Lending A Feminine Spin To Your Marketing Strategy
Looking for a fresh idea to serve baby boomer women? Then consider creating an all-volunteer, not-for-profit money club where they can go to discuss personal financial issues.
Candace Bahr and Ginita Wall, financial advisors and co-founders of the Womens Institute for Financial Education, did just that in 2003. The results to date have been eye-catching: Some 40,000 womenmany of them from the far corners of the globeclick on to their Web site, moneyclubs.com, each month.
And what do they discuss?
“We hear a consistent refrain,” says Bahr. “Their biggest concerns are consumer debt, educating children and retirement planning. Those issues typically arent brought up in investment clubs.”
The institutes online initiative, the goal of which is to get 1 million women involved in money clubs nationwide, is founded on a central tenet: Men compete, but women are predisposed to comparing and cooperating when making decisions. So, theyre more inclined than their male counterparts, on average, to seek information and advice on money matters.
To judge by the latest poll numbers, the overwhelming majority of women say they need help. A study released in June by Newark, N.J.-based Prudential Financial observes that, of 1,134 women surveyed in February 2004, more than 80% require counsel when making financial decisions. And 26% want assistance in almost all areas of financial education.
Underpinning the numbers, says Maria Umbach, a vice president for individual life product marketing at Prudential, is the fact that many more boomer women today are taking responsibility for financial decisions. For example, 92% of Prudentials respondents have sole or joint responsibility for long term care products. Thats up from 66% in 2002 and 60% in 2000.
Likewise, 91% of those polled said they have sole or joint responsibility for annuities, compared to just 60% two years ago. Regarding IRAs, the margin was similarly wide: 95% in 2004, vs. 66% in 2002 and 61% in 2000.
Why the dramatically higher numbers this year?
“One reason is there are a lot more women in the workplace,” says Umbach. “Also, theres been a breakdown in traditional roles, with many women now serving as the partial or sole breadwinner.”
Paradoxically, however, while womens financial responsibilities have risen, their confidence levels have plummeted.
Boomer women who said they were “very” or “somewhat sure” of the amount of money they would need for a secure retirement dropped to 51% in 2004 from 83% in 2002. And, 97% this year indicated that maintaining a comfortable lifestyle during retirement was important, but only 57% believed they could achieve it.
The crisis of confidence and the knowledge gap span income brackets. Cindy Hounsell, executive director for the Womens Institute for a Secure Retirement (WISER), Washington, D.C., says retirement concerns are especially acute among the organizations largest clientele, boomer women who earn less than $50,000 annually.
To help them tackle the challenges, the institute hosts seminars on various aspects of budgeting and retirement planning. The nonprofit outfit is supported by government funding and by partnerships with organizations through which WISER reaches prospects. Among them: the American Association of University Women and the General Federation of Womens Clubs.
More initiatives like WISER are needed, says Hounsell, especially for low and middle-income minority women. She notes, for example, that Hispanic women live on average longer than women in other ethnic groups, yet they have the least amount of money for retirement. Among immigrant women, the situation is even more dismal.
“Immigrants tend to send excess moneys to family and relatives in their home countries,” says Hounsell. “When I work with this community, I always tell them to be a little selfish and to set aside some of the spare funds for retirement.”
To provide an incentive, Hounsell advocates renewal of the Savers Tax Credit. Due to sunset with the close of the 2006 tax year, the non-refundable tax credit is available to individuals who make contributions to certain employer-sponsored qualified plans (including the 401(k), 403(b), SIMPLE and SEP plans) and to people whose income does not exceed $50,000 (the eligible credit rate varies by filing status and income level).
Help of a different sortguidance in dealing with the emotional factors that influence spending habits and retirement planningwould benefit many high-net-worth boomer women, says Bahr. The need is all the greater, she observes, for affluent women who, having recently divorced or become widowed, are experiencing both psychological and financial strains.
“Many of these women in transition have seen their incomes and assets cut in half,” says Bahr, who is also a managing partner of Bahr Investment Group, Carlsbad, Calif. “So, our firm spends a lot of time on emotional issues.
“Relating to the client on this level is less a function of showing how to maximize a return on investment,” she adds. “Its more about showing how money is intertwined with your life. Women get that.”
Reproduced from National Underwriter Edition, July 22, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.