A report released Tuesday by UBS drew a line between “financial decisions” and “investing” and found gender is a major factor in how those different responsibilities are handled by couples. UBS examined 10 core financial decisions, from day-to-day expenses to charitable donations, to see how couples manage their household wealth.
Some responsibilities are shared. Respondents said decisions about real estate and large purchases, estate planning and college planning are made equally by both partners. Additionally, men are just as likely to pay bills as women. However, half of respondents said investing decisions were made by the male partner. Just 37% of respondents said it was a shared responsibility.
That applies to younger women as well. Just 15% of millennial and 18% of Gen X women said they took the lead in making investment decisions.
UBS surveyed nearly 2,600 U.S. investors who were married or living with a significant other for the report.
Beyond the investing duties, 40% of respondents said the man in the relationship leads the couple’s financial decision making overall and 29% share decisions. Just 16% of decision making is led by the woman in the couple.
Interestingly, neither men nor women particularly enjoy being the primary decision maker, the report found. Jeff Scott, head of market research for UBS, said there are a couple of reasons for that.
First, he told ThinkAdvisor on Wednesday, is that “investing has gotten harder over the years. People have recognized after the financial crisis five years ago that with globalization, something that happens on the other side of the globe can have a huge impact on investments here. Investors are much more skeptical about long-term investing than they were prior to the crisis, and they feel they have to more actively manage their investments.”
The second factor, he said, pertains to couples trying to manage investing on their own. “If you’re doing it on your own, you may be following your viewpoint, but you’re not sure if you’re covering what your partner would like to do. If only one person is engaged in investment decisions, they tend to — particularly if it’s the man — they tend to default to using their risk tolerance.”
The survey found that tendency to default to one person’s risk tolerance is less satisfying to both halves of a couple, Scott said, than if they found a way to compromise. However, reconciling their clients’ risk tolerance might be difficult even if they’re both engaged in investing. The report found women were significantly more conservative and were holding more cash than men. Half of respondents said they had a different risk tolerance than their partner.
Interestingly, 16% of couples keep separate accounts so they can make decisions independently of each other. These couples were the most likely to have disagreements about money.
“That kind of goes to [how] if you separate accounts and do things on your own, you might avoid having to work through it, but it seems it eventually leads to more arguments. Perhaps one person’s a saver and the other’s a spender, and you wind up feeling like, ‘Why aren’t you doing this or that?’”