If you are a woman, take charge of your finances today
By Michelle Burger & Daleen van Wyk, Client and Corporate Communication
A message for every woman in South Africa: Take charge of your money matters TODAY. Issues affecting women are highlighted at this time every year as we celebrate women’s month and top of the list should be personal finances, especially savings.
If you do not know where to start and maybe feel left out, take comfort in the fact that you are not alone; as this report shows. But take immediate action.
“Women around the world are more dissatisfied with the financial services industry than any other that affects their daily lives” was the main conclusion from a recent global survey done by the Boston Consulting Group. The main reason for this: women feel hugely unrecognized from what has always been a largely male-dominated industry both in terms of its service offering and its clientele. Many of the respondents in the survey, which included over 12 000 women from 21 countries, believe that their gender is a key factor in the way they were treated as well as the poor advice they have received. For financial advisors like ourselves, this is highly concerning.
In fact, not only do the modern lifestyles of women today call for a specialized approach to serving them, there is much work to be done to change the perceptions of what is no longer considered a mere niche market. The global female economy represents the largest pool of wealth on the horizon and financial advisors the world over need to take steps to create a more female-friendly approach to meeting the needs of this fast-growing global demographic.
Traditionally, most women avoided becoming involved in the financial affairs of the household because it was historically classified as the man’s arena. Although times have changed somewhat with Women’s Liberation Movements, and although many women are holding competitive jobs and earning sizable salaries, they still have the traditional “women’s work” to take care of as well—raising kids, looking after ageing parents, as well as all the domestic activities of running their households. All of which require enormous amounts of time and energy, hindering their earning potential in the workforce.
Adding insult to injury is that women are still generally earning less compared to their male counterparts and are mostly living longer than men. Women have more career interruptions as a result of having children and there is in many instances a failure to preserve their retirement benefits already accumulated, mostly in order to supplement the drop in income they receive as a result. The holes in retirement and pension savings caused by the stop-starting of careers, together with the compounding effect actually means greater loss in retirement income over time.
Another factor is the high divorce rate in the western world. Many women end up as single working mothers, sometimes with very little in maintenance support, and therefore retirement saving takes a back-seat to supporting the children.
In view of this we offer five key points to consider for your financial road map:
- If you are married have a long hard look at the combined household finances. Who pays for what and especially how much is saved and for what (education for children, holidays, retirement). If there is a single savings plan to cover everything, get separate plans (especially for your own retirement, for instance) in place.
- If you have your own accounts and savings plans even though you are married, take a long hard look at the status of the accounts and whether it serves your current and future needs.
- If you are single, making saving for a rainy day (e.g. retrenchment or dread disease) and retirement a priority.
- If you are getting divorced, approach this sad life event with a plan. Even if you receive maintenance payments for the care of children most likely the children will be in your care more often than in the care of your (ex)spouse. With a plan in place you can make sure your own personal finances are protected in addition to the care for children.
- Get your own financial advisor. Review your retirement and other savings plans, current investments, existing products like life and dread disease cover and get your own portfolio in place. Although the financial services industry may have been slow in responding to the specific needs of women, there are many companies (Brenthurst included) that have female executives and financial planners that understand the unique set of circumstances women face. Auto & General’s launch of the First for Women insurance company a decade ago is proof that the industry has woken up to the fact that women need a different approach.
There are many women who are permanent home-makers and have no income their entire lives and depend entirely on their husbands to provide for them at retirement. Such dependency can be very risky for a number of reasons: divorce, death, retrenchment or disability of the husband.
FOOD FOR THOUGHT: since marriage should not be considered a retirement plan, why does the industry not offer women something in the line of a product against these types of risks besides death, like divorce for example?
Brenthurst Wealth Management would like to wish all their clients and readers a very Happy Women’s Day on the 9th of August. In an effort to do our part in helping women achieve their financial goals whilst keeping in mind the other challenges, we will not only be offering a free consultation with any of our highly qualified financial advisers at any of our branches in Johannesburg, Pretoria, and Cape Town but should you make an investment, we will substantially reduce our advisory fees! Should you wish to take advantage of this opportunity, please contact any of our offices. Details at www.brenthurstwealth.co.za