When it comes to financial planning women are lacking in five key areas and they are holding them back from a future of financial security and stability.
In an interview with Yahoo Finance’s On The Move, Holly Newman Kroft, managing director at Neuberger Berman, identified five “red flags” and how women can tackle them.
Lack of time
Regarding lack of time, Newman Kroft said many women have dual roles: working outside the house and being the primary head of household. As a result, financial planning falls by the wayside due to limited time. “So how do you find the time to take on this additional, what some would view... burden or a chore. We try to get them [women] to think of it as self care, by taking responsibility for their well-being.” Altering the framing from ‘chore’ to ‘self care’ can help women prioritize financial management explained Newman Kroft.
Lack of confidence
Women lack confidence and often concede budget management and wealth planning to male partners who they view as the “breadwinners,” deferring to traditional gender roles, according to Newman Kroft. “They [women] don't believe in themselves,” she said.
Lack of urgency
Another harmful mindset that blocks women from establishing financial competency is complacency in financial matters or lack of urgency, said Newman Kroft, adding that women are often left unprepared and financially vulnerable when faced with divorce or the unexpected death of a spouse.
“I think it's really important for women to recognize that statistically speaking, at some point in their lives, they're going to be responsible for their financial well-being. It's really easy to sit back and let your husband, your partner, or your father, whomever, take control of your finances. But women outlive men statistically. We all know that. Divorce rates are 50%. We all know that. What a lot of people don't realize is that divorce rates among the 50-plus year old couples are rising. And so that all bodes for women sometime in their life will have to take control.”
‘Perceived lack of knowledge’
To overcome impediments like “perceived lack of knowledge” Newman Kroft offers an easy fix: educate yourself by asking questions. “Start talking to your friends, male or female. Talk to people who have similar philosophies, outlooks, risk tolerances. Maybe the person who you go to the gym with or go shopping with isn't the person who you want to ask for a financial advisor. But it might be someone who has similar values and sensibilities to you.”
Lack of trusted financial partner
And finally, Newman Kroft stresses that women should engage and retain trusted financial advisors, but they should never feel insecure or pressured to be fully prepared and well educated on the matter of wealth planning. “You don't have to have the answers before you go to the meeting, You're there to learn, and you're the client,” she said.
Yvette Killian is a producer for Yahoo Finance’s On The Move.