How to sell insurance to women

Prudential Financial’s recently released “Financial Experience & Behaviors Among Women: 2014-2015 Prudential Research Study” focused on women’s attitudes and behaviors toward money and financial goals. The study found that although women are assuming greater overall control of their family finances, they are not any more confident about their financial preparedness than they were 10 years ago. At the same time, though, the findings provide useful insights on how financial professionals can work more effectively with women.

Mixed progress

The current study is Prudential’s eighth biennial survey of women’s financial experiences and behaviors over the past 14 years. That span of time provides insights into how respondents’ attitudes and outlook continue to evolve. One clear trend is that as the economy and financial markets continue to improve since the 2008 financial crisis, women surveyed appear to be less worried about their financial security than they were in the crisis’s immediate aftermath.

That result is an improvement but there are other less positive indications. Despite the lessons of the 2008 financial crisis, the survey indicates that women today feel no better prepared to make wise financial decisions than they did a decade ago. Only 21 percent felt very well prepared then and that response is just 20 percent now.

In 2014, 75 percent of women surveyed say having enough money to maintain their lifestyle throughout retirement is very important, but only 14 percent are very confident they will meet that goal — a “confidence gap” of -61. That result is also virtually unchanged from 10 years ago, when the gap was -62.

Digging deeper

Many women face the combined hurdles of direction, time and money. Over a third of respondents who say they aren’t prepared to make wise financial decisions aren’t even sure what they need to consider when evaluating their options. A lack of money is another major impediment: 31 percent of women surveyed say the biggest impediment to planning for financial goals is simply not having enough disposable income to put toward them.

These findings indicate that financial professionals may need to adapt how they provide information and which solutions they recommend. Women who lack basic financial information and are pressed for time need straightforward educational materials they can review on their own schedules. Prospective clients who lack disposable income will require help developing spending plans that allow them to fund solutions that cover their basic risk management and savings needs.

Another important reason for the overall lack of confidence is that many of the women surveyed do not work with a financial advisor. That’s unfortunate because those who use advisors are more confident than their non-advised peers. More than half the women surveyed who use an advisor consider themselves on track or ahead of schedule in planning and saving for retirement, versus only 23 percent of those who do not use an advisor. While that’s not encouraging news from the financial services industry’s perspective, it clearly illustrates the market’s need and the business opportunity.

There are several possible explanations for the low usage of advisors. One is that technology makes financial information readily available. Misperceptions are another possible reason. Many women believe advisory fees are too high and that they lack sufficient assets to work with an advisor. Among millennials, for instance, 25 percent say they are not in the “right stage of life,” that is, they don’t have enough wealth, to work with an advisor.

What women want

Women’s top long-term goals focus on retirement, health care and debt. Specifically, this means having enough money to maintain their lifestyle in retirement and not becoming a financial burden to their loved ones. In fact, women define financial success as a financially secure retirement — that’s the most frequently cited metric of financial success, although responses vary by marital status.

Women surveyed who are the primary breadwinners in their household are most likely to think about financial success beyond the day-to-day financial concerns that all women have. In addition to a comfortable and secure retirement, they value being able to provide for others and having a financial cushion. In contrast, unmarried women respondents are most likely to define financial success as increasing wealth and being financially independent.

Some of the study’s findings challenge the industry’s self-perception. Only one in five women surveyed feel the financial services industry truly understands their needs. Despite the industry’s extensive, ongoing efforts to serve this market, it seems there is still a need to build relationships built on understanding women’s needs and goals.