Many women are deferring long-term financial decisions to their spouses, which puts their future financial security at risk, according to a UBS survey.
The survey of nearly 3,700 high-net-worth married women, widows and divorcees in nine countries found that 85% of wealthy women take care of day-to-day expenses. Yet, according to the study, few take the lead in managing their own long-term finances: Only 23% of women globally take charge of long-term financial planning decisions.
“Women in general are super comfortable being in the day-to-day money and finance issues,” said Jane Schwartzberg, head of strategic client segments at UBS Global Wealth Management, during a recent press event in New York. “However, when it comes to long-term planning, they are saying — or somebody is saying to them — that’s not your place or that’s not my place.”
The study, which largely takes a hetero-normative view of relationships, found that more than half of women globally (58%) defer to their spouses to manage critical, long-term decisions. According to the study, women who defer to their spouses have many reasons for doing so, such as more urgent responsibilities, a lack of interest in long-term finances and even discouragement from their spouses.
The main reason why women abdicate long-term investing decisions, however, has to do with women’s assumptions of who knows more about the topic in the relationship.
According to the study, 82% of women think their spouses know more about long-term finances, citing this belief as their top reason for deferring.
Surprisingly, according to the study, younger women are perpetuating the status quo.
The study finds that younger women are even more willing than older women to leave investing and financial planning decisions to their spouses.
Nearly 60% of women between the ages of 20 to 34 let their spouses take the lead, compared with 55% of women over 50.
Most of the younger women surveyed said they have more urgent responsibilities than investing and financial planning. They are also most likely to believe their spouses know more about long-term finances than they do.
One 38-year-old American woman told UBS, “I’m exhausted with running around with the toddler and have fears about my own lack of investing knowledge.”
According to Marielle Schurig, account vice president at UBS Financial Services Inc., this type of thinking is “deeply ingrained in our culture.”
Schurig pointed out that it hasn’t been that long since women started to get financial rights. For example, women couldn’t get their own credit cards without a man signing for them until the Equal Credit Opportunity Act of 1974 made it illegal to refuse a credit card to a woman based on her gender.
“It’s amazing to me that we’re in this new-age feminist generation — as women, we’re breaking glass ceilings, running for political office in record numbers, starting and running companies — but when it comes to money, we’re still pushing those decisions to men,” Schurig said.
Schurig is a partner of a multigenerational team of financial professionals who specialize in providing asset management and comprehensive financial planning solutions to high-net-worth and ultra-high net worth families, entrepreneurs, corporate executives and women in transition.
“It’s our job as advisors to understand how to tailor these conversations, not just to women and different groups of women but also different ages,” Schurig stressed.
Few women realize the consequences of deferring until after a divorce or the death of a spouse. And, as women’s life expectancies increase and divorce rates remain high, more women may find themselves solely responsible for their own finances.
“Women are living longer, divorce rates are high … [and] women are choosing to not be in long-term partnerships,” Schwartzberg explained. “The bottom line is 8 out of 10 (women) will be solely responsible for [their] financial well-being and not just for a year or two or three, but for some much greater than 10 years.”
With the wisdom of hindsight, 76% of widows and divorcees in the study said they wish they had been more involved in long-term financial decisions while they were married. In addition, nearly eight in 10 urged other women to take a more active role.
According to the report, there is a simple fix: working together as a couple.
“The only way we’re going to address it is by bringing women and men into the conversation,” Schwartzberg said. She added that, “all women and all men have to be part of the solution, part of the encouragement of bringing women equally to sit at the financial table.”
According to the study, women who share equal responsibility for long-term investing with their spouses said there were clear benefits.
More than nine out of 10 of those women said they felt less stressed and were more confident about their financial future, believing they and their partners made fewer mistakes when they were both involved, the study found.
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