Women live longer and earn less money than men. Statistically, they also tend to know less about how to make smart investments.
For many women, the golden years are looking pretty lean. That’s why financial planner Tiana Ronstadt is bewildered as to why firms and agents in her industry aren’t working harder to gain female clients.
“We live longer, we die slower, and we are going to inherit the wealth,” she said. When their spouses die, such women will get a crash course in money management when it’s likely too late to change their financial situations, said Ronstadt, who is affiliated with Woodbury Financial Services, a subsidiary of The Hartford.
Not only that, but financial planners — overwhelmingly male themselves — often dole out orders, command-like, without taking time to understand the client’s individual situation and goals, or to help clients realize what’s happening to their money. That approach can be especially discouraging for women who still struggle with this historically male territory, said Sandra Baranowski, a Manchester-based certified financial planner.
A Man’s World
Many women wealth advisers take a different tactic than their male counterparts. Knowing the numbers and the facts on investments is only part of the job — in addition, financial advisers become more like counselors and educators as well, Baranowski said. Money is an emotional hot button issue, and clients are facing tough decisions on their future and their children’s financial stability.
“There’s a bonding that goes on with a client,” Baranowski said. “You’re helping them improve their future.”
Ronstadt believes the financial planning industry is on the verge of a major shift as more women take on more powerful roles as holders of wealth. But at the moment, financial planning is still very much a man’s business. About 77 percent of certified financial planners are men, and although an official head count for other wealth advisers isn’t available, anecdotal evidence suggests that women comprise a tiny minority of the overall ranks.
As clients, too, men often take the lead in managing wealth. The Financial Planning Association Journal published “New Insights into Advising Female Clients on Investment Decisions” in March showing that despite gains in the past decade, women still tend to be “less knowledgeable, less risk tolerant, and less confident about their investment decisions than men are.”
This is usually chocked up to a strong historical precedent: Women have long been conditioned to leave the money decisions up to the men in their lives.
Before she was a financial planner, Jan Johnson was a confused divorcee who was finding it difficult to arrange her finances after she split from her spouse. The advisers she dealt with talked over her head and mostly just gave directives without explanation.
A Holding Hand
“I was tired of people who were selling me stuff, but not helping me understand it,” she said. She found a female wealth adviser who was willing to take the time to understand her goals and priorities, and Johnson became interested in the profession enough to return to school and become a certified planner herself.
She never wants to become the kind of planner who takes a paternalistic approach to her clients’ lives: “I’m not going to be the father or the mother figure. I’m the coach,” she said.
Anthony Pace, a planner with Lindberg & Ripple, Inc., in Windsor, said women planners do tend to be adept at understanding the nuances of a client’s situation, and that some have done extremely well professionally because they’ve targeted female clients.
But remember, he said, many women are insulted by the idea that they act differently as planners or should be treated differently as clients.
“They say, ‘Don’t treat me like you’re surprised I’m here,’” Pace said.
Not so for Ronstadt, who scoffs at the “I’m just one of the boys” attitude, and proudly dispenses pink business cards and frequently incorporates the color into her wardrobe.
Women do approach the topic differently, she said, and women advisers are far more interested in building relationships with their clients and speaking as equals. Male advisers, on the other hand, typically just “really enjoy sounding smart.”
Financial planning firms are frequently behind the curve in working to connect with women clients and educate them on their options, but that is starting to change.
“It’s just another women’s movement.”
