/// By Ashley Agnew & Aviva Sapers
With women living an average of five years longer than their male counterparts, and increasingly making more of the household financial decisions, the landscape of wealth management is shifting away from the historically male-dominated playing field. Despite this increase in financial responsibilities, women tend to have lower self-confidence and risk tolerance when it comes to financial and investment decisions. Luckily, a desire for good advice and a greater focus on long-term goals are also typical of women in charge of family financial needs.
Because of this, many wealth advisors will strategize about how to better connect with money—but if you are a woman who is, or is aspiring to be, in a position of confident financial control, we think it is a good idea to take the initiative to familiarize yourself with some important questions that can help maximize the value you get out of your advisory relationships:
- Do you understand the financial terms involved and the general layout of your family’s financial holdings?
- Conversations with a good advisor on concepts like asset allocation, investment risk, diversification, distribution requirements, etc., are extremely valuable. While an advisor can and should walk you through these items unprompted, a read-through of financial statements and some quick Google searches on unfamiliar terms can be empowering and help pinpoint what questions to ask to get you started on the right foot during meetings.
- Are you aware of the risk level being applied to your investments?
- As stated above, men tend to approach finances with a higher risk tolerance and greater predilection for “gambling” on the chance for greater returns. Are you comfortable with the current level of risk and how it may impact your investment portfolio? How might you adjust risk levels to better match your goals as well?
- It is important to express your own perspective during meetings with your advisory team. If this is uncomfortable, perhaps requesting a one-on-one meeting with your lead advisor, or asking for an investor education session, would be advantageous to gain a better understanding of the role varying assets play in your total risk picture.
- Do you understand the insurance coverage you have and does your family have enough to address unforeseen situations?
- Whether it’s life insurance, long-term care insurance, disability, or a tailored property & casualty plan, being a part of the conversation will allow you to voice an opinion and ensure the level of protection that will help you sleep better at night. Insurance is an important part of planning, though it takes many shapes, which can be intimating even for the most sophisticated investor. Again, asking questions and asserting that your voice matters will be key to proper financial planning.
- What does “Taken Care Of” actually mean?
- All too often, concerned spouses and adult children hear the answer, “don’t worry, you will be taken care of,” when they finally muster the courage to ask the family CFO about specific elements of insurance, estate, and financial planning. This innocuous answer is dangerous when it does not consider the personal wants and needs of each member of a couple or inheritance group. When push comes to shove, i.e. when the application of being “taken care of” comes into play, it may not be what you need or expect.
- How much is financially enough, and will it last as long as you do? Who in your life has respectfully asked you this question directly? Clarifying the ambiguity surrounding the finances meant to support you is necessary to prepare appropriately for the future you deserve and desire.
If there is one constant, it’s that life doesn’t always go as planned. The potential for unforeseen disruption to your standard of living, whether from illness, divorce, or a death in the family, increases as we get older. For women who live longer and tend to suffer more than men economically after such upheavals, it can be imperative to get involved in family finances now and to work with an advisor to set your own financial goals and make a plan to reach them. To earn a seat at your table, good advisors should always be willing to put in the time to help educate you on your options.
To get the most out of that relationship, and more importantly—the most out of your relationship with your money—understanding the terms and timing of your financial life, setting goals and expectations, and gaining a sense of what questions to ask to get there can prepare you for whatever life changes are ahead.
When you are ready to start the conversation with an advisor, we are here to offer our many years of professional and personal experience for a holistic approach to women’s’ financial wellness toward empowering your control of your financial life.
Tax and legal advice is not offered by Lion Street Financial, LLC.