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Women Need to Talk More About Money: Fidelity

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The vast majority of American women in a new study by Fidelity Investments said they wanted to learn more about financial planning and get more involved in their finances within the next year.

However, many respondents said they had held back at some point from discussing money matters even with family and friends because the subject was “too personal.”

Reluctance to talk about financial topics occurred between women and their spouses and partners with whom financial assets are generally shared.

The study found that although 77% of women were confident discussing medical issues with their own doctor on their own, only 47% said they were confident talking about money and investments with a financial professional.

“Beneath women’s reticence to talk about money lies a lack of confidence in their knowledge of financial planning and investing,” Kathleen Murphy, Fidelity’s president of personal investing, said in a statement. “This confidence gap is really unwarranted.”

Murphy said studies had shown that women demonstrated stronger saving rates than men and had historically enjoyed better long-term investment performance when they did engage.

“Unfortunately, too many women still hesitate to take control of their investments,” she said.

At some point in their lives, according to Fidelity, the vast majority of women will be the sole financial decision maker of their household. Unless they solidly understand how to manage their money and invest, they could jeopardize their future and put their family’s financial security at risk, especially in the event of an unexpected life event that makes taking control of one’s finances a necessity.

Overall, 60% of women in the survey worried about having enough savings to last throughout retirement, with financial anxiety most prevalent among women born between 1965 and 1996 — Generations X and Y.

Many women’s lack of confidence was driven by a need for more in-depth understanding and experience with the investment process, the survey found.

Thirty-seven percent of women who were not confident in making financial decisions said they had not done research about their options, 36% said they lacked experience because they had not done much with finances to date and another 36% said they did not know whom to talk to for the best advice.

Competing demands for their time at work and at home only compounded the challenges they faced.

Global insights firm Kelton conducted the online survey on Fidelity’s behalf in October of 1,542 American women 18 and older, all of whom were employed or retired and had a qualifying retirement plan. In addition, 446 women in health care and 384 women in higher education, fitting the same criteria, were interviewed for a specific look at women in those sectors.

Proactive Savers

Notwithstanding the obstacles of confidence and experience to women’s becoming more actively engaged in their finances, the study also uncovered an upside.

Seventy-four percent of respondents said they were proactive about saving for the future. Fidelity reported that its customer data supported this assertion. Women at every income level contributed a higher percentage of their salaries toward workplace retirement plans their male counterparts.

Working women also showed more age-based asset allocation behaviors than their male counterparts.

Fidelity researchers looked specifically at women in the health care and higher education sectors, where they dominated the work force, and found that 67% of women exhibited age-based asset allocation, compared with 61% of men.

“Women are much more capable than they often give themselves credit for,” Murphy said. “The same discipline that makes them dedicated savers can also be applied to investing.”

The key, she said, was for them to take action now to ensure the money they have earned is working to achieve their life goals.

Getting More Financially Engaged

Fidelity offered five suggestions for women who prefer a do-it-yourself approach, want professional support or fall somewhere in between:

  • Kick-start your financial education at your own pace, using the wide variety of tools, tips and reference materials available online
  • Take advantage of workplace retirement guidance. The study showed that 65% of women were not tapping into such guidance when it was available at work
  • Work with an expert. Choose an advisor who communicates clearly about fees, professional designations and investment advice, and make sure ahead of time you are comfortable and can build strong working relationship
  • Find a financial “buddy” with whom to regularly discuss financial matters. This could be a trustworthy friend, family member, mentor or financial expert
  • Join an online conversation with other women looking to get more involved in their finances, as well as experts providing insights and guidance.

— Check out Sallie Krawcheck: Women Are ‘One Helluva Market’ on ThinkAdvisor.


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