Younger women are more interested in financial issues than their older counterparts, but lack to confidence to take action on those interests, according to a study from Allianz Life.
As part of its 2013 Women, Power and Money Study, which was conducted in December 2012, Allianz released further data that focuses on the youngest respondents, those between 25 and 34. The report found that those women were more likely than older groups to say they were interested in financial topics like planning and investing, compound interest, market capitalization, debt ratios and bond ratings.
Interestingly, they were significantly more likely to say they were interested in retirement planning. Seventy-seven percent of millennial women said they were interested in retirement planning, compared with 66% of the next most interested group, the 35- to 44-year-olds.
That interest hasn’t translated to action, though. Allianz suggested that may be due to younger women lacking the confidence to follow up on their interests.
“In general, women tend to feel less confident,” Katie Libbe, vice president of consumer insights for Allianz Life, told ThinkAdvisor on Tuesday. They may wonder, “’Am I even worthy of having a financial advisor? Do I need to have $500,000?’ They just lack a lot of confidence, and that comes out a lot more among millennial women because they’re just starting out. “
Even among young women who work with a financial advisor — an already low number, as 84% of millennial women say they don’t — more than 40% said they don’t know what information to ask for.
“Millennial women aren’t really using financial professionals, which on the surface might make sense because they may not have that much money, but some advisors are not just in it for the wealth management. They truly are there to help individuals learn how to become better savers and how to begin to put together a better portfolio.”
Although almost half of millennial respondents said being single meant they didn’t have to do any “serious thinking” about financial planning just yet, 39% of married millennials said they leave investing to their husbands or partners, while they focus on saving.
“I think it’s a throwback to that Cinderella perception that someone’s going to come along and do it,” Libbe said. “Younger women might feel as though men know more about money. As they gain confidence and start taking action, I think what they’ll find is, ‘You know what? I know just as much about this stuff as my partner does.’ I think because they’re not engaged yet, they lack confidence so they think somebody else is probably more able in that area.”
Libbe noted that there are opportunities for advisors to grow their business if they can reach these investors early.
“Financial advisors, it seems to me, apply the same service model to all their clients, and it may not be cost-effective to do so with a younger clientele. But the millennials, if you get them early and you work with them, they will develop into the next generation of mass affluent clients. You want to get them early because by the time they’ve accumulated assets, if they’re with an advisor, they’re not going to switch.”
Check out Throw the Bums (Adult Children) Out! on ThinkAdvisor.