Women Take Financial Charge

Barbara still preaches the power of words.

“You never know when one sentence will change your life,” she said. “Mine was: ‘I don’t think I want to be married any more.'”

Within striking distance of having her short-term life goals attained – career, marriage, home, a baby due – Still was caught off guard by her then-husband.

“My life got turned upside down,” she said.

In a strange way, Still was lucky. She happened to be employed by Arvest Asset Management, so she had the financial savvy to weather the economic storm that was her divorce.

In the months that followed and in her work as a certified financial planner and vice president with AAM, Still realized how many women aren’t armed with a full knowledge of their family’s big-picture finances. Be it divorce, death or long-term hospitalization of spouse or other family member, Still wants all of her clients, but women in particular, to be prepared for that life-changing sentence.

“I can’t tell you how many wives of professionals that come in here – they don’t have a clue,” Still said. “They sit in that chair over there, and they’re just looking at their fingernails, checking their phones. They’re just here to be supportive of the husband. They need to know enough that if something happened … where would they start the next day?”

According to a recent report conducted by the business strategy adviser Boston Consulting Group, women control about 33 percent of the wealth in the U.S., some $9 trillion. BCG said that number should increase by 8 percent per year globally through 2014.

The BCG report urges financial planners and private bankers to ready themselves to work more with women and points out several gripes high-net-worth women typically have with their managers.

The bottom line is, financial advice is largely the same for men and women, but women typically live longer, make different spending choices and are more likely to have inherited a large chunk of their wealth.

Still doesn’t specialize in a women-centric niche, and as far as she knows, no wealth manager in Northwest Arkansas does. AAM, which has offices in Arkansas, Oklahoma, Missouri and Kansas, has about $6 billion in assets under management.

Ellen Compton, 72, recently retired from the University of Arkansas. She said her divorce ultimately sent her in search of a financial adviser. She interviewed several prospects before coming across Still.

“My advice would be to find someone you really trust and let them get you a good plan that shows how you can go forward, how you can have the right balance in your portfolio, and where your money to live on is going to come from after you retire, and let them handle it,” Compton said.

Gender Bender

Still said what’s important to him isn’t always as important to her.

“Women are going to be worried about how they will be able to take care of the kids, put them through college, and what they will leave them,” she said. “It’s very traditional that we see women be worried about family, and men worried about long-term planning.”

“Generally women live longer than men and inherit whatever their husbands leave them,” said Mary Ann Greenwood, president and founder of what is now known as Greenwood Gearhart Inc. “Because investment does not have a gender, I would hope women would consider investment as important as men.”

Greenwood said the perception used to be that the husband took care of the big picture, long-term finances, but with the influx of women into the labor force in recent decades, that is changing.

Still believes single women don’t put enough emphasis on retirement planning, that females don’t assert themselves nearly enough, and that women in general are kind to a fault – the fault being they often save and spend for their families at their own expense.

Betsy Etges, vice president and financial adviser with Morgan Stanley Smith Barney in Fayetteville agreed women need to take an active role sooner rather than later.

“These days, I think the younger wives are generally more aware of financial matters; however, older, Baby Boomers and their moms’ generation, more likely have deferred to their husbands for financial management,” Etges wrote in an e-mail. “Since many women live longer than their husbands, many widows have had to learn how to manage money out of necessity.”

Still said, “You can borrow for college, kids can borrow for college, but you cannot borrow for retirement. You have to make sure you’re taking care of yourself.”

Looking Ahead

Women pondering retirement ought to consider inflation, which “is going to be double the price of goods every 20-25 years,” said Kerry Bradley, president of Garrison Asset Management in Fayetteville.

“If you have, say, a $1 million portfolio, the goal should be to not draw any more than 5 percent per year,” she said.

And women need to be aggressive while they’re young, Bradley said.

“This is a good time for a young- and middle-aged woman to be getting into the market,” she said. “But be careful. Don’t chase the latest fad.”

Still hits on the central points repeatedly. People are living longer, so begin saving earlier. Ask questions. Have an interest in the details.

“That’s part of what I try to do, is educate people, women in particular,” she said, “because they seem to be less educated about what investing really means and time frames and risk amounts.”

Still said women tend to prefer safe, conservative investments.

Greenwood had more sound advice.

“I think it’s very important for women to be sure and maximize their retirement opportunities through their employer,” she said. “Regular savings is an important habit to form for young people.”

She noted the importance of women establishing good savings habits in their 20s, of single women taking responsibility for their earnings, and the trust to be established in the magic of compound interest, which depends on time to work its magic on investments established early on. And early retirement is not going to be the norm – which means still more money ought to be stored away.

Inside her downtown Fayetteville office, Bradley gets the feeling not enough women -particularly the younger generation-are financially involved these days. She points to studies that women actually make better investors than men.

Bradley, who believes wealth management is a “relationship business,” reminds that everyone’s financial situation varies. That said, both genders would be wise to go beyond the traditional expectations of 401(k)s and IRAs.

“Don’t expect to spend much less retired than what you’re already spending,” she said.

“The biggest thing I’ve found is if people understand what they’re trying to accomplish, if they have a plan, they can do it,” Still said. “It’s when you don’t have a formalized plan that it’s hard, because you’re just guessing.”