Advisors should approach widows and female divorcees differently from each other and differently from male investors, says a new study by the research firm Spectrem Group.
Women in Transition: Widows and Divorcees reveals the two groups of women have differing attitudes about how to plan their financial futures and advisors who want to gain or retain these women as clients should know the difference, Spectrem says. The study was made of divorcees and widows who are high net worth or ultra high net worth with $1 to $25 million in net worth.
Among widows, 31% graded themselves as conservative investors, compared with 17% of divorcees and 15% of men. At the other end of the spectrum, 22% of men consider themselves aggressive investors compared with 14% of divorcees and only 6% of widows.
Along the same lines, 45% of divorcees say it is more important to protect principal than to grow assets, while 58% of widows feel asset protection is more important.
Men are more confident that they are knowledgeable about investing (30%) than either groups of women, but divorcees outrank widows in confidence 14% to 9%. The vast majority of all groups feel they are fairly knowledgeable but still have a great deal to learn.
Interestingly, more widows (52%) than divorcees (47%) say they want to be involved with the day-to-day decisions of investing. The study says widows who may be older and might more time devote to it, the study says.
Most (62%) of the divorcees say they are financially better off because of their divorce and most (64%) widows say their spouse made good preparations for them before they died. Both groups rely on financial advisors for assistance.
Half of the widows in the survey rely completely or partially on investment professionals or advisors to help them, while 45% of divorcees do so. This compares to only 37% of men who describe themselves as advisor dependent or advisor assisted.
The most common source of advice by far for all three categories is a full-service broker, with independent financial planners or investment managers coming in next.
Divorcees and widows differ in their expectations of social media as it affects their financial planning. For divorcees, 62% want their account balances in one place and 59% want their financial statements online rather than on paper. For widows the percentages drop to 44% who want account balances consolidated and only 33% want their reports online.
The use of social media for gathering financial information is growing slowly among these women, but Spectrem advised "financial advisors need to actively pursue communication via these channels because ... their expectations will be growing."
Through the interviews that were conducted in conjunction with the survey, Spectrem says, it concluded "divorcees are skeptical and require additional care [for advisors] to gain their trust. It may take a significant amount of time to gain the trust of a divorcee."
At the same time, even though most of the widows say they feel their spouses left them properly cared for, advisors should have discussions with them about their monthly income needs and related concerns, Spectrem says.
-Karen DeMasters