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HNW women drive many household decisions, says Schwab survey

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High net worth (HNW) women place great importance on investment performance and influence or drive many household financial decisions, according to the new Women and Financial Independence Study released today by Schwab Advisor Services.

Conducted to provide independent investment advisors with information on how best to serve the growing population of HNW women, the survey finds that 65 percent of respondents consider themselves financially independent and that women consider continuous, good investment performance more important than having a long-term financial plan (58% versus 39%).

That is not to say that planning isn’t important to HNW women. The survey, of 500 women between the ages of 30 and 70 years old with average investable assets of USD1.3 million, finds that women want their advisors to consider their long-term financial needs (84%), whole financial picture (82%), current life stage (70%) and even their children’s financial needs (35%). However, 40 percent of respondents also want advisors to take into consideration their immediate need for return on investments.

“Advisors will win the trust of women investors and build long-term working relationships by understanding as much about what women don’t want, as what they do want. Women, like any serious long-term investor, want advice that is intended for their specific financial situation, long-term plans for their desired lifestyle, and accountability in terms of investment performance against goals,” says Bernie Clark, executive vice president and head of Schwab Advisor Services. “We feel that advisors who excel in these areas will be most successful when it comes to working with high net worth women.”

While HNW women are clearly decision makers in their own right, shared decision making with their spouse/partner is also highly valued. For instance, 93 percent of those surveyed consider themselves the primary or shared decision maker for household finances (budgeting, bill paying) and 84 percent for investments. In addition, 68 percent – both single and married – believe that responsibility for financial matters should be handled equally by a couple. And respondents also want a collaborative relationship with their advisors, with 88 percent wanting to have a say in how an advisor invests their money.

The study also finds that married HNW women share most household financial decisions with their spouses/partners. This includes retirement planning (67%), health/medical (64%), investments (62%), home maintenance (56%), household budgeting (56%), and children’s education (51%). That said, a third (29%) of married women say that they would like to be more involved in the financial decisions for their household. And while the majority (82%) has a joint or shared checking account, many also have assets in their name alone, including 75 percent with their own retirement account, 59 percent with credit cards, and 49 percent with an investment account.

Three quarters of the women surveyed have an advisor, and of these, 25 percent chose the primary financial advisor themselves and 37 percent made the decision together with their spouse/partner.

Women are generally agnostic (87%) about whether their advisor is male or female.

“This study underscores that there is an equal opportunity for all advisors to serve this growing market,” says Clark. “Gender doesn’t set an advisor apart for these women. What does is the advisor’s ability to meet the high net worth woman’s needs and establish trust through a combination of planning, high-touch communication and demonstrated results.”

Interestingly, half of the women surveyed (53%) express a preference regarding the age of the advisor, with a fair number preferring an advisor in their 40s or 50s (22% and 25% respectively). Forty-seven percent had no age preference.

Even in an age of social media and technology, women still value face-to-face communications with 84 percent saying that in-person meetings are important for establishing trust. Women want in-person meetings for everything from the initial interview (78%) and long-term financial planning (60%), to estate planning (57%) and portfolio allocation (39%). On a related note, in the case of married women, 89% consider it somewhat or very important that the advisor meet with the couple together when investments are shared.
In cases where women don’t prefer an in-person meeting, they are more likely to opt for communication by phone than by email, as is the case when it comes to questions about their statement (52%), a specific investment (42%) and market conditions (36%). However, younger women do opt for email more often than their older counterparts.

The Women and Financial Independence Study was conducted for Schwab Advisor Services by Koski Research using online panel sources. Koski Research is not affiliated with nor employed by Charles Schwab & Co., Inc. Detailed findings can be found at www.aboutschwab.com/press/research. All data is self-reported by study participants and is not verified or validated. The study looked at 500 women between the ages of 30 and 70 years old with average investable assets of USD1.3 million. Individuals participated in the study between 25 May and 4 June, 2012.
 

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