It stands to reason that women and men who share family financial decisions have an opportunity to build on one another’s strengths and create a stronger team than if one spouse calls the shots alone.
A Greater Uncertainty
Yet investors who share decision-making paradoxically express a higher level of financial uncertainty than do those making decisions on their own, OppenheimerFunds research reveals. Asked for their views on diversifying the assets in their investment portfolios, 33 percent of women with shared decision-making responsibilities were unsure, compared with just 12 percent of women who have a primary role in making decisions. A similar disparity (32 percent-14 percent) occurred among women asked about their interest in specific types of assets, and about their preference for active versus passive investment strategies.
Such findings suggest that even when couples ostensibly commit to working together, true collaboration doesn’t happen without a concerted effort to make sure both partners take an active role in understanding the key issues.
Advisors Can Lead The Way
Financial advisors are uniquely positioned to help. Two thirds of investors surveyed in The Generations Project said they discuss their investment strategy with an advisor. At the same time, the report found that many advisors continue to focus most or all of their attention on their primary client rather than including spouses or other family members—potentially ignoring crucial perspectives.
OppenheimerFunds research suggests that women favor a balanced approach and place a higher importance on the professional qualifications of the financial advisors they work with. Men, meanwhile, may offer a greater degree of investing confidence when it comes to taking the risks necessary to achieve long-term growth.
Taking A Horizontal View
When advisors do expand their focus beyond the primary client, often it’s with an eye to helping families prepare for the expected $30 trillion wealth transfer from baby boomers to younger generations—the largest such transfer in history (Source: Accenture: The Great Wealth Transfer, 2015).
Yet the horizontal transfer of wealth to spouses deserves equal attention.