The Client – The changing form of female investors

As women move out of the kitchen and into the boardroom, they’re becoming increasingly savvy about investment. Kate Kachor asked four industry gurus if women need special treatment.

The world of finance has not always been a place women have felt comfortable.

For many women, managing money and discussing financial matters is still very much secret men's business.

But, as the old song says, the times they are a changing, and over the past few years women have become more interested in and more serious about their financial future.

It has become more common for women to visit a financial planner with or in the place of their male counterpart.

So what is it that women want from their investments? Australian based financial planners are divided.

James Doogue Securities principal, James Doogue says there is general consensus around the financial planning traps that male and female investors are different. But just how different is what needs to be determined.

Doogue says it is the job of a financial planner to always operate on the assumption that everyone's financial needs are different. In his experience, however, clients are split into two categories: single professional people and married couples.

In the single professional category, he says the difference between male and female investors is that men generally assume that their ability to continue earning a good income will continue indefinitely, females on the other hand, are much more conservative.

"Women no longer assume that they will one day meet the right man who will provide for them financially," he says.

"They are taking responsibility for the future, but they are also not assuming that they will always be able to rely on the income they currently earn. A 'roof over their head' is a primary concern and they are prepared to save a substantial deposit. They are also keen to set aside some funds for a regular investment program and are much more interested in how their super funds are invested - recognising that it will be valuable in their retirement."

Doogue says women are not as aggressive in their investment approach as men do and tend to steer away from negative gearing and speculative investments.

He says in his experience women seem to be more switched on to income protection insurance. Single professional males are inclined to feel invincible health wise and find income protection difficult to justify.

Married couples have different views on investments, according to Doogue, who says many couples shuffle back and forth in regards to investment horizons and lifestyle assets versus retirement savings.

Although Doogue says his observations are quite general, he has found the husbands in the marriage seem to be more concerned about the long-term future and funding retirement than the wives are. He says this applies whether they are 35, 55, or 70 years of age.

"In other words the men tend to be more interested in preserving their funds for the future. Whether it means saving more now, whilst they accumulate their wealth, or spending less in retirement to save more for later," he says.

"Women are the ones who generally push to upgrade the house or go on the overseas holiday. This often means that you need to set specific targets for this medium to short term expenditure as well as long term savings as a compromise."

But, although Doogue has underlined the differences between male and female investors, he is still adamant that it does not mean that a financial planner should deliver gender specific advice and service.

"What we need to do is accommodate how our clients feel, to direct the education that we provide to our clients so that they make the right decisions which are not necessarily those they would instinctively make," he says.

Another to pick up on the differences between male and female investors is Lifespan Financial Planning managing director, John Ardino.

Ardino says many male clients have more lifestyle issues in retirement such as the purchase of luxury items like a yacht, while female investors are more concerned with financial security in retirement.

"We find that men are inclined to take an active role in monitoring their portfolio's progress through their own computer systems and administration systems at home, even where we provide an alternative, whereas many of the ladies who are retired tend to be more reliant on their adviser," he says.

That said, he doesn't believe women need different investment plans.

"I think the investment needs of all retirees run the same spectrum of concerns.

There is no real need to make different plans for male and female clients," he says.

"I haven't seen enough younger female clients to see whether there are great differences but many of the younger clients do come in with their wives. I think younger females are becoming more self-reliant with investments. They are coming into marriage with one or two properties or some share portfolios. This later marriage pattern will have an influence as women will come in with different types of investments," he says.

But Ardino says that his overall perception is that women are very passive investors and that their husbands have taken on board the decision making and even administration of the financial matters.

"Where that has been the case and the husband predeceases the wife, the wife will almost certainly go to an adviser following her husband's death.

"The reason for that is that many older women are left out of the loop in regards to the investments their husbands have made. When their husbands go, the wife is left with the task of sorting out the affairs of her husband and needs advice on how to restructure her affairs."

On the other side of the coin, Accumulus financial planning principal Rosemary Osman says women as investors are looking for a relationship with a mentor or a coach to clarify their investment goals.

Osman says that over the 13 years she has practised as a planner she has found women to be less aggressive investors then some men, making them easier to please.

"They are less risk takers so they tend to choose a lot of the professionally managed diversified funds rather than individually picking funds," she says.

"Women are far more concerned about what freedom they have and the choices accumulated wealth gives them, than the men who are interested in the individual returns on businesses."

Osman has a varied range of single women clients in her 150 client base. She says her women clients include widows, divorcees and those who have never married. Only 10 per cent of her clients being single men.

"I sometimes see couples where the man would look after the money, but then he realises that he won't live forever and so he makes sure his wife starts working with the planner to take care of things when he is gone."

Osman says since 1987 there has been a major shift with female investors and dealings with money.

"When I was starting out women didn't talk about money. It was a very new area.

There was a lot of ignorance about investing, people would think they held investments with term deposits in the bank," she says.

Industry veteran Gwen Fletcher from Fletcher Green Financial Services, Gwen Fletcher has had a long affiliation with the financial planning industry, having been in practice for more than 20 years. She says women are becoming stronger investors.

While in the past they were considered too ignorant to deal with money matters, she says that today young successful business women are taking charge of their future.

"When I first started in this industry women on the whole weren't as educated in finance as they are today," she says.

"Today the 30-somethings are wanting to be independent, because of the high rate of divorce and married couples are making a concerted effort to see a financial planner as a couple, rather than leaving it up to the husband."

Fletcher says seeing a husband and wife couple together is an integral part of today's financial planning.

"I am always trying to get together with both partners as there is more divorce caused by money," she says.

"I always try to make sure both husband and wife are involved, so if then anything happens, they are both educated in what is going on."