The COVID-19 pandemic has presented unprecedented challenges across the board, but it is also emerging as a defining period for women. Capital Group’s research finds they are adapting their financial philosophies in response to their pandemic experiences and are looking to take control of their financial futures.
With many women now prioritizing financial security and resiliency, there is a unique opportunity for you to engage with them. Indeed, Capital Group’s April 2021 Wisdom of Experience investor survey of approximately 2,000 American women and 500 men found that 35% of millennial women and 25% of all women are looking to rely more on a financial professional in the future.
To make the most of the opportunity, financial professionals interested in reaching women need to understand their unique mindsets. As they relate to investors overall, women are more likely than men to:
To engage these women, you have to understand who they are, and where and how they seek advice.
Women have been most affected by the COVID-19 pandemic. Since the early phase of the pandemic, women have been more likely than men to lose or leave their jobs — and to remain out of work, many months later. As a result, women’s behaviors toward money have changed.
Our survey found that 28% of women say they reduced or stopped contributions to employer-sponsored retirement plans during the pandemic. And an equal number expect to delay their retirement. But on the positive side, 43% of women say they now place more importance than before on saving for retirement, and one-third (32%) say they are spending more time thinking about their finances.
This increased interest is especially good news for women, many of whom may have felt underprepared or not empowered to manage their financial futures.
Traditionally, women may have avoided talking about finances because they may find it too personal, uncomfortable, or because they lack confidence on the subject.
Now, as a result of the COVID-19 pandemic, many women say their attitudes toward finances are changing. That includes being more open about their financial situations and sharing their experiences, especially among networks of family and friends. More than half of women in our survey (51%) discovered that when they communicate with other women about their personal finances, they find that others are going through similar situations. This is motivating them not only to gather new knowledge but also to share it openly.
As women become more open about their finances, it’s useful to explore how and where they gather their information. Our survey found that where women turn for financial advice differed greatly depending on age, wealth, race and other factors. Some women are system connected, meaning they more often turn to financial professionals, financial advice at work and other traditional financial resources. Still other groups of women tend to be more socially connected and more likely to turn to established social networks among family and friends as well as on social media and other online or public sources of financial information.
System or socially connected: women's sources for financial advice vary greatly
White women and baby boomers tend to be more system connected, with 37% of white women and 48% of baby boomers indicating they consider financial professionals to be the most helpful source of information. The survey also shows being system connected correlates with increased financial stability. Affluent women, defined as any woman with between $500,000 and at least $2 million in assets, tend to be system connected and are likely to have a wider range of financial accounts and better access to financial professionals, employers and federal programs.
On the other hand, women of color and millennials tend to be more socially connected and seek advice online. Women in these groups seem to be in need of help, as many report feeling nervous and anxious about their finances. This presents an opportunity for financial professionals to engage with these underserved groups.
For women who seek information online, consider building out your social media presence:
This newfound openness surrounding financial topics gives financial professionals the opportunity to better engage with women. But to have a more meaningful dialogue, financial professionals should consider not just what information is communicated to women, but also how it is communicated.
To help win women clients now:
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