Financial Planning for Women

Wealth planning for women

More women than ever are following their own careers and enjoying significant earning potential. So, when it comes to managing money, are things different for women who are high earners? George Howard, Chartered Financial Planner, looks at some of the key factors for women when it comes to financial planning and managing wealth.

Some of the fundamentals of financial planning and managing wealth are the same – regardless of age, attitudes or gender. Most of us realise that good financial health doesn’t just happen, and that it’s important to plan – from thinking through what the priorities are, to putting a strategy in place to achieve those goals and regularly reviewing that things are on track. This has become even more relevant given longer life expectancies, fewer defined pensions schemes and the growing awareness that intergenerational wealth is affecting more and more families.

Despite these shared issues, some nuances remain, especially if you’re a woman, and planning how to better manage your wealth.

How has the financial landscape changed for women?

It hasn’t been that long since the majority of financial planning was typically handled by one partner – typically the male. In fact older women are much more likely to have deferred to their husbands to manage finances, especially when it comes to large financial commitments.

But in the last ten years things have shifted significantly; more women have their own careers, and there’s a higher proportion of high net worth individuals who are younger, female and have generated their own wealth – rather than inheriting it.

Despite these changing times gender role expectations are hard to shake off, and there’s still a tendency for fewer women than men to seek out financial advice. As a result there’s still some way to go to in empowering women to become more active about their own financial decision making, but it’s clear that the younger women are and the more wealth they accumulate, the less these constraints seem to apply.

Do women think about money differently?

Women with higher net worth tend to have different views of money too. Compared to men the overwhelming majority view money as a tool to help make an impact on the world and enable them to achieve their purpose. They are also more likely to give to charity. As a result investment approaches such as impact investing and ESG are of greater relevance for women who prefer using wealth to invest sustainably.

There are also some differences in some of the key financial topics which take priority too. Concerns about Inheritance Tax for heirs, and giving and receiving an inheritance is higher on the priority list. And women are more likely to consider risk more and be aware of the wider consequences of the impact of money and investments, taking into account social and human consequences, rather than just financial ones.

What are the key steps when wealth planning?

Even if you’re a woman with wealth, there are still some hurdles when it comes to financial planning. Gender pay and the gender pension gap remain key issues – and need to be factored into any pension or retirement planning. Understanding these challenges, and the context in which to best manage wealth are a good first step. It’s also vital to consider what’s important in terms of financial goals and aspirations – what is it that matters most and what does financial freedom really look like for you. Speaking to a qualified financial adviser can help turn your priorities into a solid financial plan, enabling you to enjoy your wealth and use it effectively.

To discuss any aspect of your financial plans, please contact your nearest office.