Making Sense of Women’s Financial Attitudes

Making Sense of Women’s Financial Attitudes

Hollis Walker: This is Away from the Noise, a podcast for financial advisors and their clients. Hello, this is Hollis Walker with Jan Blakeley Holman, director of advisor education at Thornburg Investment Management. Welcome back. Thanks for joining us for another episode of Away from the Noise. Hello, Jan. Great to see you again. It’s been a minute.

Jan Blakeley Holman: It has Hollis. It’s been more than a minute. And can you believe it? We’re nearing the end of the year.

Hollis Walker: Don’t remind me. The holidays are coming. If I know you, Jan, you’re thinking about all those year-end financial concerns. Am I right?

Jan Blakeley Holman: Well, there’s always something on my mind. I try to quiet the mind but it never stops working, churning. Today I want to discuss some information that came from a Northwestern Mutual survey that they called their 2023 planning and progress study.

Hollis Walker: Okay, let’s hear it.

Jan Blakeley Holman: Well, the planning and progress study that Northwestern Mutual undertakes annually is very comprehensive. The goal of the study is to explore us adults’ attitudes and behaviors toward money, financial decision making, and the broader issues impacting people’s long term financial security. To get this information, respondents were asked questions on subjects like work and retirement, debt, advisors, wellness, high net worth, and women and wealth. So I want to talk about the women and wealth part of the study.

Hollis Walker: That should be interesting, Jan.

Jan Blakeley Holman: Well, it was interesting. But before I get into the details, I’d like to say that in this study, it’s a little different than most other studies. The feedback is separated by gender, and generation instead of just by gender. So I was surprised at some of the responses they receive from younger women. I’ll give you some examples in a minute, but let’s start at the beginning. First, they found that fewer American women feel financially secure and confident in their retirement readiness. In this case, 43% of women feel financially secure. Only 44% believe they will be prepared for retirement. Compare that to the way that men answered the questions. 59% felt financially secure, and 61% think they will be financially prepared for retirement. Now, this isn’t surprising at all, Hollis. The results are very consistent when women are asked questions about finance. Actually, when women are asked questions about many things, they are just less confident than men are. The reason for that is that they don’t feel like they know enough about a subject or that they’ve done enough to be confident. And there’s something called the confidence gap. It shows up in many situations. And it’s a gap between the way females answer something and the way males answer something. So given that the confidence gaps exist, the results of the female responses are to be expected. Someday it may be different. But today it’s a reality. The study revealed not surprisingly that men are more confident that there will be social security when they need it. 63% of men thought that, 48% of women thought that. What surprised me was that 48% of Generation Z women, and those are people born between 1997 and 2012, were second to 63% of baby boomers who believe Social Security will be there for them. Gen-Xers and millennials were less confident. Now, why do I think that’s interesting? I think it’s interesting because I can see baby boomers feeling confident because they’re right there. They see it. If they haven’t, you know, turned 70 already, you’re taking their Social Security, whether they’ve taken it between age 62, 63, 66, 68 or 70, they’re right there so they can see that they’re going to receive it. I just thought it was really different than Gen Z women who are very far away from taking Social Security, were confident that they would receive it. In other areas Gen Z women are more optimistic about their longevity and financial futures than their older counterparts. I don’t know what the Gen Z women are thinking but they appear to be a very positive, confident generation of women. Wrapping up the results, Hollis, I want to point out the answer to the question that made me laugh. Both are related to biggest fears slash concerns about retirement. Respondents were offered several choices. What are your biggest concerns, fears about retirement? One of the choices was missing my career. 9% of baby boomers are concerned about that, compared to 23% of Gen Z women. And here’s what I thought and why I left. The baby boomer women are sick of working with these people. Whereas the Gen Z people see, this is my social life. These are my friends. I’m just teasing. But it was funny to me. Suffice to say, the Gen Z women will figure it out after they have 25 to 30 more years of working under their belt.

Hollis Walker: You know, you got to do the math on that, Jan. I was thinking I started to work when I was 16 years old. So I’ve been working a half a century now. Yeah. So people like me are really sick of working.

Jan Blakeley Holman: 16? I thought there was like a child labor law in the country. I was a camp counselor.

Hollis Walker: So anyway, the whole the whole study is really interesting, Jan. And given the results of this, what do you think women should do to become more secure and confident?

Jan Blakeley Holman: Well, people need to remember when it comes to preparing for retirement, it’s every woman and man, for her or himself. It doesn’t matter if someone has a spouse or significant other, each person has to make sure that we’re doing everything we can to ensure our own financial security. I expect that most of our listeners are doing the things that they should be doing, like creating an emergency fund that holds six to nine months of cash that will cover monthly expenses, managing their debt, and regularly contributing money to their retirement account and remaining invested regardless of what’s going on in the economy and the investment markets. We should have a goal to contribute the maximum amount we can to our retirement accounts. It may take a while to get there. But it is achievable.

Hollis Walker: Thanks, Jan, I think that’ll make me feel more secure and competent if I’ve got six to nine months of money in the bank to cover my monthly expenses. And those other things you mentioned, of course.

Jan Blakeley Holman: That’s right.

Hollis Walker: Now it’s time for us to turn to our Ask Jan segment. We have a question from a listener who writes,

Dear Jan, I feel embarrassed asking you this question. But here it goes. I’ve been working with a financial advisor for the past three years. While the advisor was highly recommended by friends, I’ve never been very impressed primarily because I never understand what the advisor is talking about. I’ve been a physics teacher for 15 years, and I thoroughly understand physics. But I don’t understand the language of investments or retirement. What should I do? Signed, quantum questioner.

Jan Blakeley Holman: Well, quantum, thanks for sending us your question. I myself am not a physics person. This may be surprising, I didn’t throw a marshmallow and a bowling ball out of the Leaning Tower of Pisa to see what happens. But let me say to you, there’s nothing worse than working with a financial advisor, who is so impressed with their knowledge that they fail to consider their audience. There are a few ways you can approach this problem. First, either you can talk to the adviser and say some of the information they’re giving you is really difficult to understand. Or you can look for another financial adviser. And actually, that’s what I’d recommend. Because I think the advisor should be sensitive enough to what you need to hear in terms of describing things, explaining strategies and all those types of things, as opposed to being so focused on the sound of their own voice, that they’re not paying attention to your needs. If you choose to look for another advisor who’s more tuned in to your needs, and your grasp or lack of grasp of financial terminology. Here’s an idea of how to find that advisor. Begin by asking your friends, trusted colleagues or knowledgeable relatives, underscore knowledgeable, ask them if they work with a financial advisor. If the answer is yes, ask them why they liked that advisor and get the names from those people have three, or maybe four advisors who sound like they might be right for you. Call each of those advisors and explain that you’re looking for a new advisor and you’ve been referred by whoever referred you and that you’d like to meet them in an introductory meeting. During each of those meetings, ask the advisor what kind of clients they work with, why they chose this career, and what their financial and investment philosophy is. Make sure the advisor asks you questions about yourself, your family, your career, and your financial goals. It’s important for you to find someone who can articulate the way they work, but talks less about themselves and more about you and what you’re looking for. This process should help you identify an advisor who’s right for you.

Hollis Walker: Oh, really good advice, Jan. I want to add something. I know that we’ve got a lot of advisors in our audience. And as a person who uses a financial advisor, and a person who is not so savvy for all the terminology, I think it would be great if advisors simply asked their clients every time they met them, is there anything about what we talked about today, that’s not entirely clear to you? You know, ask it in a friendly, non-critical, non-judgmental sort of way, and maybe that would help clients be able to tell their advisors, well, I actually didn’t get that part about whatever.

Jan Blakeley Holman: Nobody wants to admit that they don’t understand something. So an advisor has to make it safe for a client to admit that. And people in our industry, portfolio managers and that type of thing, have to make it alright for advisors to ask questions about things that are complicated, too, because none of us have all the information.

Hollis Walker: That’s right. That’s all the time we have today. You’ve been listening to Away from the Noise with me Hollis Walker, your host and Jan Blakeley Holman, director of advisor education at Thornburg Investment Management. If you’d like to suggest a topic for us, email us at awayfromthenoise@thornburg.com. If you’d like to hear more episodes of Away from the Noise, you can find us on Apple, Spotify, Google podcasts or your favorite audio provider, or by visiting us at thornburgh.com/podcasts. Jan can also be found on LinkedIn. If you like us, subscribe, share us on social media and leave us a review. Until next time, thanks for listening.

This podcast is for informational purposes only, and should not be relied upon as investment, legal, accounting, or tax advice. It is not intended to predict the performance of any investment or market, and is not a recommendation, offer, or solicitation to buy or sell any security or product, or adopt any investment strategy. Past performance is not an indication of future performance. Investing involves risk including possible loss of the money you invest. Consult your investment advisor before making any investment decisions. The information contained herein has been obtained from sources believed to be reliable. However, Thornburg Investment Management makes no representations or guarantees as to the accuracy or completeness of the information and has no obligation to provide any updates or changes. The views expressed are subject to change and do not necessarily reflect the views of Thornburg Investment Management. This podcast is for your personal and non-commercial use only. You may not use it in any other manner without the prior written consent of Thornburg Investment Management. Thank you for listening.

Important Information

This podcast is for informational purposes only and should not be relied upon as investment, legal, accounting or tax advice. It is not intended to predict the performance of any investment or market, and is not a recommendation, offer or solicitation to buy or sell any security or product, or adopt any investment strategy. Past performance is not an indication of future performance. Investing involves risk including possible loss of the money you invest. Consult your investment advisor before making any investment decisions.

The information contained herein has been obtained from sources believed to be reliable. However, Thornburg Investment Management makes no representations or guarantees as to the accuracy or completeness of the information and has no obligation to provide any updates or changes.

The views expressed are subject to change and do not necessarily reflect the views of Thornburg Investment Management, Inc. This information should not be relied upon as a recommendation or investment advice and is not intended to predict the performance of any investment or market.

This podcast is only for your personal and noncommercial use. You may not use it in any other manner without prior written consent from Thornburg Investment Management.