A niche market untapped

Women are different to men in so many ways. That’s why they should be looking after their finances differently, too. Proactive advisors can carve a real niche for themselves by helping their female clients to take responsibility for their own financial in

Thanks to dramatic advances in medicine, half of all American women born today will live to 100. In the UK, it is estimated that one fifth of the 10 million Britons alive today, will live to 100. As a developing country, South African figures may not be as high, but if they are educated and lead a healthy life, our daughters have a strong chance of living to that age too.

Living longer, retiring earlier

Women are likely to need a bigger nest egg than men because their length of retirement is probably going to be longer due to earlier retirement and longer life expectancy. “Women need to consider different issues when it comes to financial management and saving their money,” says Michelle Human, Legal Marketing Specialist at Liberty. “As well as having to provide for a longer retirement, women generally still earn less than men and tend to not be employed over their full working lifetime. This means they may have lower contributions to their retirement fund over the years. They need to be saving more towards their 60+ years.”

Widowhood at 55

Another interesting statistic is that the average age of widowhood is as young as 55. “Whether you have been financially dependent on your spouse or a joint breadwinner, widowhood brings with it many difficult financial decisions. This is not the time to be worrying about your financial future. The only way to avoid this is to have invested wisely and consistently,” adds Human.

The role of an advisor

So how can advisors assist their female clients to prepare and save appropriately?

“As much as most female clients would want to rely on their spouses, advisors should strongly advise and encourage them to have separate plans and policies. It makes sense given individual tax allowances to incentivise savings,” comments Human.

“The good news is that international studies have shown that women tend to get higher investment returns than men because men tend to chop and change their policies and investment portfolios while women stick with the default. Women tend to be more consistent and are patient about following a long-term approach to investing, riding out the ups and downs of the market, rather than jumping in and out of short-term investment ideas, which makes an advisor’s job much easier.”

Competitive advantage

It’s time to knock the stereotypes on the head: women know what they want and they certainly know how to go out and get it. They are more likely to seek financial advice from a professional, who can offer sound advice in terms of investing and managing their money and ensure they remain invested.

“Proactive advisors can add value by helping their female clients, whether married or not, to understand what their future needs may be and to start preparing now,” says Human. “Such advisors will also help women tap into the many advantages available to them, for example, lower insurance costs and the tax incentives to help them make the most of their retirement funds.”