Is there really any difference between financial planning for women compared to men?
“Yes and No. The fundamentals of investing and financial planning are the same for both sexes; but women also face a unique set of circumstances that can significantly affect their financial profile. In general, women live longer, get paid less and spend more of their productive time on family caregiving, than men. As a result, women’s investment portfolios are typically lower than men’s, and must last longer. That’s even before you factor in potential life events, such as illness or divorce.”
So, what can women do to protect themselves financially?
“Here the answer is the same for both men and women: Start early and have a plan. The earlier you begin investing the more opportunity you have for growing your wealth. The law of compounding sees investment gains grow exponentially over time and the longer your money is invested, the better the chance you have of overcoming down markets. Equally important is having a financial plan. Understanding both your short-term and long-term goals, as well as your own personal risk tolerance, is key to developing an investment portfolio that will meet your needs throughout your life.”
What if your husband has a financial plan for both of you?
“At Family Management, we typically work with families, and many times multi-generations. If you are married and have a financial plan in place, that’s great, just be sure that you and your partner are both in agreement with your financial goals. Be involved in the decisions and know what to expect from your investments.”
What else should women be thinking about regarding their financial health?
“Debt and taxes should be included in any comprehensive financial plan, especially in a year of tax changes. Insurance needs, and policies too, should be reviewed periodically. As women often outlive their husbands, health and long-term disability insurance can be crucial to ensuring care and security later in life. Wills are another item that should be updated from time to time, and sometimes get overlooked.”
As a woman in this business for 30 years, what is your best advice for women who are just starting to focus on their finances?
“It’s never too early, and it’s never too late to start. It may still not be a level playing field in the workplace, but women do have equal access to investment education and advice. In my experience, women who take the time to focus on their financial well-being end up being very good at it.”
Andrea Tessler is a co-founder of the Family Management group of companies comprising an investment advisory firm, a broker dealer and an insurance agency. Andrea serves on the Cornell University Council and sits on the Board of Trustees for an independent private school.
Family Management is a New York-based registered investment advisor serving high net worth individuals, families and non-profit organizations. With more than $1.7 billion of assets under management, we provide attentive professional service and expert advice across all areas of financial planning.