You are not stupid!
Welcome to the second Top Tip for your financial planning journey. Building on last month, we look at another common theme and consider how it might be changing.
When I first meet many of my female clients, they apologise a great deal and seem to believe they are “stupid” when it comes to the practicalities of money and personal finance. Those initial meetings are often as a result of their reluctant need to speak to a professional because of a specific life event such as divorce, bereavement or serious injury to themselves or a loved one. In many cases, this lack of confidence is a complete dichotomy with their personal and professional lives.
Often these women have very successful careers, run busy households and look after the day to day household budgeting. However, when making larger financial decisions, including those which impact on their own future financial well-being, I hear phrases such as “I was no good at maths at school” which seems to translate into “…therefore I must be terrible at making financial decisions,” despite the fact that there is much evidence to the contrary.
As a result, many historically deferred to a partner and completely disengaged from the key financial decisions which directly impact their future wellbeing. This anecdotal evidence is borne out by the fact that in two thirds of affluent households in the United States, men are the key financial decision makers1. This seems to be directly correlated to the proportion of households where the male partner is the primary financial earner and we see similar trends here in the UK. It is changing.
Research by McKinsey2 has found that women in the US are expected to control $30 trillion of assets within the next 3 to 5 years. Again, these trends are being replicated in the UK. Not only are women earning more but as Baby Boomers age, so wealth is filtering down through the generations.
These trends have been observed and commented on for many years.3 In many instances women report feeling patronised or ignored and importantly, as though we are not being given enough information to make proper decisions.
Perhaps as a consequence of this, of those female investors who inherit money, 68% will leave it in cash4 – the one place we are guaranteed to lose value over time.
So, please remember that you are not stupid. Ask those ‘silly’ questions. Seek to understand. Question the thought rationale behind a recommended course of action.
It is up to those of us in the financial planning profession to engage and involve you. Heaven forbid that you might look forward to seeing your financial planner! Finding a planner in your “tribe” means they will listen to you, help define what matters most to you and work with you to formulate a plan. Importantly, they will be interested in you and want to sit alongside you on your journey.
Catherine Greeves is co-founder and director of Greenstone Financial Planning, a financial planning firm with based in Tunbridge Wells and with offices in London.
She is a Chartered and Certified Financial Planner and sits on the regional committee of the Chartered Institute for Securities & Investment (CISI). She is involved in the Chartered Insurance Institute’s My Personal Finance Skills programme, delivering free financial education workshops in schools and acts as an assessor for the CISI level 7 Certified Financial Planner certification, helping the next generation of financial planners.
This document does not in any way constitute investment advice or arranging investments. It is for information purposes only; any information contained within is the opinion of the authors, which can change without notice. All information is based on sources that the firm believes to be reliable. No responsibility can be accepted for actions taken as a result of reading this document.
Past performance is not indicative of future results and no representation is made that the stated results will be replicated.
Greenstone Financial Planning Ltd is an appointed representative of Best Practice IFA Group Ltd which is authorised and regulated by the Financial Conduct Authority
1. Men seen as financial providers in U.S., even as women’s contributions grow | Pew Research Center
3. What women want is good financial advice – Sophia Grene, November, 30th, 2014 Financial Times
4. Dimensional Women & Wealth Initiative
Greenstone Financial Planning is not responsible for the accuracy of the information contained within the linked site.