Turning Daughters Into Investors: Increasing Financial Confidence in Professional Women
My wife’s grandmother periodically sends me newspaper articles that catch her eye, particularly ones related to either parenting or investing. Her most recent envelope contained an article that touched on both topics: Kelly Greene’s piece in the October 11th Wall Street Journal titled, “Turning Daughters Into Investors.”
Greene notes that despite relative advances in pay, women continue to lag men in investing confidence, according to a study conducted by Wells Fargo. The study suggests that the lower investing confidence in women is directly linked to things critical to achieving financial independence, such as increased savings rates, having a financial plan, and a willingness to invest in stocks.
As both the father of a five-year old daughter and a financial planner specializing in working with professional women and their families, the article deeply resonated with me. One defining characteristic of the women in the Wells Fargo study who did feel confident about investing was the fact that someone had taught or mentored them about investing at some point in their lives.
My daughter is obviously too young to learn about investing, but we certainly talk about the importance of saving. She’s excited about putting coins into her ceramic bank, and she knows that the coins are there for “much later.” Perhaps the financial planner in me comes out too much, such as the time I almost went into cardiac arrest when my daughter informed my wife and me that when she grew up she was going to sell jewelry that she would purchase using a credit card.
Similarly, at Woodward Financial Advisors, we see ourselves more as educators and facilitators than we do as the authoritative voice on high. It’s important to us that our clients understand why we do the things we do, ranging from financial planning strategies to estate planning techniques to our investment philosophy. We partner with and coach our clients, talking with them instead of talking at them.
In her article, Greene also notes the importance of how investing is framed as a way to instill investing confidence. Traditionally, the financial services and investment industry is very male-oriented, aggressive, and focused on winning, with the “score” usually being tied to outperforming some investment benchmark.
Investing is not about keeping score; nobody “wins” at investing. Instead, investing is about creating enough financial resources to do the things that are important to you. Consequently, we encourage our clients to think about their investments as a means to an end (or as Greene puts it, “Connecting investing to what it can accomplish”) and to gauge how well they are doing by seeing if they are still on track to accomplish their goals. In the end, that’s the only benchmark that truly matters.
Lastly, Greene suggests that women should tap into the vast well of online resources for financial education. I suppose this is reasonable advice, though the Internet can turn into a pretty deep black hole. For every reasonable personal finance blog, there might be two more that are pretty far out there.
Additionally, the advice dispensed by most personal finance blogs (even the good ones) tends to be relatively general. This might be suitable for women just starting their professional careers. But most of our professional female clients tend to be very financially successful and have complicated and busy lives, requiring guidance that is more customized to their unique situations.
For that reason, the one suggestion I would make for the article would be to encourage women to seek out professional, unbiased financial advice provided by someone who isn’t compensated by selling financial products. It’s actually in this realm where women traditionally far outshine their male counterparts: they’re not nearly as afraid to pull over and ask for directions.