Female representation in the financial services industry is lacking and many women feel unheard or misunderstood by their financial professionals. Those dynamics risk a lifetime of financial catch-up for women who are already statistically more likely to make less money than men over their careers.
Case in point, the recent Alliance for Lifetime Income Cannex Protected Retirement Income and Planning Study, which showed that over half of women ages 61 to 65 (54%) have less than $100,000 in assets. Related, over half of 65-year-old women (53%) do not think that that their retirement savings will last their lifetime, compared to just over a third of men of the same age (36%)1.
Financial professionals have an opportunity to step in and make a change by first understanding the realities for many women today, and then by providing real advice, services and products that will help address their challenges while providing a path forward toward retirement. Especially important is focusing on getting women more involved in the industry. The fact is, female clients are simply more likely to feel understood by a female financial professional, and the industry subsequently needs to do a better job shifting what has long been a primarily male dominated industry. Representation plays a key role in the decisions that women make in tandem with their financial professional. Having a female financial professional may be the solution that many women need in order to feel confident in their financial planning process.
Women are also expected to live longer yet have less support along the way to building their retirement savings. For example, almost 6 in 10 of 65-year-old women who work with a financial advisor say (59%) that their financial professional doesn’t discuss annuities options with them, despite nearly half (48%) being extremely interested in owning the product2.
Since women are living longer, they need to be invested for a longer period of time. As such, products like registered index linked annuities (RILAs) can help weather market volatility through the years, like we have seen over the last few volatile periods. Unlike savings accounts, bonds or other conservative investment vehicles, these products offer savers an avenue to participate in market growth up to a cap corresponding to their loss limit. With tailored investment products, clients decide the level of risk they’re willing to take, providing a customized and approachable way to help save for retirement and build a stream of income later in life.
Women are also more likely to be the primary caregiver for family members in need. That dynamic often keeps them out of the workforce for extended periods of time and subsequently hampers opportunities for financial career gains. When coupled with a lower average salary, the ability to achieve an attainable and sustainable retirement slips even further away.
What do we in the financial industry do with this information? Conventional wisdom tells us that the best way to combat a lower salary is by diligent investing from a young age. However, that’s a near impossible ask with several conflicting financial and time priorities on the shoulders of women every day. According to a recent report by the U.S. Department of Labor’s Women’s Bureau, on average, caregiving lowers a mother’s lifetime earnings by 15% and in turn creates a reduction in their retirement income3.
We also need to do more to help women start investing earlier in the face of practical challenges. That includes introducing new products like annuities that may respond to their proven interest in guaranteed options and providing more education on the potential long-term damages of overly delayed or conservative investing.
Over the past decade women have become increasingly involved in their financial planning, however, recent data from the U.S. Bureau of Labor Statistics still shows that less than a third (32.6%) of financial advisors are women4 – a staggeringly low number. All our clients need a strong financial professional who understands them and their individual needs. Increasingly, that means women. Let’s answer the call and do better as an industry.
References
1. Cannex, ALI Cannex Protected Retirement Income and Planning Study, 2023
2. Cannex, ALI Cannex Protected Retirement Income and Planning Study, 2023
3. U.S. Department of Labor, READOUT: US DEPARTMENT OF LABOR REPORT FINDS IMPACT OF CAREGIVING ON MOTHER’S WAGES REDUCES LIFETIME EARNINGS BY 15 PERCENT, 2023
4. U.S. Bureau of Labor Statistics, Labor Force Statistics from the Current Population Survey, 2023
The views expressed here are those of the author and do not necessarily represent the views of TruStage.
TruStageTM Annuities are issued by CMFG Life Insurance Company (CMFG Life) and MEMBERS Life Insurance Company (MEMBERS Life) and distributed by its affiliate, CUNA Brokerage Services, Inc., member FINRA/SIPC, a registered broker/dealer, 2000 Heritage Way, Waverly, IA, 50677. Investment and insurance products are not federally insured, may involve investment risk, may lose value and are not obligations of or guaranteed by any depository or lending institution. All contracts and forms may vary by state and may not be available in all states or through all broker/dealers.
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