One big mistake you must avoid!
There seems to be a great deal of confusion surrounding the issue of women and financial confidence. Do women have confidence or do they lack confidence and what does it mean to you and the financial community at large?
One article screams, “Women, Money and Their Alarming Lack of Confidence” (Forbes.com, Sept 2015,) and points to research that indicates, “just 47% [of women] say they are confident talking about money and investments with a financial professional”. Another report, authored by Barbara Stewart, a veteran portfolio manager and Chartered Financial Analyst, states unequivocally that women do not lack financial confidence and goes on to talk about outdated stereotypes regarding women’s fear of investing.
So how can both of these be right? How can we say women don’t lack financial confidence when less than half claim to be confident talking about money?
The answer rests in the fundamental differences between how men and women perceive themselves and interact with the world.
Women, even those who are highly educated, have considerable assets and good jobs often APPEAR to lack confidence when discussing finances.
There are two reasons for this:
First, women demand more from themselves. They have higher standards so they tend to think they should know more. Studies have shown that even women who identify themselves as not knowing enough about finances, score just as well when tested against men who claim to be knowledgeable.
Second, confidence is a situational construct. The same woman who says, “I am confident running a business, skiing or raising children” will say, “I am not confident in my ability to fix my car or invest, but my husband is”. This, of course, is only because he’s been exposed to those things and she hasn’t.
Women were historically left out of the conversation with little opportunity or motivation to gain the level of knowledge they think they need to be able to declare themselves confident! Now many are playing “catch-up.”
According to a Fidelity Investments Money FIT Study,
- 92% of women want to learn more about financial planning,
- 75% want to learn more about money and investing.
- 83% want to get more involved in their finances in the next year.
What all this means to you and the financial community, is that women should never be underestimated.
So be careful not to alienate them by treating them like children – or dumbing it down. Do not make the mistake of assuming that just because they ask a lot of questions it means they lack confidence! Quite the contrary, if she is asking questions it is because she wants to know more, not because she lacks confidence but because she wants to be more competent!
Advisors who get it right will be the winners because female investors make ideal clients: they believe in the planning process, value their advisor and the services they offer and refer more new clients than men.
To learn more about understanding how to reach out to women and grow your practice – visit us at here.
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