Why the financial pros are targeting women
GENDER GAP | Financial goals, needs different for women
During Joyce Logan's 33-year marriage, she relied on a financial adviser selected by her husband for advice on investing and retirement planning. That guidance disappeared when the Arlington Heights psychotherapist separated from her husband 18 months ago -- and her retirement planning ground to a halt.
The assets she has received during the separation -- about $500,000 in cash and proceeds from the sale of several homes -- are parked in interest-bearing savings accounts.
The assets she has received during the separation -- about $500,000 in cash and proceeds from the sale of several homes -- are parked in interest-bearing savings accounts.
Joyce, 56, knows she needs to get back on track. "I want to retire in 10 or 15 years, and I need to be making more on my investments, but something is holding me back."
Joyce, 56, knows she needs to get back on track. "I want to retire in 10 or 15 years, and I need to be making more on my investments, but something is holding me back."
Some of the biggest players in financial services would love to help. A growing number of big banks and investment companies are stepping up their efforts to serve women saving for retirement. It's a growing, lucrative customer target -- especially midlife baby boomer women, who have disproportionately high net worth and a need to sharpen their long-range financial planning.
"Women have traditionally been chief purchasing officers of their households," said Linda Descano, president of Women & Co., a financial education membership program operated by Citi. "They pay the bills, but longer-term planning has been a lower priority on a very long to-do list. We encourage them to think of themselves as chief financial officers who stay involved in long-term planning."
It's not a comfortable role for many women, especially those who are married.
Research shows many leave the investment decisions to their husbands. But most will need to manage the nest egg on their own at some point as a result of widowhood -- women outlive their husbands by an average of five years, according to the U.S. Census Bureau -- or divorce.
Spectrem Group, a Chicago-based research company, said 48 percent of affluent women are sole financial decision-makers in their households.
Some of the industry's biggest players recognize the opportunity. Citigroup, Wachovia Corp. and Transamerica Retirement Services are among the leaders in marketing their services to women. But these companies are learning that targeting women as customers calls for some new approaches. Research shows women disdain the traditional macho image of investment professionals, and don't put much trust in the industry as a whole.
"The whole industry was created for men by men," said Jenny Ison, a strategic planner at market researcher Frank About Women. A national study conducted by the firm revealed ingrained suspicion among women about the trustworthiness of financial advisers; about half of women told the company they think men get better treatment and services from the industry.
Wachovia has embarked on gender training for its 14,000 financial advisers to improve communication with female clients.
"Historically, the investment world has been very transaction oriented," said Lynne Ford, a senior vice-president and the director of the Retail Retirement Group for Wachovia.. "For women, it's not 'Will we be 80 percent stocks and 20 percent bonds?' They want a holistic approach that starts with life goals. They want to talk about educating their children and grandchildren, what legacy they will leave for their families. We make the money fit around those goals."
Wachovia is devoting a growing portion of its retirement advertising budget and space on its own Web site to its efforts marketing to women. It's also been staging retirement planning seminars in major cities around the country focused on retirement investing education.
Underlying the educational focus is a surprisingly large gender-based knowledge gap about financial planning.
"There's a very large gap in knowledge and awareness among boomer women about the need to plan and save for retirement," said Catherine Collinson, senior vice president of strategic planning services at Transamerica Retirement Services. "Their savings rates are not high enough, and they lag behind men significantly. And it's hard to get them to focus on the issue due to their general lack of awareness."
A recent Transamerica survey revealed that 48 percent of women aren't sure how much money they will need to save for retirement -- compared with just 24 percent of men. The company, which markets to consumers mainly through employer retirement programs, has been working with corporate clients to step up financial education for women in the workplace.
"People definitely are looking for their employers to provide more advice and information on how to save for retirement," Collinson said.
Citigroup has taken a virtual route to customer education with Women & Co. The subscription service launched nationally in 2003, with a focus on educational resources and financial advice. Subscribers pay $125 per year for the service, although many customers of its Citibank and Smith Barney brokerage units receive complimentary access.
Members have access to conference calls featuring experts on various aspects of financial planning -- from basic investing principles to legacy planning and philanthropic giving. The site also sponsors seminars in major cities around the country, and provides members with online financial planning tools.
Although the company won't say how many women have joined, Descano said the site "has expanded its reach across the country over the past few years. And we've got women from all walks of life joining."
Services like Descano's seem destined to grow, if current actuarial trends continue.
"The prospects are terrifying," said Transamerica's Collinson. "Women face unique challenges, because we still earn just 77 cents on the dollar compared with men, we're more likely to work part-time, more likely to take time off or be single parents. So, it's harder for women to save and enjoy all that compounding. And yet we face this greater longevity risk."
Mark J. Miller is president of 50+Digital LLC, a consulting and multimedia publishing company focused on the information needs of 50+ Americans.