If you’ve read Women and Wealth Part 1 and Women and Wealth Part 2, you’ve learned what may have been keeping you from investing so far. You’ve also taken stock of the unique pressures you may face as a female investor, and you know diversifying your portfolio can be key to addressing the range of challenges you’ll face in financial planning. Choosing an appropriate balance of diverse investments for your unique situation can seem complicated. To save you time and make sure you’re not overlooking any opportunities for earnings, a relationship with a financial advisor can be key.

Women who have financial advisors report feeling more confident about their later-life plans than those who don’t.1 Given that women face a different set of challenges than men, however, the advisor you choose should have expertise beyond product knowledge. They should be expert in listening to your priorities, understanding your unique situation and partnering with you in pursuit of your long-term success. If asking for a referral from your social circle isn’t uncovering anyone, don’t be afraid to ask for client references from advisors you’re considering.

Other Factors to Consider When Choosing an Advisor

Are they administering a plan without understanding your comfort level, or will they work with you at your pace? If you express that you’re risk-averse, your advisor should volunteer to find creative strategies that fit your risk tolerance. For example, they may recommend an approach called dollar-cost averaging.† This means that the investor commits to buying a fixed dollar amount of a particular investment on a regular schedule, regardless of the share price. As a result, the investor purchases more shares when prices are low and fewer shares when prices are high. This can help balance the highs and lows of the market.

The right advisor should also understand the financial challenges that women face, rather than proposing a one-size-fits-all approach. Most retirement calculators, for example, don’t include time taken off from work to care for kids or loved ones. If a potential advisor doesn’t ask about the likelihood of these events and adjust accordingly, that advisor may not be the one for you. The right advisor should ask about the other challenges discussed in our last article, such as expectations around funding your family members’ futures, including 529 plans for kids, and who’s going to do the caretaking for the aging adults in your life.

"The right advisor should also understand the financial challenges that women face, rather than proposing a one-size-fits-all approach."

It Takes Two: Making the Advisor Relationship Work

Be your own best advocate.
Even the best-intentioned advisors aren’t mind readers. If you don’t feel like your personal values or priorities are being incorporated into your portfolio, speak up! While women are not encouraged as often as men are to be assertive, keep in mind that these are your earnings and your future.

Get comfortable talking about money.
Even though women make the majority of day-to-day purchasing decisions for their households and manage the family budget, they still feel uncomfortable discussing money, even with their financial advisor. In fact, 61% of women would rather talk about the details of their own death than discuss money.2 If you’re worried you don’t know enough to start the conversation, HerMoney is a great website tailored to women and their financial needs. The Financial Freedom Studio also features a number of articles focusing on women and their unique relationship with money. Attending a seminar on financial planning focused on women can also provide a safe space where you know everyone is there to talk about investments, so you don’t have to worry about the subject being taboo.


It Takes Time: Commit to Your Commitments

Finally, understand that this is a long-term conversation, not a 15-minute quick fix. Planning in pursuit of financial freedom requires a continuing commitment to education and interaction, as well as a dedication to the lasting health of your advisor-client partnership.

Learn more about how women can form better relationships with their advisors in a story from NBC Today Show financial editor, Jean Chatzky.  

 

1 “The Journey to Financial Literacy,” Metia, commissioned by Jackson, 2019.

2 “Women and Financial Wellness: Beyond the Bottom Line,” Merrill Lynch, AgeWave, 2018.  

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† Dollar cost averaging does not assure a profit or protect against loss in a declining market. It involves continuous investing regardless of fluctuating price levels. You should consider your ability to continue investing through periods of fluctuating market conditions.

Investing involves risk, including possible loss of principal.

The opinions and forecasts expressed are those of the author and individuals quoted and should not be construed as a recommendation or as complete.

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