Armed with a top education, self-confidence and their own money, women are increasingly taking control of their finances, Senior Financial Adviser Tracey Boam writes.
It’s often said in financial planning circles that “A man is not a financial plan”.
This rhyme is used frivolously to encourage women to plan for the future but the truth is that society has traditionally portrayed marriage (to a man) as the solution to all their financial problems.
The perils of this social construct are depicted in Jane Austin novels and, more recently, movies like The Best Exotic Marigold Hotel.
In this 2011 film, grieving housewife Evelyn Greenslade (played by Judi Dench) is forced to sell her house, after only learning of her dire financial situation upon her husband’s untimely death.
Fortunately, the outdated notion of a man as a financial plan is being phased out and women today are more educated and independent than any other time in history. Many are even happily unmarried (*gasp*).
While there is still some way to go to before women are truly given the same opportunities as men including equal pay, research shows that women are increasingly in control of their financial affairs.
According to the Australian Bureau of Statistics, around 60% of Australian women own their own home, either outright or with a mortgage, compared to 56% of men1.
An ING Direct report found 27% of women make the majority of financial decisions in their household including 8% who are the sole decision maker on all financial matters. The majority of women are equal decision makers and only 1% defer all financial decisions to their male partner.
This changing dynamic is playing out at Pride Advice where women represent a growing proportion of our clients.
Sadly, some come to us for advice following the breakdown of their marriage or the death or illness of a spouse. Others have gained a significant windfall or inheritance.
Last year, a woman who had become a quadriplegic as a result of a serious car accident approached us to help her manage her million-dollar payout, put the necessary care arrangements in place and monitor the ongoing provision of those services.
Interested, educated and confident
When it comes to client meetings, I’ve observed that women have become more present and vocal over the past 15 years.
As contributors to a household’s wealth, they not only want to understand their financial position, they want a say when it comes to how their money is managed.
And legislation is supporting this trend.
Under new requirements set by the Financial Adviser Standards and Ethics Authority (FASEA), when advising a couple, financial advisers must communicate and consult with both parties. They need to take into consideration the needs and goals of both individuals and ensure they both understand and agree to the advice being provided.
FASEA’s Code of Ethics, which came into effect on 1 January 2020, aim to give clients further assurance that their financial adviser is acting in their best interest.
At Pride Advice, we support any reforms that encourage people to take an active interest in their financial affairs.
This is because we understand the value of advice.
Recently, a report by Fidelity International found 88.5% of Australians who received advice felt more confident about their financial future3. Around half believed that financial advice was beneficial for their mental health.
The importance of professional advice will only become more apparent as the baby boomers retire, seek to build a steady income stream in retirement and ultimately pass their wealth to the next generation.
Women will be key beneficiaries of that $3.5 trillion intergenerational wealth transfer3 simply because they live six to eight years longer than men on average4.
As such, women will play a central role in how wealth is managed in the future.In the end, the needs of men and women are not dissimilar when it comes to financial advice. Everyone wants to deal with an experienced, knowledgeable and professional adviser who will listen, understand and help them to achieve their goals, be they buying a property, achieving a comfortable retirement or effectively leaving an inheritance for their children and grandchildren.