Although as a society, we have taken great strides towards gender equality, women still face financial challenges that often leave them at a disadvantage.
According to Momentum Senior Legal Adviser Sharon Hamman, “From the persistent gender pay gap to ‘pink tax’ that is irrefutable at this point, we need to identify and target the issues that contribute to a widening financial gap. Financial advisers have the opportunity to make a profound difference in this quest for true financial equality.” (Pink tax is a term used to refer to the fact that goods and services aimed at females are exponentially more expensive than similar goods and services offered to men.)
When consulting with a female client, the following five factors should be applied by a financial adviser in the attempt to contribute towards bridging that gender gap:
1. Understand the unique financial challenges women face
Comparatively, women typically earn less over their lifetimes due to the gender pay gap, which is unfortunately still a reality in many professions and occupations, career interruptions for caregiving, whether it is to raise a family or care for elders, and working in lower-paying sectors, which is often by default and not design,- says Sharon.
This has a knock-on effect that will have a direct impact on their future financial wellness, as it results in lower retirement savings, less disposable income to acquire risk benefits and to invest. As a financial adviser, it is crucial to recognise these systemic issues and tailor advice accordingly.
“By acknowledging the realities your female clients face, you can create strategies that may compensate for these financial setbacks and help them build a secure future.”
2. Offer personalised solutions that reflect your client’s goals
No two clients are the same, and this is equally true for women navigating their way to financial wellness.
“Whether it is planning for retirement, saving for a child’s education, making provisions for family members in the event of death or disability, or managing the financial impact of divorce or bereavement, each client’s needs are unique,” says Sharon. “It is important to consider each client’s challenges and needs, to design a financial plan that aligns with their personal goals and life circumstances.”
3. Build trust through empathy and communication
Financial advice is all about building relationships – the relationship between a financial adviser and a client is similarly personal; it can be compared to a doctor-patient or attorney-client relationship. It is an extremely personal relationship and requires time and energy to exist and grow stronger.
“Women prefer advisers who communicate with empathy and without condescension”, says Sharon. In her opinion, women are often more guarded, seeking more than one opinion and unfortunately, sometimes being overwhelmed by the magnitude of the decisions that need to be made – resulting in procrastination.
Fostering a relationship based on trust and understanding and being willing to take the time and effort to earn that trust will create a safe space for your clients to discuss their financial concerns openly and to take action. This approach is particularly effective when dealing with sensitive issues such as financial independence, impending divorce or the loss of a loved one, where empathy is key to success.
4. Encourage a holistic approach to financial planning
Financial planning goes beyond assets and net worth. It requires that you understand your client’s broader life aspirations, her dreams, fears and ideals. The financial plan should acknowledge what’s important to her and provide a clear path to financial enablement. Women, in particular, often value a holistic approach that considers their overall wellbeing.
As an adviser, embracing this comprehensive view can help you connect with your clients on a deeper level and provide advice that truly resonates with their life plans – says Sharon.
5. Empower women to take charge of their financial future
Sharon maintains that one of the biggest challenges many women face is self-doubt when it comes to financial decision-making.
“Women may be more cautious and hesitate to take risks or pursue opportunities unless they feel fully qualified,” she says. “As a financial adviser, you play a critical role in boosting their confidence. Encourage your clients to recognise their capabilities and take ownership of their financial journey.”
By empowering women to take charge of their financial lives, you can help them design their success and own it.
“The role of a financial adviser is evolving, and the need for advisers who can bridge the gender gap has never been greater. By understanding the unique challenges women face, offering personalised solutions, and building relationships based on trust and empathy, you can help your female clients design their financial future with confidence and clarity,” Sharon concludes.
