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Industry Spotlight > Women in Wealth

Women Less Optimistic Than Men About the Market: Nationwide

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Female investors are less optimistic than their male counterparts about the market and economy regardless of their affluence or access to a financial advisor, Nationwide Advisory Solutions reported Monday.

In a survey conducted by The Harris Poll, 56% of women said they were optimistic about their financial outlook for 2019, compared with 53% of men.

However, only 36% of women were optimistic about the U.S. stock market this year, compared with 50% of men, and a similar gap surfaced concerning the U.S. economy.

Women in the survey were also less financially prepared than men.

“It’s clear that women are highly attuned to the uncertainty in the market and the economy, and that they need more help to protect against these potential risks,” Kristi Rodriguez, leader of the Nationwide Retirement Institute, said in a statement.

Fifty-seven percent of female investors in the survey expressed concern about a U.S. bear market, versus 51% of men, and 60% of women worried about a U.S. economic recession over the next 12 months, versus 57% of men.

Two-thirds of both female and male investors anticipated that market volatility would increase over the next year. Likewise, women and men were about equally likely to say that protecting assets was among their chief financial concerns.

Yet, only 56% of women said they had a strategy in place to protect their assets against market risk, compared with 71% of men.

Women also were slightly likelier than men to worry about outliving their retirement savings, but were much less likely to have a strategy to protect against this eventuality.

Both women and men said Social Security was their main solution, but women were more reliant on it than men — 78% of women cited it as a form of protection from asset depletion versus 66% of men.

Women were also far less likely than men to report that they used other guaranteed income solutions to protect against outliving savings, such as deferred income annuities and qualified longevity annuity contracts, and somewhat less likely to use single premium immediate annuities.

“As seen year over year, more women are seeking the help of advisors to solve their concerns, from protecting assets and saving for retirement, to managing volatility,” Craig Hawley, head of Nationwide Advisory Solutions, said in the statement.

“These advisors have an opportunity — and a responsibility — to understand women’s needs and help them establish a holistic plan that can help them manage through the current uncertainty while helping them remain focused on long-term goals.”

The survey findings were based on Nationwide’s fifth annual Advisor Authority study of some 1,600 individual investors, RIAs and fee-based advisors.

The Gap Persists

The survey found that the percentage of female investors working with a financial advisor increased from 44% in 2016 to 58% in 2019. But they were somewhat less likely to do so than men, 64% of whom had an advisor in 2019.

Even when women worked with an advisor, the optimism gap with men persisted, according to the survey. Forty-one percent of women investors with an advisor said their outlook for the U.S. market over the next 12 months was optimistic, compared with 55% of men, and 34% were optimistic about the American economy, versus 52% of men.

In turn, over the next 12 months, 70% of women with an advisor anticipated an increase in market volatility, 65% were concerned about a U.S. bear market and 69% worried about a U.S. recession, compared, respectively, with 66%, 53% and 60% of men with an advisor.

The optimism gap narrowed for high-net-worth investors with between $1 million and $5 million of investable assets and ultra-high-net-worth individuals with more than $5 million of investable assets.

Forty-four percent of more affluent female investors said their outlook for the U.S. market over the next year was optimistic and 48% said the same about the economy, compared with 55% and 57% of men.

Sixty-five percent of more affluent women anticipated an increase in market volatility and 61% were concerned about a U.S. bear market, versus 59% and 56% of men. Three in five female and male investors expressed about an economic recession.

Women’s financial preparation also lags men’s regardless of their wealth and access to financial advice, according to the survey.

Even women with an advisor were less likely than men with an advisor to have a strategy in place to protect their assets against market risk — 63% vs 74% — and to have a strategy in place to help protect against outliving their savings — 68% vs 79%.

The same was true for more affluent women, 45% of whom said protecting their assets was a top concern, versus 31% of men, yet they were still somewhat less likely than men to have a strategy in place to protect their assets against market risk.

The study noted that although more affluent investors were likelier than their less affluent counterparts to have a strategy to help protect against outliving their savings, wealthier female investors were still marginally less likely than more affluent male investors to have such a strategy.

— Check out What Advisors Don’t Get About Female Clients: Barbara Huson on ThinkAdvisor.


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