Meet Melissa. Melissa is happily single, has built her career over many years, owns her own home and is generally able to afford what she needs. Melissa is concerned about saving the right amount to provide for a comfortable retirement, travel, home improvements and the possibility of living to age 100. Melissa is an example of an executive woman.
Executive women are a rapidly growing segment of the population and, like anyone, can use guidance on how to properly invest for their futures. But if you are in this category, you may have different expectations of your financial advisor than men do, as you may have different priorities for your hard earned money. Here are just a few expectations that you, as an executive woman, may want to discuss with your financial advisor.
As women climb the corporate ladder, their sources of income may grow beyond salary and benefits. Saving in a 401(k) may not provide for their retirement lifestyle on its own. Corporations offer executive benefits, such as deferred compensation, restricted stock, stock options and ownership plans to supplement the traditional retirement plans. These opportunities can be daunting in that they are sometimes more complex to understand and often have tax implications. A good advisor can explain how the benefit works and the pros cons and deadlines involved.
It’s a fact that women, on average, will outlive men. This means that women may also spend many years living single. Women are often caretakers, but who will take care of them when the need arises? Developing a comprehensive financial and life plan will help relieve some of the stress of not knowing how much they will need to support themselves in retirement. Looking at long term care options is also important. But most important is knowing how long they will need to work and save. This is critical in the retirement planning process. Some women may even get a pleasant surprise! With financial planning, having action items and timelines will help ease the fear of the unknown.
Most executive women want to be actively involved in the financial decision making process. Understanding the pros and cons before choosing the best option can be both educational and empowering. Executive women might also want advisors who can help them make pivotal career decisions. Women executives are more likely to change careers early on, some to focus on family, some to focus on passion projects, some to climb the corporate ladder even higher. Again, presenting the pros and cons of career switches can help executive women weigh their options and the possible impact on their financial futures.
Women appreciate the ability to bounce things off of someone who will listen objectively and provide an experienced opinion. Often, single women feel they can’t impose on family and friends to help them through important decisions. “Should I keep the car or trade it in for a new one? When does it make sense to refinance the mortgage? Am I saving enough in my investment and retirement plans? Are the investments proper for me?” Other issues also arise, like, “Mom needs to go into assisted living. How do I manage that? Does she have the right paperwork for me to take over her finances?” An advisor can be a good sounding board to help women “think out loud” and be reminded of important milestones, as well as provide referrals for other important needs.
Most women who are widowed change financial advisors after their husbands die. Many are looking for advisors who care about their current stage of life and their whole life picture. The key to helping women invest wisely is for financial advisors to understand as much what they want as what they don’t want.
Like many people, executive women need financial advisors who will stick with them for the long haul, through early career changes, periods of caring for children and parents, changes in marital status – they need someone trustworthy to be there for anything that comes their way.
Sometimes the best person to advise an executive woman is another woman. Women advisors often are empathetic and truly understand their clients’ perspectives. After all, they occupy the same space in society and can fully understand what it means to be a woman in corporate America. They may have had similar experiences that can provide common ground.
If you are an executive woman, think about your specific needs before choosing a financial advisor. Make sure your advisor is in tune with your vision of wealth management and can offer informed guidance to help maximize your earnings and savings. That’s what Melissa did, and she is now semi-retired and working part-time on her own terms.
Don’t settle for just any advisor. Work with someone who works for you.
Wood Smith Advisors, a Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here.
“Finance Made Simple” blog posts are intended for educational purposes and not for specific advice. Each person’s situation is different. Consult your financial advisor for advice relating to topics discussed.