Why financial strategies should be different for women

BY JULIE FLATEN

As business leaders, we know that a financial strategy is a necessity. In both our personal and professional lives, we’re aware of the risks of “flying blind” and the benefits of a solid, yet flexible, financial strategy. Financial strategies provide not only goals and guidelines, but also a measuring stick by which to benchmark your success and adjust your strategy. A good relationship with a financial advisor can make all the difference in professional development, as well as personal security.

What many women have yet to consider, however, is that their financial strategy, and therefore, their relationship to their financial advisor, must be different from their male counterparts. Some of these differences are relatively minor, but others are quite significant, and can affect a financial strategy’s stability and feasibility drastically.

These are the top considerations that women should be aware of when mapping out their overall financial strategy:

• Women live longer than men: It is well known that women typically outlive their male contemporaries. They also tend to marry men older than themselves. Seven out of 10 “baby boom” women — those born between 1946 and 1964 — are expected to outlive their husbands. And, according to the U.S. Department of Health and Human Services, many can expect to be widows for 15 to 20 years. Preparing ahead with a spouse is of course encouraged, but it’s important to be aware that for many major financial decisions, a woman may be alone.

• Women need to trust their financial advisor: Up to 70 percent of women fire their financial advisor within a year of their husband’s death. For women, developing an on-going relationship with a financial advisor whom they trust can avoid that sudden, and perhaps awkward, situation. And for many women, they may want to consider a female financial advisor, if they find it more comfortable to talk about these sometimes emotionally tied issues.

• Women have less in savings: Although women live much longer, and therefore, need significantly higher savings, women on average have far less saved than their male counterparts. Whether this is due to a pay difference, family-related leaves of absence, or other unique factors, women typically have a greater need in retirement but have a smaller pool of resources than men.With these things in mind, what can the professional woman do to ensure her ongoing stability and financial solvency? Where can common pitfalls be avoided, and what advice would a financial advisor offer?

The first piece of advice, of course, is to speak with a financial advisor as soon as possible. It is recommended that all women in professional careers, starting in their twenties, speak with a financial advisor about their future goals and objectives. Yet, a financial advisor is still a recommended source of advice, guidance and help even if a women is nearing or into retirement.

Secondly, women need to put their own financial security first. Too often in our society, women are told to be selfless and to be nurturers, which can lead them to sacrifice their own wellbeing for that of their family or business. Ensuring that their future is cared for before caring for others helps women become financially healthy well into their golden years.

My wish for 2014 is that more women make this their new mantra: Embrace selfishness. Take some time for yourself to develop and control your own financial future. PB

Julie Flaten Financial Advisor, Securian Financial Advisors of North Dakota