Retirement industry must do a better job of reaching out to women
It’s not every day that a study brings a tear to my eye, but the Insured Retirement Institute’s (IRI) new Baby Boomer And Gen X Women report did just that, at least initially. Here’s why. The study found that:
- Nearly 20 percent of boomer women and 35 percent of Gen X women have no savings for retirement at all.
- Of those with savings, 44 percent of Gen Xers and 10 percent of boomers have $50,000 or less.
- Nineteen percent of Gen X women and 17 percent of boomer women have stopped contributing to a retirement account, and smaller percentages prematurely withdrew funds from a retirement account.
Because women tend to live longer than men, those numbers look pretty scary — for the affected women, their families and the larger community.
There is another disturbing finding in the survey, too: The majority of both boomer and Gen X women have not consulted a financial planner about retirement planning.
That last point moved me from sadness to frustration to hope.
Industry research shows that when people use financial advisors, savings activity increases. For instance, a 2012 ING study cited by IRI found that 80 percent of people who use an advisor were currently contributing to an employer retirement savings plan while just 74 percent of those not using an advisor did the same. By extension, then, if an advisor outreach to women is successful, wouldn’t that help turn around some of those low retirement savings numbers cited above?
If so, that could reap bountiful benefits for individuals and society. It also could be good for the business of advisors who participate. The old win-win-win.
Launching a campaign to reach more women prospects might take some new strategies, of course. These would be strategies that resonate with the needs and desires of women, many of whom have a different point of financial focus than men.
For example, according to the Boston Consulting Group survey cited by IRI, women put a lot of value in achieving long-term financial security for themselves and their families (rather than wealth accumulation, a favorite of men). Women also value being heard and respected, and place a high priority on trust, the same study found.
Let me add a couple more preferences. In private conversations, women often tell me they prefer to work with advisors who listen to them (not just their husbands) and who teach them (i.e., not talk over their heads).
Here’s another thought: Hire more female financial advisors. Why? As a 2013 IRI study put it, 70 percent of women prefer to work with a woman financial advisor. A number of insurance and financial firms have been trying to do exactly this, if they only can find women who are interested.
Advisors who focus on the high-net-worth market may not see much value to any of this, since many women still earn less than men. But plenty of women do earn good incomes, or good enough incomes. Advisors serving the upper-middle to upscale women’s market might find a receptive retirement planning opportunity there, if they only look for it.
Needle in a haystack? Perhaps. But maybe, just maybe, this market is a diamond in the dust.