Julie Jason: A role for gender in investing?

Is current market volatility affecting women investors differently than men? What about women who are breadwinners or have a high net worth? Do gender differences matter when it comes to investing? Do women investors prefer women advisers?

Although it’s too early to tell how the coronavirus market decline we are experiencing now is actually affecting investor decisionmaking, there are earlier studies that can shed some light on gender differences.

Women investors have been put in a big box over the years, and that box is just too big to be helpful.

Studies that take a very broad swath of the population report that women are “anxious” about market volatility. For example, a 2019 study found that “women might be feeling worried about what they see happening in the markets, since nearly half of women say volatility in the market is making them anxious,” according to the Allianz report quoting Aimee Lynn Johnson, its vice president of financial planning strategies.

The Women, Money and Power Study was commission by Allianz Life Insurance Company of North America and sampled women with a household income of $30,000 a year or higher.

What about a smaller slice of the female demographic?

When considering highnet-worth primary breadwinners, women were found to have a lot in common with their male counterparts, from “financial acumen and confidence to time constraints and lifestyle goals,” according to Flexshares’ “Rethink How to Win Executives: The surprising impact of gender on engaging HNW breadwinners” (April 2019).

That’s something to think about. These women are less likely to care about the gender of their financial advisers. Only 12 percent cared, compared with 25 percent of men. More men (39 percent) considered leaving their advisers than women (20 percent).

These women’s top investment goals were similar to those of the men in the study. The two top goals were income generation (40 percent women and 34 percent men) and capital appreciation (37 percent men and 31 percent women). Risk management came in third place for both men (18 percent) and women (17 percent). Liquidity management came in fourth for both men and women (both 12 percent).

There were some differences in financial goals. Women’s top three financial goals were: 1) be prepared for the worst (69 percent); 2) plan for retirement (56 percent) and 3) philanthropy (54 percent). Men’s top three financial goals were 1) provide for future generations (70 percent); 2) have an adviser I can trust (69 percent); and 3) take care of dependents (62 percent).

Women of wealth may not care about gender unless they are divorced or widowed. Among married and single women, more than 90 percent did not have a gender preference, according to a Women of Wealth study in 2011 conducted by the Family Wealth Advisors Council. That was not the case with women who were divorced or widowed: One in four reported a strong preference for a woman adviser.

In my own experience as a woman who got her start on Wall Street as a lawyer and later an executive, I am personally gender-neutral when it comes to financial or business expertise. I can understand, however, that women going through a transition, such as divorce or loss of a spouse would want more than just expertise. Empathy and communication styles are most important during such transitional periods.

For example, the Allianz study found that more than half (60 percent) of married women who worked with a financial adviser said that their financial professional treated their spouse/partner as the decision-maker — something I certainly would not find acceptable or appealing.

Should women seek out a different financial adviser if theirs fails to communicate properly? Absolutely, and so should men.

On another note, a few readers reached out about two of the questions from the financial literacy quizzes that were mentioned in my column of Feb. 21, 2020, “Are you likely to save for retirement?” If you are curious, here is a link to my response: juliejason.com/ blog/readers.

One more thing, if you’re approaching your 70s and live near Greenwich, I invite you to a presentation I’m giving at the Greenwich Library (101 W. Putnam Ave.) on Thursday at 6:30 p.m. Topic: “Smart Ways to Plan for Retirement Account Withdrawals after Age 70/72,” which focuses on creating a plan to manage RMDs, potentially through decades of retirement. To register, visit tinyurl.com/u9z3h8p or contact Yang Wang, 203622-7924, ywang@greenwichlibrary.org.

Julie Jason, JD, LLM, a personal money manager (Jackson, Grant of Stamford) and author, welcomes your questions/comments (readers@juliejason.com). Her awards include the 2018 Clarion Award, symbolizing excellence in clear, concise communications. Her latest book, a curated collection of Julie’s columns, is “Retire Securely: Insights on Money Management From an Award-Winning Financial Columnist.” To hear Julie speak, visit juliejason.com/events.