According to latest statistics on the gender pay gap in the UK, women in full-time employment earn 8.9% less on average than men. Amongst all employees, the gender pay gap is 17.3%.
Women are also probably not going to work as long. A 2018 study by the European Union found that the expected duration of a male's working life in the UK is 41.5 years, while for a female it is 36.8 years.
There may be a number of reasons for this, but primarily it is because women are more likely to be caregivers, which means taking take time away from work to look after children, ailing relatives or ageing parents.
Women are also far more likely to work part-time jobs than men. Around 42% of women in the UK work part-time, while only 15% of men have part-time employment.
What all of this adds up to is that, over the course of a working career, women are likely to earn significantly less than men. If they are saving at the same rate, they are therefore going to have less money put away for retirement.
Compounding this is that women can also expect to live longer. The life expectancy for women in the UK is now 83.2 years, while for men it is 79.6. That means that the average woman has to fund a longer retirement, with less capital.
For financial advisers, these are meaningful considerations that really go to the heart of the financial planning process.
However, it's also important to consider that all of the statistics quoted above are averages. And financial advisers shouldn't deal with averages. They should deal with the individual in front of them.
No client, whether male or female, is a statistic. They are an individual with particular ambitions, goals and needs.
The challenge for advisers is being aware that women do have particular planning needs, but that they don't want to be patronised. They also don't want the normal package 'wrapped in a pink bow'.
One of the most talked-about books of 2019 was Invisible Women by Caroline Criado Perez. Using data from a range of areas, it provided a startling look into how the world has been designed for men, and how gender differences are often not considered.
For example, most personal protective equipment (PPE), used in everything from construction work to policing, is designed based on sizes and characteristics of men in the US and Europe. A 2017 study by TUC in the UK found that only 5% of women in the emergency services don't feel that their PPE – which includes body armour and stab vests – hampers their work.
Financial advisers should think about this too. Oliver Wyman's Women in Financial Services 2020 report suggests that:
“Women are the single largest under-served group of customers in financial services. Evidence shows that approaches that may appear to be gender-neutral in fact default toward men's needs and preferences.”
The right approach
Correcting this is not just about being gender sensitive. It is a massive business opportunity. The Oliver Wyman study estimates that the industry is missing out on $700 billion in revenue a year by not serving women better.
The place for advisers to start, is listening. Studies suggest that what women value most in an adviser is someone who is not going to give them generic solutions. They want someone who will really engage with them about their individual circumstances and financial requirements.
The successful entrepreneur is going to require something quite different to someone with inherited wealth.
To truly appreciate these differences, advisers need to be willing to establish a relationship that is beyond just the transactional. Women value advisers who they feel comfortable talking to, and who appreciate how vulnerable they might feel speaking about money.
Finally, women tend to have different expectations of what an adviser will do for them. Largely, their concern is not about the return they are getting, but whether their money will serve a purpose – will they be able to pay for their children's tertiary education, can they travel, will they be able to retire when they want to?
The successful adviser is therefore someone who partners with them to help them to reach these goals. And that starts with taking the time to understand them and their particular needs.
Picture: Christina @ wocintechchat.com (via Unsplash)