Broker Check

The Silent Partner’s Exposure to Unforeseen Risk

May 06, 2022

The Silent Partner’s Exposure to Unforeseen Risk: The Hidden Reality of Women Leaving the Finances to Their Male Counterparts. By Joanna Craney, ChFC®, ChSNC®

“I would rather not be involved for this part of the meeting.  Is that ok?”  “Is it ok if I take a backseat while you discuss the investments with my husband?  I am super busy.”  “I hate talking finances, that’s why I leave it to him (spouse/partner).  He’s better at it.”  

These are just some of the comments we hear from our female clients during meetings.  Not a surprise though, as “54% of millennial women defer to their male partners for long term financial planning” according to as study from UBS that started in 2018 of US Women[1].   Our communities are making strides every day for gender equality, and yet when it comes to having a seat and a voice at the table, we see women shut down and walk away.  What impact will equal pay have if our female clients don’t understand how to save or spend these dollars?   From what we have heard time and time again is that women often feel overwhelmed by the complexity of the conversation and feel that their male partners have a much better understanding of finances and investments, so why not divide and conquer the financial conversation?  Women tend to gravitate the conversation more towards making sure the family is protected – “let’s work on that estate plan honey” – and tend to the daily spending activities of paying bills and shopping for family needs. Men tend to be focused on growing assets – “now let’s talk about how we are going to save and grow these dollars” and the big picture goals such as retirement.  The truth is, while the divide and conquer strategy can fast track household chores, it can undermine a family’s long term financial success.  Think of a football team.  I will choose the Eagles since I am a Philly fan.  Go Birds!  The Eagles offense is only as good as the Eagles defense.  If the defense can not hold back the opposing team’s offense, it undermines everything the offensive line is trying to accomplish.   When partners utilize a divide and conquer strategy in their financial planning, information is lost in the lack of communication between big picture goals and day-to-day management, and one wrong move, or several tiny ones, can derail best intentions of a sound financial plan.  It’s critical when designing a path to goal achievement that all parts of the plan, big goals/small goals and action steps to get here, are clearly communicated.  Each partner must actively engage in working strategically TOGETHER if they want to be successful.

When Carolyn and I started Empowered Financial Strategies, part of our mission was to help women feel more confident in taking an active role in their financial planning.  Through our education process, our female clients feel empowered to confidently choose the best financial strategy that works for them.  One of the reasons we feel so strongly about education to women is that women tend to live longer than their male partners, which leaves them incredibly vulnerable if they have not been a part of the overall planning process. 

Let me paint a real-life picture for you.  I was introduced to a woman in her early 80s who had recently lost her husband.  All along her husband had taken an active role in making sure they had a sound retirement.  They traveled, they dined out, they enjoyed each other’s company and life was good during their golden years.  He had met with his male advisor on an annual basis to discuss their investments.  This woman was never a part of these meetings.  Maybe it was out of pure negligence on behalf of the male advisor who never questioned why she did not take part in the meetings.  Maybe it was in part because this woman did not feel that her role in the meetings would have much impact.  All she knew was that her husband “had everything under control.”  What she did not realize was the impact to her world when her husband had a stroke and died.  She knew very little about the money that she now had to manage and certainly had not a clue or where to start.  What might happen when someone is overwhelmed with grief and has never learned a lick of financial literacy?  Let me tell you.  They may either do nothing OR react negatively and move to a 100% cash position.  Not ideal.  Information overload! What do we get? Blank stares.  Head down.  Hand on head, shut eyes.  Silence.  This is reality for many women who have realized they are the last ones standing and have not a clue of what their next move should be. 

Carolyn and I are adamant about bringing both partners to the table to discuss all the moving parts of how a solid financial plan works.  We spend much time listening to learn about their wants and needs and how each one of them makes decisions.  We dedicate a significant part of our process on education so that our clients have a clear understanding of what options lie before them, allowing them to choose wisely the option that makes the most sense in their world.  We encourage to them to be in the driver seat of their plan.  And when the day comes when one of the passes, the other still is on solid footing. 

Don’t be a victim to circumstances that could have otherwise been prevented.  Take action now.  Jump in the driver seat and be in control of the roads you take, the scenery you see, the stops you make along the way and the final destination.

 

Registered Representative of, and Securities and Investment Advisory services offered through Hornor, Townsend & Kent, LLC (HTK). Registered Investment Advisor, Member FINRA/SIPC. 600 Dresher Rd., Horsham, PA 19044, USA. 800-873-7637, www.htk.com. HTK is a wholly-owned subsidiary of The Penn Mutual Life Insurance Company. 1847Financial is not affiliated with Hornor, Townsend & Kent, LLC.

 

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[1] UBS Own Your Worth 2020 Report Own Your Worth Report 2020