The involvement of women in managing family finances has come of age. Traditionally, because of the societal set-up, women were more focussed on managing daily expenses including the purchase of vegetables and groceries whereas the rest of the financial decisions including investment decisions were taken by the spouse.
This is changing. The participation of more and more women in the workforce means more contribution to the family income and hence more involvement in the financial decisions. In a single income family, where the husband is busy with his office work, the wives are complementing their spouse by taking an active interest in learning about investment options and managing money effectively. Then there are young women fresh out of college in their first job, who want to use a smart investment approach to become financially independent early in their life.
Over the years, more and more investment options have been made available to investors and it has become easy to invest remotely with the click of a button. The oversight from regulatory bodies like SEBI has ensured the safety and protection of retail investors. There is a focused effort to increase awareness and education around financial planning and investment. This has encouraged better participation from women.
I would like to touch on examples of three of my women clients at different stages of their life cycle and are well placed to achieve their financial goals.
Planning for golden years
My first example is of a lady client whose husband was about to retire and she felt the need to take formal advice to ensure that their hard earned money sustains through their retirement ages. She was referred to me by her friend. Before reaching me, she had already reached out to a few other Financial Advisors to understand their offering and engagement model.
I found her very clear in articulating her expectation in simple terms and she patiently listened to me when I narrated my financial solution and the engagement model. Once she realized that I could be the one with whom she can work, she also involved her spouse in the discussion. Our discussion was very cordial and reassuring which resulted in her becoming my client.
At her age, her focus was to get a trustworthy advisor who can manage their money as though it was his/her own money. She wanted somebody who could appreciate her risk profile and design a portfolio that is conservative and gives her peace of mind. She was willing to reduce expenses if needed but running out of money at a later age was not an option for her.
While her knowledge of financial planning and investment options were limited, her approach to selecting and engaging a Financial Advisor was admirable. Based on my experience with her, I am comfortable that she is going to have a secured retirement life.
Building the nest
The second example is of a woman client in her thirties with a family comprising of husband and a child. She had started exploring Fee-Only Financial Planning & Advisory based on the input from social media. She felt the need to start planning for her high-value financial goals such as home purchase, kid’s higher education and her retirement plan. Not acting now would jeopardize her financial future.
While she had started investing in multiple asset classes, those investments were largely ad-hoc and not aligned to any financial goal. Also, the investments were done based on recommendations from friends, colleagues and hearsay. She was not sure whether they were the right investments for her.
My initial interaction with her was engrossing. She wanted to know about goal-based financial planning and how it was helpful to other clients. What differentiates my services? What are the unique expectations of women clients and how they are addressed?
I found her committed to the engagement. She tried to understand the reasoning behind each of the financial recommendations. But once she became comfortable with the plan, she religiously implemented each of those actions items. She regularly reached out to me to validate the recommendations from some of her financial influencers.
She was systematic and persistent and knew how to use the financial ecosystem to achieve her financial goals.
The go-getter
The third and final example is of a young woman client who was just out of her college in her first job. She wanted to get her money working from day one. She had aspirations to become financially independent at an early age and enjoy the rest of her life going places.
She used social media to do an initial search and zero in on SEBI Registered Investment Advisor for financial help. Before reaching out to me, she had browsed through my web presence and pretty much knew everything about me. Our first conversation was a mere formality as she had already made up her mind that she would go ahead with the engagement.
Since she was starting fresh, her slate was clean which means I did not have to worry about any prior financial decisions which would have required review. Based on the data shared, she wanted to know whether she could become financially independent by the age of forty. She wanted to cover risks and design a tax-efficient smart portfolio that could leverage all assets classes including Equity.
She was sharp, focused and decisive. She did not take much time to commit to the engagement. A large part of her action items was implemented in the first four weeks of publishing the financial plan.
Family for tomorrow
More and more women are getting involved in the financial planning and investment decisions of the family and that is a good sign. There are families where women are primary earning members and are responsible for all financial decisions within the family. Non-working spouses are also taking financial decisions when their better halves are occupied with work, avoiding delays in the decision-making process. In case of the demise of the husband, women are better prepared to steer the family finances. Overall, women’s involvement in the family finances is making the family stronger and more resilient.
If you need help in choosing a Financial Advisor, you may want to go through the article How to Select the Best Financial Advisor in India.
The writer is a SEBI Registered Adviser and Founder of FinMyn (https://finmyn.com). He provides Fee-Only Financial Planning and Investment Advisory services.
He has advised many clients in India, the US, Europe, the Middle East, South East Asia and Australia.
To know more about him, click on https://finmyn.com/about/.