From the November 2006 issue of Research Magazine • Subscribe!

November 1, 2006

Women, Money and Power

Research: Do successful women still fear becoming bag ladies?

Zesbaugh: I go right back to the survey on this one. Our data specifically indicated that 50 percent of the women who were surveyed who are making over $100,000 a year still feared becoming a bag lady. That was somewhat surprising. Where does this come from? There are several demographic factors; women are living longer and are more educated today than before, and I think women are also more independent than they were before. In addition, you see more single women today than before. But the fact they're living longer is the primary factor. It was surprising to see that many women in the high-net-worth population feel that way -- a higher proportion than those of less net worth, in fact.

Is this even true of those who are working with an advisor?

We looked at the survey group as a whole and found that 40 percent of them had said they used or had used a financial advisor. Furthermore, 18 percent are currently still using a financial advisor on a consistent basis. What we did find out was those who do work with a financial advisor feel more empowered -- they're 50 percent more likely to have more financial security, more clarity and more satisfaction.

Do prospects of different genders look for the same things in an advisor?

We didn't specifically ask this of both men and women, but we did find something interesting when surveying the women. We put them into character roles. "Cinderella" is a reliant personality who wants to find a Prince Charming to make everything OK. The "Alice in Wonderland" type is confused by all the choices in front of her. "Wonder Woman" is confident that she can handle whatever comes her way. "Belle" makes her decisions in close consultation with a partner, on an equal basis. And "Goldilocks" is self-reliant and able to do things on her own because she does thorough research before making a decision. Where this is interesting is that most women fell into the category of Goldilocks or Belle. In other words, they were very self-reliant, or else they wanted to handle things with their partners.

How is Allianz incorporating this information into its business?

We're in the process of developing tools that will differentiate Allianz when our advisors deal with this crucial market. Remember, women already control 51 percent of the wealth in the United States, and by 2010, according to Department of Labor statistics, they'll control 61 percent of U.S. wealth. We're trying to condense the information in a way that makes sense for our advisors to use in their marketing brochures and other materials.

How can an advisor be more effective in dealing with women?

What I see in dealing with financial advisors is that it's really all about understanding the needs and wants of your individual clients and prospects, really understanding the world from their perspective, not your perspective. With women (as with men), there are different types out there, so don't come to them with preconceived notions of what someone might want. If lack of knowledge is the biggest barrier to investing, coming into it with a female's understanding, they may need additional education before we come into the discussion of product. These elements of building trust, being an effective listener and keeping things simple are very, very important when dealing with women -- but equally important with men as well.

How should the industry as a whole respond?

The number of women earning $100,000+ quadrupled in the last decade; 60 percent of women with business degrees today out-earn their husbands.

Our industry is as a whole predominantly made of male advisors. We're looking for ways to recruit female advisors into the profession as well. I think it should be very promising, since women want to work with women, preferring those relationships at a ratio of, I think, two to one.

Is there a product solution also?

If you know you're protected for life, no matter how long you live, I would probably guess you won't have a concern of ever being a bag lady. There's a need for income you can't outlive. Given the dynamics -- concerns over the Social Security program, the lack of pensions being provided today and the various aspects of increasing longevity -- people are less concerned today about dying too soon then they are about living too long. The more we can educate the consumer about the distribution phase and the need for income for life, the better we're going to be as an industry.

With medical technology advancing as it is, are you protected against all the events that may occur, like inflation, critical or chronic illness? What happens when you do need to go into a nursing home? That's really where this industry is uniquely positioned to provide integrated solutions, and because of that, we as an industry can go a long way.

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