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Mariska Comins | Female financial planning: SA women will likely outlive their male partners

Mariska Comins | Female financial planning: SA women will likely outlive their male partners
19-08-22 / Mariska Comins

Mariska Comins | Female financial planning: SA women will likely outlive their male partners

Johannesburg - Despite some changes in recent years, women still have a tendency to leave financial affairs to their husbands. Often, women are far removed from the detail and this could be an obstacle when they need to make financial decisions they have little experience or knowledge of. Divorce or the death of a spouse can turn the best laid financial plans upside down. 

John Gray's acclaimed book "Men are from Mars, Women are from Venus" highlights the psychological and behavioural differences between men and women. These differences can be seen in their approach to financial decision-making. While men tend to be risk-taking aggressive investors, women are generally more risk-averse and goal-oriented. 

Why is advice different for women?

Women tend so share emotions more openly with others. We worry more about financial issues because we are concerned about the well-being of our family. We are also goal driven for example saving for children's education, a daughter's weddings, a dream home etc.

Women look for advisers who have empathy, someone with shared experiences, someone they can share money worries with, without fear of ridicule or explanation, someone who understands their aspirations and vision. Since women require more surety on financial matters, they tend to be more receptive to professional advice. 

As a result, women often find comfort working with a female financial adviser, in a historically male dominated industry.  It is very encouraging that there has been a shift in the number of female financial advisers over the past decade. PSG has one of the largest networks of female advisers in the industry with circa 40% of its total adviser base being female (including PSG Wealth and PSG Insure advisers).

Women take time to explore investment opportunities and need to understand the "bigger picture" of a financial plan and investment selections. Studies show that women spend more time researching their investment choices. This allows them to make informed, confident and stress-free decisions. While they do take on less risk than men when it comes to investing, that doesn't mean they are completely risk averse. Women are more likely to take on appropriate levels of risk with investments. They ask experts for guidance on behaviour which leads to for example lower volume of trade in portfolios and staying invested for longer. These findings make for better investment outcomes. 

Women outperform men by 0.4% on average, according to Fidelity's 2021 Women and Investing Study. This positive margin seems small but could be substantial on a compounded basis.

Why should women educate themselves on financial matters as early in life as possible?

Statistics show that women tend to survive their husbands, and often they inherit a large sum of money quite late in life. It can be a big challenge for women to start making life-changing financial decisions at an emotional time, when they may never have done it before. Therefore, it is important for women take a shared approach and responsibility for managing the family finances, and to be included in decisions that affect the family's financial position.

Coaching your family on financial matters and ensuring that your family will be cared for in the event a partner's death is one of the most important acts of love for any couple. Encourage your partner to consult your adviser as a couple. Clients who are emotionally invested in a financial plan always have a higher success rate in terms of implementing their plan and realising their goals. Make sure you educate yourself well enough to make educated financial decisions with the assistance of a trusted financial adviser.

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