Women’s money worries have worsened over the last year: Here’s how advisors can help

In the wake of the pandemic, women have a more positive outlook on their careers, relationships and caregiving responsibilities – nearly everything, that is, except their finances.

Amid current economic factors such as 40-year-high inflation, 47% of women say their outlook on money and the economy has gotten worse over the past year, likely contributing to the burnout so many women are dealing with, research by Fidelity Investments found. As a result, many are looking for guidance on their long-term financial outlooks.

“One thing advisors can do is forge a connection with their clients, to understand their goals and lifestyles,” says Lorna Kapusta, head of women investors and customer engagement for Fidelity. “In doing so, advisors can help clients make a stronger financial plan that will help their clients achieve their goals and gain more financial confidence, especially in times of economic uncertainty. It’s a great example of how advisors can rethink and increase the value they are providing to their clients beyond money management.”

Among the key findings of the research:

• 53% of women cut back on non-essential expenses and entertainment in the past year.
• Within the next 12 months, some plan to pay down debt (39%) and start or add to an emergency fund (30%).
• When looking beyond the immediate future, however, the short-term actions women took likely will not eliminate their three primary stressors in a significant way, which include inflation (71%), cost of essentials (65%) and not having enough saved for emergencies (58%).

One challenge is that women historically have not taken an active role in short- or long-term planning, Kapusta said.

Related: Women’s financial health has hit a 5-year low, report says

“Long-term planning is essential when managing your finances, as it’s one of the ways to ensure financial confidence when things happen out of your control, such as inflation, a potential recession or layoffs at your company,” she said. “This is another area for advisors to help female clients, by accounting for this “blind spot,” which is a key opportunity that financial advisors can help women with — creating a financial roadmap that’s unique to their needs. Advisors should ensure clients are setting up both short- and long-term goals to help develop plans that match their priorities.”

On the positive side, research found that many women believe they can succeed in their job (84%); are more satisfied with the flexibility of their work schedule (80%); and have a good work-life balance (77%). Compared to one year ago, career satisfaction among the younger generations in particular has increased, with Gen Z (31%) and millennial (31%) women reporting a favorable view of their or their spouse’s job security compared to Gen X (21%) and boomer (21%) women.

Advisors should recognize that women and men tend to view financial success differently, Kapusta said.

“For men, they focus on the monetary amount they gain from investing,” she said. “For women, they focus on how their investments can help achieve a future goal. This is why it’s so important for advisors to understand their clients’ goals, especially women clients.

“Given women’s top three main areas of stress, financial advisors could work with their clients to educate them on these topics and help identify money moves to help ease concerns. In doing so and in helping map money goals, advisors can help clients have their money work harder for them and feel more confident in their financial futures.”

Free, four-week virtual event

Recognizing this need for financial education, Fidelity is presenting Invest in You, a free, four-week series of virtual events, launching this month, to provide women with the tools and resources they need for approaching their short- and long-term goals for a successful financial future. For an overview of the schedule and to register for the events, please visit: Fidelity.com/InvestInYou.