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November 05, 2013 at 08:52 AM
Women aren’t taking enough risk with their investments or their careers, say two prominent women in financial services.
Sallie Krawcheck, the former head of Merrill Lynch and Smith Barney who now heads the global women’s professional network 85 Broads, included women’s resistance to investment risk in her list posted Tuesday of the top 10 financial mistakes women make.
Krawcheck listed women’s aversion to investing risk at No. 7, noting that while it may sound “counterintuitive” for women to gamble since they tend to live longer than men and retire with less in savings, women still “need to push themselves” to take “somewhat greater (but still prudent)”risks to get a higher return.
But Eleanor Blaney, consumer advocate for the CFP Board, told ThinkAdvisor that women’s risk aversion is actually “the most common, as well as the most detrimental” financial mistake that she’s seen women make.
While women fail to take enough risk with their investments, they also do not take enough risk in their careers, Blayney says, “which is one reason why nine to five jobs, such as you find in teaching, health services and government are still populated primarily by women, whereas more entrepreneurial professions are still dominated by men.”
Krawcheck agrees that an advisor will usually be a “him.”
Indeed, women “represent only a quarter of CFPs, and this number has not changed much in quite a long time,” Blayney says. “We hear from many women that they can’t enter a field such as financial planning where compensation often reflects the planner’s efforts to build a practice and clientele, because they need the assurance of a relatively high base level of compensation immediately.”
