takes a little arm-twisting.
4. Ask her to read this article—but don’t be surprised if she won’t.