MASTERCLASS: Female Investors: Still a Missed Opportunity

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  • 01 hr 04 mins 48 secs
 If female investors control an estimated $22 trillion in investable assets and nearly 60% of the wealth in the U.S., then why does this important and fast-growing segment of investors still feel largely misunderstood by the financial services industry? During this masterclass, we will discuss best practices for communicating with and serving female investors throughout their various life milestones. We will dive into three topics that could affect their retirement: grey divorce, caregiving, and widowhood. The goal is to continue the conversation on the importance of working with women as clients and how to address their unique circumstances, especially as they approach retirement.

  • Ann Hughes, Founder and President of the Female Affect  
  • Candice Tse, Managing Director and US Head of Market Strategy with Goldman Sachs Asset Management
  • Pui Kalyanamitra, Regional Vice President at  Transamerica

Channel

Transamerica

Suzanne Siracuse: Hello, I'm Suzanne Siracuse and welcome to today's webinar, female investors still a missed opportunity. Female investors control an estimated 22 trillion in investable assets and nearly 60% of the wealth in the US. Then, why does this important and fast-growing segment of investors still feel largely misunderstood by the financial services industry?

And how can financial advisors help change this. Our panel of experts will supply best practices for communicating with and serving female investors throughout their various life milestones. They will also provide important insights on how COVID-19 has disproportionately affected women and their finances, and how that could negatively affect the retirement overall. And now, I would love to introduce our esteemed panel.

First up, Candice Tse, Managing Director and US Head of Market Strategy with Goldman Sachs Asset Management. In her role, Candice focuses on macro-economic and capital market research, publishing weekly, monthly and quarterly on topics ranging from GDP and inflation to all asset classes, including equities, fixed income, currencies and commodities. She also developed Goldman's empower the female investor framework to help women gain financial confidence.

Next up, is Ann Hughes. Ann is the founder and the president of The Female Affect. Founded in 2011, The Female Affect is a consulting and public speaking firm, working with financial service organizations and professionals to expand their business by better meeting the needs and expectations of female clients and consumers.

In addition, The Female Affect works with female professionals in all industries to help them grow and advance in their careers presenting on topics relevant to women winning in their careers by leveraging their strengths.

And Pui Kalyanamitra, a vice president at Transamerica, Pui has worked in the financial services industry for over 20 years, helping financial advisors evaluate and design portfolios throughout constantly changing market conditions. She also helps educate investors on saving, investing and protecting their assets. So, over the next decade, a historical wealth transfer is in store for the financial advice industry. The result, a future of wealth that is decidedly female.

As women outlive their spouses, females could possess as much as 50 trillion in financial assets by 2030. That's only nine years away. And that's just the beginning. Behind the baby boomer demographics are generations of career-minded females who are fast building wealth of their own. Collectively, these women add 52 trillion to the global wealth pool each year and they will become the world's most powerful investors.

For financial professionals looking to grow their practices, this presents an amazing opportunity, but it will take a truly holistic approach to support this important demographic. Women, more often than not, experienced different life journeys and circumstances than their male counterparts. Understanding these journeys and leaning into the needs that accompany them will be critical to attracting and retaining female clients.

During today's webinar, we will address three unique life phases women frequently encounter, caregiving, divorce, and widowhood. To understand what women are experiencing in these stages and how advisors can help, we will share best practices and real-life examples on how to best assist women through these life transitions.

Our end goal is that insights, data and best practices that will be shared today will enable financial advisors to better serve the female investor. So, Candice, I would love for you to kick us off with setting the stage for our audience by providing some important data points advisors need to be aware of regarding women and investing and how COVID-19 plays into this.

Candice Tse: Thank you, Suzanne, for having me. And thank you all for dialing in. Look, we all face unpredictable life challenges. And it doesn't really matter if you're male or female. Unfortunately, we all go through things like divorce, death, illness and death, regardless of your gender. Now multiply those particular unpredictable life events with the economic realities that many women face.

And what we find is that women come out graduating, earning their degree, and realize from the get-go that they're actually making less than their male counterparts. That discrepancy compounds over time. On top of that, some women actually take time off after they have kids. And whether it's taking flex time or removing themselves completely out of the workforce, they're not making any wages during those years.

And also, what research shows us is that women tend to live longer than their male counterparts, so we actually need more money when it comes to retirement. So, these are key reasons as to why women face precarious financial situations. And it's really no wonder why many lack confidence when it comes to investing.

So, this is why investment advisors play a key role in helping females gain a lot of investment confidence and help them move towards financial empowerment. So, maybe it might be helpful if I just took a moment and dove deeper into one of those areas. So, for example, let's focus on the wage gap.

Today, there continues to be a 20% wage gap in the US. And the pay disparity really increases with income and age. And what we've seen is there's a 20% wage gap that can be decomposed in many different ways. Now, a small percentage of that wage gap can be attributed to a couple of things, whether it's your industry of choice, whether it's your occupation or your education.

But what about the other 18%, 18% of the 20% pay gap is largely unexplained. Perhaps 18% is likely attributed to things like unconscious bias. So, many people don't actually realize that they have these biases. So, it may not be intended, but this has major retirement repercussions for wealth. So, women with experience over time will realize that they are accumulating a lot less asset accumulation over their lifetime.

So, let me give you a hypothetical scenario. If we start off at about $52,000, to be exact that's the annualized median wages that men are making out of 2019. So, the annualized salary grows nearly $135,000 in nearly 45 years, with a year over year average growth rate of about 2.1%. Now, assuming that 18% wage gap from the start, women start with a lower base of about $43,000.

With that same growth rate, what you actually see is women have an annualized salary over 45 years of $110,000. So, women will earn $25,000 less over a 45-year period. Now, what does that continued wage gap look like in terms of 401(k) savings? Well, let's just start with your 401(k). Imagine you start off your job and you have nothing saved.

And assume that you work, in your first year, you put aside 15% of your annualized salary into your savings. Over 45 years, men have $7.3 million dollars in retirement savings. Allocating for the 18% wage gap, women will only end up with $6 million. So, there's a $1.3 million gap created by the wealth gap, which compounds over time as I mentioned them.

And it will require a lot of women to work additional years, eight additional years to close this gap. So, this can further be explained by the effects of COVID-19 as you mentioned. Women made up 39% of global employment but accounted for 54% of all the job losses just in 2020. So, the unemployment rates for White males in 2020 were 5.8%.

For women, it was 6.3%, but even higher for minority women, Asian, Black, Latinx, and especially for women with disabilities. So, industry concentration, as I mentioned earlier, explains for about a quarter of the difference in male to female job loss rates. But the remainder has been systematic in terms of social barriers, whether it's childcare responsibilities or primary responsibilities for unpaid care.

As you can see, financial advisors, as I mentioned, play a key role here, especially now as they need to be aware of the unique challenges and circumstances that women face and how COVID-19 has further impacted investing for all women.

Suzanne Siracuse: Yeah. Candice, that was fantastic. And thanks for setting the stage for our discussion today. And the COVID-19 statistics are truly disturbing. Hopefully, things will start to change in the near future. And again, as you pointed out, advisors have a great opportunity.

So, along with all of this information that Candice supplied, women investors may require different types of advice while going through those various life journeys. This is a critically important point for advisors to recognize as they serve them. And today, we're going to focus on three key areas that affect women and the retirement, caregiving, divorce and widowhood.

So, to start, I would love for Ann who is an expert on best practices in these segments to actually first define caregiver and then share some best practices you think are important for advisors to understand. So, Ann, would you first by defining what caregiver means.

Ann Hughes: Absolutely, and Suzanne, and to everyone, thank you for, again, joining in. And I'm thrilled to be a part of this. And I think, as Candice laid out, we see the statistics. We know what the impact of this is. But the fact to the matter is, we're still behind in the financial services industry in providing that advice and seeking out female clients.

And until we, as an industry, make them a priority, we will continue to lag behind. Because every industry statistic, times have changed, women want financial advice. We're finding that 70% of women are actually looking for financial advice. They may not be able to find the right financial professional, and that's what stops them.

So, to compound that, think about your everyday life and wanting to accumulate for retirement. And then, layer on what are really tragic or life-changing events. And then, it's even harder to find advice. Because let's face it, this is emotional. So, when you start with caregiving, for instance, it takes a different set of skills for an advisor to be able to really connect with a female client about the implications of caregiving.

And really, caregiving comes from two aspects. And it's those that are giving care and those that know at some point, they're going to have to receive care. And as Candice stated with life expectancy, with lower earnings over time, it is a real challenge for women when they think about how they're going to fund their own care. So, there's two things going together.

And it's very clear in our country. You see the dynamic that 33% of American families are in what we call the sandwich generation, meaning we have small kids or kids at home or funding college, and we're taking care of an elder parent or relative. And of those 33 families, 66% of those caregivers are women.

So, it's not just taxing on their time and their energy, but often their earning power. They have to take time off from work to give that care or they start depleting their own savings or retirement to take care of someone else. And so, as a financial advisor, we need an outside perspective, right? We get so deep into our own lives and our responsibilities.

Women are nurturers by nature. And it's so important for you as an advisor, when you see that you have a client that is either receiving care or giving care, to look out for her, to help her stay on course, and make sure that she's not depleting her own financial security so that she can take care of someone else.

Because one thing that we're very clear on, right, our loved ones, the ones we may be taking care of never want us to jeopardize our own financial security for them. But we often do, because of the feeling to nurture and the level of responsibility.

So, for financial advisors and having worked as others have referenced over 20 years in the industry and working with thousands of advisors, don't shy away from these emotional and difficult issues. You actually can be the voice of reason for her when she is tied or pulled in so many different directions.

The best practices, look at her life as a caregiver, ask her the questions, what is the impact of this caregiving doing to you and your own family and your own personal life? And have you set aside a budget for caregiving that you're not going to exceed that you're going to stay to? And what are you doing with your own personal finances? Are you continuing to save? Are you continuing to make a plan?

And it's troubling, because 69% of women do not have a plan for their long-term care. It's nothing anyone wants to talk about. But these issues need to be brought up. And the advisors that can participate that understand and ask those open-ended questions, how are you doing? Right?

How can I help you on the caregiving side of things, and then also help you plan so you may be in a different situation where your care is well-funded? Because we know in this country, monthly care costs anywhere from $3,500 to $7,500 a month, and 80% of nursing home residents are women.

So, we've got to find a way to fund that. Whether your care comes from in-home, whether it comes from assisted living or a true nursing home facility, we need to make plans and preparations. And because these are difficult topics to talk about, often they get avoided. And when you layer on the fact that, still in the financial services industry, we haven't seen women as primary clients, we layer on all of these life issues, and it becomes even more difficult.

And this is the time where she actually needs the most advice. So, it's a wonderful opportunity for the industry as everyone is excited. It's not just the right thing to do. But in a recent Oliver Wyman study, they found that they believe that there's $700 billion in revenue that's being left on the table in the financial services industry because we're not working with women.

It is the growth of our industry. It is the right thing to do. And so, I think, by doing these types of webinars and giving advisors solutions and data to help them be able to better serve their female clients is essential.

Suzanne Siracuse: Yeah. And that was fantastic. And I mean, I couldn't agree more, right? At some point in our lives, we're all probably going to be a caregiver at some point. And I know, personally, my advisor helped me when I was going through caregiving with my mother. And I will probably never leave that firm because of what a great resource they were to me and my husband.

So, I think your point is so well taken. The amount of money that is out there, the opportunity plus it's a nice and a good and the right thing to do, so really great information and insights. Thank you. So, Pui, you work with hundreds of advisors each year. It'd be great to get your perspective on what you have seen to be an effective way to communicate with women who are caregivers.

Pui Kalyanamitra: Yes. And I want to echo everything that everybody has said today. Thank you so much for having this event. And thank you for letting me be a part of it. I'm very honored. And I love this question because, actually, this is how I grew up. I grew up in a multi-generational household. I mean, I grew up with my grandparents raising me and having my mom work, and just seeing, as they were raising us, raising young children, the stress on the grandparents.

But as they got older, really the stress that became who was going to take care of them. And then, it really comes down to one caretaker ends up raising their hand and taking that responsibility onto themselves. And you see firsthand the struggle that it is. You see firsthand the guilt that you might have. Am I making sure that I'm taking care of my own family, my own children? Am I giving the right type of care to my elder parents that need it?

And I just remember growing up thinking, "Gosh, I don't ever want to be part of this." And the reason why my grandparents had to be part of that was it was a financial reason. They didn't have the financial resources to be able to have caretakers come in or to be able to have a care facility to go to.

And so, it was really important in our family to make sure that as my parents age, that they would have the resources to be able to have that type of care. Unfortunately, my father passed away fairly unexpectedly. And so, the responsibility of taking care of my mom then fell on to the shoulders of my sister and I.

And instead of it being a financial resource problem, it became the fact that, everybody can laugh at it, she's just deathly afraid of ghosts. So, she can't live by herself. She just has never lived by herself. She's never been able to do it. So, it was something, it was a responsibility that I took on, also having a four-year-old child, right?

So now, we have a little guy in our house, we have my mom who's aging, who's able to help us, but you can start to see the decline. And you can start to see, gosh, how taxing this is going to be on the entire family. And I think one of the things that I realized as I started to talk to all my advisors, I've known for so many years through this is just how many people are going through this situation, as Ann said, right?

How many people are actually experiencing this that don't have somebody to talk to, that don't have somebody to communicate with. And so, I would say the best way to communicate first is to come from a place of shared experiences, if you have somebody.

And I would tell the advisor this, if you are going through this, if you have somebody that you know, if you have a family member that has been through this and is part of the sandwich generation as I am or is part of Generation Z as they call it, generation caregiver, make sure to share that with your clients. Because that just creates a relationship that creates a bond.

You can be a resource for them. I remember having this conversation with one of my advisors, and he said, we were really concerned about how she could get up and down the stairs. And he had said, "Oh, gosh, Pui, so many of my clients have been going through this that they actually have an elevator company that you should contact."

And in my mind, I thought, "Wow, elevators that must be so expensive, right?" But just contacting them and having that resource, it made me realize that maybe it wasn't as onerous as I thought it would be. Maybe we can make sure to have my mom in a comfortable situation. So, again, it was having that resource, having that when they shared an experience.

I have so many advisors now that tell me, where they're moving their parents in or when they talk to their clients and they're going through the same situation. Again, it just creates that bond. So, I think it is number one, sharing those shared experiences. And number two, really having the empathy, the empathy as Ann said, to understand that this is a big life decision, one, to take on this responsibility.

But then, also, the idea of how concerning it's going to be for them looking down the road of taking care of themselves. Again, as I had mentioned, for sure that I didn't want my mom to, we didn't want to have to be the caretakers for her. We knew what a stress and what a strain that was. But really, at the end of the day, we felt we didn't have any options left.

So, how do we take that on ourselves? And so, for me, being part of this generation, I wanted to make sure to plan for my son. I wanted to make sure to plan, to make sure that I have the resources. Not only the resources, but I have the capabilities, also, if that day comes to be able to live by myself or my husband and I to be able to live by ourselves.

So, I think that those are the things that I would focus on as an advisor to really, A, be a resource, have these conversations that are shared experience conversations and understand what they will be and might be going through?

Suzanne Siracuse: Great. I couldn't agree more. And thanks for sharing your story. Because again, as I mentioned earlier, almost everyone is going to have to go through this. There is that shared experience that really brings people closer together and I think can only add to an advisor how they're talking to their potential clients and prospects.

And empathy, of course, you can never have too much in the financial advice profession. So, thank you for sharing that, Pui. So, before we touch on our other two areas of focus today, divorce and widowhood. One major theme each of these segments has in common is that in most cases, the women going through that lack confidence.

Lack of confidence is cited as a reason, most often, in most cases, that women tend to not be as interested or focused on their finances. So, Candice, at Goldman, in response to this, you created an educational presentation called EMPOWER, which is designed for advisors and female investors to work on together, which is great. Can you go over that program and is it working?

Candice Tse: Sure, happy to, Suzanne. I serve as the US Head of Market Strategy within Goldman Sachs Asset Management. And my team and I basically focus on macro and market research. And I've been with the firm now for over 20 years. And pre-COVID, I was traveling about two to three times a week, speaking to clients around the country about what was going on in the economy and what was going on across markets.

So, I noticed that when I was speaking with our best clients, female clients, around the country, many of the women who are successful doctors, lawyers, accountants, small business owners, entrepreneurs, they weren't involved in finance day in day out in their work, and many didn't seem comfortable about hearing about things like GDP and inflation, monetary and fiscal policy.

So, they really didn't want to talk about fixed income and equities and investing in other asset classes. So, in speaking with them, I found that the main reason why they weren't as interested is exactly what you said. Many of them were not interested because they did lack a little confidence when it came to investing.

So, that's why I created EMPOWER, the framework, to help women gain more confidence when it came to investing. So, this has been a very popular program, particularly with our clients. It's basically EMPOWER, which is a seven-letter word. It's a mnemonic, meaning every letter of the word represents a step. And each step helps women move towards financial empowerment.

So, just to give you a semblance of what that means, I can walk through it if you're interested. But it has been very powerful because we actually walk through the various steps that a lot of clients know that they should be doing but haven't done so already. So, I think that real-life experience and that interaction makes it a lot of fun, and takes the edge off of finance in general.

Suzanne Siracuse: Great. Yeah. And it'd be great, too, first of all, how does an advisor that may be listening to this today get the empower presentation and so that they could go through it and just someone at your organization help them go through it? How does that all work?

Candice Tse: Sure. So, our materials are available, so should you be interested as an advisor to utilize them, just reach out to your representative, whether it's through your organization, reach out to our representatives to provide you with the deck. We have a seminar. We have workbooks. We have previews that we're able to provide you with.

So, if you want someone from our firm to come in and speak with you, we're happy to do that, to speak with your clients, we're happy to do that as well. And the workbooks I found has been a great lead behind, because after the seminar, you follow up a couple days later, a week later or two with this workbook.

And you actually bring the clients in or these days, because of the pandemic, you can actually have conversations with them via Zoom to follow through with the seven steps and actually fill in the blanks with them.

And I found what's actually been really helpful is providing a copy to both the female and male spouses, or both folks, and just letting them fill it out on their own and realizing that for that same amount of assets that we're talking about, two people have very different views of where the money is going and how much money is coming in, and how they want to see it being invested in the future.

So, it's been a very helpful exercise from that standpoint. So, feel free to reach out to us if you need it.

Suzanne Siracuse: Yeah, that's great. And have you seen that some of the female investors become more engaged and feel more confident after going through this program?

Candice Tse: We have. I mean, it's quite simple in terms of the framework, but getting them to think about the things that they need to do. And I think the most helpful step is Step Five. But we go through four steps of all the things that we as women should be doing. And by Step Five, I think everyone realizes there's so much that I have to do on my own. And that's the reason why I've been putting it off.

But the fifth step is W, work with a financial advisor. And what this comes out to is that you don't have to do this alone. I mean, think of COVID-19 right now. In the past, we were all going on WebMD trying to self-diagnose the flu or the cold, whatever we thought we had, we thought we could be our own doctors. But today, if you're not feeling well, you're not going to self-diagnose on WebMD, you are going to the hospital, you're going to urgent care.

So, you're going to the medical professionals. So, same thing with your finances, maybe you're not in the medical field, you're not in the financial field. So, go to a financial doctor, someone who is trained and does this day in and day out to help you through with the processes. And at the end of the day, we've actually found that folks that have started to work with financial advisors have more confidence.

And when you move into Step Six, which is educating yourself, it's not enough to give your money to someone else and say, "Okay, I'm done with it." You need to stay educated, because these days with social media, we're hearing all these headlines about vaccine distribution that is not going as well as planned. You hear about the weather in Texas.

You hear about news with trade tensions with China. All of those things could make an investor pick up the phone and call their advisor and say, "Liquidate my portfolio, there was a headline today in the news, and I just have to get out." But what you actually realize as an investor is that that's probably the worst time to get out of the market.

Because if you think about it, your strategic objectives and goals probably have not changed since that headline was published and realizing that these headlines are supposed to grab your attention. Many folks are making the wrong decisions at absolutely the wrong time.

So, being educated or actually make the right call and allow you to call your advisor and say, "Well, what should we be doing? Should we be taking this dip and going into the market? What should we be investing in?" So, staying educated is very important as well.

And that gives investors more confidence when they have someone working with them, but also have the know-how on their own being educated on the space not to make rash decisions based on headlines.

Suzanne Siracuse: Yeah. I'm so glad that you mentioned that because what happens, right, and you see this happening is people get emotional, right? They actually do the opposite of what they're supposed to do a lot of times with some of these headlines. They withdraw their money, and then they leave the market on the low and don't take advantage of when it does come back, which it normally has been and proven that it has always done.

So, thank you for bringing that up, too, Candice. So, Ann, let's next touch on some best practices for our next segment, which is divorce. What do you recommend to advisors on how to best engage with this segment? And do they prefer women advisors over male advisors? I'm just really curious about your take on this.

Ann Hughes: All great questions. And it's so interesting in this country, because divorce rates for every segment, except later-in-life divorces are going down. And so, there's this fairly new term called Gray divorce, in which we're finding that women from 53 to 64 are getting divorced at triple the rate of when they did before 1990. And women 65 and older are getting divorced at six times the rate that we've seen prior to 1990 when we've been tracking this.

So, this is a very new phenomenon. And it's one of those that it's difficult. Again, I keep going back to the fact that what we're talking about today are emotional issues. It's human nature to shy away from things that are difficult, right? Even with our friends, it's hard to have those conversations. How are you doing? How can I help you?

In the advice world, it becomes even more important, because with Gray divorce, we have seen over and over that women bear the brunt of the financial impact. Because if you think about it, their later in life, they're heading toward retirement. They've stopped working in many cases because they've achieved that retirement age.

And then, out of nowhere or when a divorce is decided to happen, that one retirement income has to support two lives. And it usually is desperate and affects women much more dramatically. We also find that when those decisions are faced, often, men say, and again, this is not categorically across everyone, but you keep the house and I'll take the assets.

And financial advice becomes so important at that point because these are emotional issues. And she may feel, "Oh, I want to stay in the house. That was where I raised the kids. That's where my memories are." But liquid assets are what are going to get her from where she's at now to the rest of her life. And we need that guidance. We need that financial professional.

And I think it's so interesting because Candice was... money is emotional. That is, other than our family and our loved ones, it's the most emotional thing that we do. And we often make poor decisions left to our own devices based on emotion.

And for the thousands and thousands of seminars I've done to female clients, I talked to them about the fact that 20 plus years in financial services, I have a financial advisor. Even though I have my licenses designations, because I need that, I need somebody that can help give that advice to me that is non-emotional, that is non-reactionary to headlines.

That sees the big picture of how I need to live my life. And so, I think for advisors, it was women going through divorce. Reach out to them. Build a client base around that. There are very successful advisors who have built a practice around helping women, men and women, but primarily women, go through a divorce and get comfortable with that.

And you have to understand, right? Even the most sophisticated of investors, if they're women, they're experienced, once some emotional event happens like this, they're overwhelmed. They need guidance, and for you to be able as an advisor to help her through that, to provide some calm in what could be a very disruptive, either emotional, financial situation.

That's what she's looking for. And I would also say to advisors, if you work with women going through a divorce, you can tend to put it on autopilot, right? Because this is your practice, this is what you know, and sitting down and saying, "Oh, everything's going to be fine. I'll take you through this." Well, it's likely her first divorce, right? It's her first experience.

And so, taking the time to ask the questions of how are you feeling about this? What is the financial impact if you had to rate your financial health between one and five, what score would you give it? What would you give your financial knowledge? What are the things that worry you most? Where can I help?

And being, again, that traffic director between whether it's the divorce attorney, the estate planning attorney, the CPA, there's so much that advisors can do. And if they invest the time and effort, you get clients for life. And I think one of the things that we can't discount is, women by nature operate on referrals.

And so, studies have shown that women refer 26 times to our male counterparts, 11. It's incredible, right? So, when you serve your female clients, well, you understand their emotional issues. You invite them in to have those emotions and not push it away or feel uncomfortable, you get clients. And you get clients for life and you continue to get more clients.

And so, I think, the best practices here are certainly, welcome that, get comfortable with that, treat everyone as an individual. We know in study after study that the way women pick their financial advisor is they assume table stakes that you're successful and that you have a good track record, right? I mean, if you're well known, they know that.

They want to work with someone that there's a relationship of trust, understanding life goals, an advisor that actually listens more than they talk. She's looking for someone she can make a personal connection with. And so, to your last question, Suzanne, really most studies show that women do not have a preference in working with a male or a female financial advisor.

In fact, the most recent study showed that 93% of women had no preference. What they wanted were the things that I mentioned. A relationship built on trust, on communication, on honesty. And women see more seeing money as what is it that I can do with my life?

How can this help me with the things and how I want to live versus returns and those details? And it's not that she doesn't want great returns? It's that she wants to communicate it at a different level.

Suzanne Siracuse: Yeah, now, I mean, again, just some great points. And I love that traffic director reference, because if you hear that, how important it is, there's an opportunity for advisors to really develop out their centers of influence with estate planners, CPAs, divorce attorneys in this particular area.

There's a lot of coordination that needs to happen when you're dealing with this particular segment, so just some really great advice. Thanks for sharing that, Ann. And so, Pui, what has been a successful strategy that you've seen advisors incorporate to best serve women going through divorce?

Pui Kalyanamitra: Yeah, I think that it really dovetails on both what Ann and Candice, and Suzanne, what you said, and I really think it comes down to two things. It comes down to education. And it comes down to creating an ecosystem of experts that your clients can tap into. And it is such a huge missed opportunity.

Twofold for advisors, a huge missed opportunity if you're not addressing this marketplace because of just the assets that you can control and you can make sure that you manage for them. But a missed opportunity in terms of helping them as well, helping them emotionally and helping your clients through this. And think about this, think about, I mean, any female, I think, would agree to this.

Think about your friend group, your family group, somebody that you know. Everybody has a story about how somebody went through a divorce and felt their mom, their sister, they, they got the short end of the stick. And a lot of the times it came down to education, not knowing what they were entitled to. And I remember early on in my career, I dedicated myself to being a social security expert.

And I got called into an office one time. And this advisor had a client call in and the client was about to sign off on her divorce. And he goes, "Hey, Pui, I remember you being a social security expert. My client said that she had to give up half of her social... She was a stay-at-home mom and she was very concerned that she didn't have any income. And so, she was going to give up part of the house and the liquid assets as Ann had spoken about in order to get a portion of the husband's social security income."

And I asked how long they were married. And they were married for over 10 years. And I said that's not the case at all. She would be entitled to that regardless. So, the other side of that was the other financial advisor, the lawyers, were using social security as a pawn in trying to hold the assets over her head for divorce, which was something that, again, he had no right to do.

But if they had signed a divorce decree, it probably would have gone through. And she would have been out maybe a house, maybe liquid assets, just because she lacked confidence in her ability to have an income. And so, that really opened my eyes to the educational component of this, of how we need to educate women going through divorce in a very informal way even.

And this is what I do for several hundreds of my advisors. Of the thousands of seminars that I've done in the past, a majority of them have been around something that I do informally call, cover your assets. And it's just asset titling, social security, I spell assets a little bit different, income, or investing and trust, right?

And it's just a very informal conversation that I have advisors bring their female clients to if they're going through a divorce or not, or not yet, to make sure that they understand with all those things, where they need to be educated, what they need to look out for.

I mean, in asset titling, I've seen that so many times in my travels with advisors, of a beneficiary designation being not corrected or not. If they're going through a divorce, they end up forgetting. The last thing that they do is forget to change the beneficiary designation. I actually saw this in a husband and wife going through a divorce. They both had two different families.

So, they already had grown children from two different families, and they got married, and then they were going through a divorce. Well, my advisor was the one that was handling the assets, actually, for the husband, but the husband had older children. And what had happened was when the husband passed away during the divorce process.

He had every intention of passing along his assets to both his wife, his current wife, and his children from the previous marriage. But what had happened was, once he had passed away, the current wife, again, as they're going through a divorce, took off. She was the beneficiary and the kids were the contingent beneficiaries.

She had then taken off the husband's kids as the contingent beneficiaries, put on her own kids, and now, yes, exactly guessed, because now the kids are no longer eligible for those assets. That was the intention of those assets. But they never got the ability to ever get that as an inheritance because of what happened just purely on asset titling.

So, number one, I think the strategy there is having these educational events, making sure that your clients understand what's going on. Exactly like Candice said, that number six of educating yourself, but the financial advisor also taking the onus on themselves to educate your clients. And then, really creating that ecosystem of experts, as we talked about.

It's making sure that, A, do you want to be the expert, right? Do you want to get your certified divorce financial analyst certification, which I've seen a lot of advisors do and have tremendous success with? Or do you want to make sure that you have a divorce attorney that you can pay maybe hourly to be a resource for you? Do you then, a realtor is a huge one.

There's so many situations where the female doesn't know how much a house costs, right? You can only do so much on Zillow, maybe you could have gotten a lot more because you finished your basement, have a realtor there so they can actually do an analysis of how much that house actually costs.

Have a CPA on hand, but I think it is helping them plug into, again, what I either call your Rolodex or those experts, so that they can feel comfortable doing it. Again, social security, when we're talking about Gray divorce is another big one that a lot of divorcees or people going through divorce don't understand. So, those would be the two things that I would say the best strategies for advisors to implement.

Suzanne Siracuse: Yeah, no, again, just really great, some great advice and great best practices. And I love that really leading with education. And you can't believe that some of these mistakes are happening or that lawyers can position things in a way that would be so terrible for the woman in this situation. So, the advisor has, again, just such a fantastic opportunity here. So, thanks again, Pui.

We've heard some great best practices, real-life scenarios, and how two suggestions for advisors so far, so thanks. In addition, I also want us to address the various investment-focused challenges that all of these groups actually face. So, Candice, I know as part of the EMPOWER program, you feel it's critical for advisors to discuss common investment challenges with their female clients and prospects.

So, it'd be great if you could provide a few examples of what those investment challenges are. And then, what are the solutions that you recommend to go along with those?

Candice Tse: Sure. I think the challenges lie in taxes. We've talked about that a little bit. But I think tax-efficient investment vehicles are very important when it comes to investing. So, just think about the fact that every investment that you decide to take comes with a cost. And out of everything, taxes will stand to take a big chunk out of your returns.

So, tax-efficient investing can actually help a lot of female investors minimize how much money goes out in terms of taxes and how much you can maximize in terms of returns. So, tax-efficient vehicles that should be considered, for example, employee-sponsored types of programs for companies that you may work for.

So, my company has a 401(k) program. If you work for a not for profit, similar program called the 403(b). If you work for the government, 457 plans. All of those are employee sponsored, right? So, if you're not working for a company, if you own your own company, maybe you're a small business owner, well, there's various options for you to consider for you and your employees as well.

And then, of course, there are options such as the IRA, individual retirement accounts that you should be thinking about when you're thinking about tax efficiency. And here, you can basically select whether or not you want to invest in a traditional IRA, where you get taxed when you take the money out or if you're looking at a Roth IRA and you know you'll have a higher income later on in life and you want to actually pay the taxes now so you can access the assets later on, free with growth and also withdrawals.

That's also a way that you can consider from a tax perspective. Now, some other considerations I would say, particularly for women, is charitable giving. So, we know that a lot of female investors are interested in giving back. And they want to help through things like philanthropy. So now, more than ever, I would say that something that's top of mind is a concept called ESG and impact investing, E, meaning the environment, S, meaning social, G as in governance.

And what you can actually think about when you're thinking about the environment could be climate change, could be carbon emissions. What you're thinking about when you're thinking about social is really gender and racial diversity. And of course, governance relies more on how people are actually running their companies and their firms.

So, those have come top of mind, because surveys have shown that 76% of women actually do care about the environment, social, and governance. And that's very important to them when they're making financial decisions. So, especially through COVID-19 as we talked about earlier, this greatly amplified the need to think about the environment, diversity, and also how companies are being run.

So, certainly, I would say, another consideration for women is legacy planning. And here, what we're thinking about is how you prepare for your future in terms of how you're going to divvy up your property and assets should you pass. How would that look to your loved ones? As Pui has mentioned in her great example, it does make a difference.

So, people also call this various forms of estate planning. So, this is a consideration for women and I would say is highly important, especially for advisors, who are focused on women, particularly widows.

Suzanne Siracuse: Yeah, no, that's great. Thanks, Candice, for that great insight. Comment real quick on ESG. I actually brought that up to my advisor. And he had said, "Oh, yeah, well, we're still not, we haven't dipped our toe into really reviewing a lot of ESG," which I was surprised at.

And then, a month later, he came back to me and said, " I'm getting a lot of questions about this, specifically from my female clients." And he's like, "So, we're doing due diligence on various funds that can fulfill the ESG inquiry from our female investors." So, to your point, 100%. Legacy planning critical, right, and especially as it relates from a widow perspective.

And that's actually our next segment that I want us to delve into. So, studies show that, I think this is such an interesting statistic, 80% of men die married and 80% of women die single. On average, a wife outlives her husband by at least 10 years. And according to the census bureau, there are an estimated 20 million widows in the US with 1.4 million new widows being added each year.

So, Ann, are you surprised at these statistics? And what are some of the ways in which advisors can best serve this large and growing group?

Ann Hughes: You know, I think the statistics are so impactful, because it quantifies it and it shines a light on it, but not at all surprising. We know life expectancy. We know that this is going to happen. And so, I think it becomes so essential for us as an industry to focus on widowhood as a central issue for women, just like the other two topics that we've talked about.

I mean, if you look at it, the average age of widowhood in this country is 59.4 years of age. You know, back in the old days, when I was in front of people giving seminars, I would ask them to guess. And they would say, "Oh, 70, 75." Now, that number only comes out every 10 years with the census, so we'll see what it is as the next census comes out, but no one expects it to change dramatically.

And so, knowing that and knowing our life expectancy, widowhood is mostly a female issue. And I would say to advisors, again, this is the most difficult time in her life. And she needs someone that has this calming effect that says, "Okay, I will help you through this process." One of the things that repeatedly when I talk to female clients, what they don't want is, "Oh, okay, I'll handle everything, don't you worry."

She's already worried because maybe she hasn't participated in the process as much as her male counterpart or her partner. And so, she has that educational gap and that unknown. And so, really, for advisors to connect with women and connect with those going through such a tragic event as widowhood is starting from the very beginning, right?

One of the things that's so important is while both parties of the couple are still alive, get to know them, right? We've heard the statistic over and over again that 70% of women fire their financial professional upon the passing of their spouse. You don't want to be in that 70%. And the reason for that is you didn't have relationships with both of them.

So, once her husband passes, she doesn't really know you, she hasn't had a connection. She starts hearing from family, she starts hearing from friends, "Oh, maybe you should work with my advisor, they are great." You want to avoid that. And so, while they're both together and alive, forge those relationships. Go back right now. Take an inventory of your book of business.

And for your female clients, ask yourself, how well do I know the male and female counterpart or both parties in that partnership or marriage? And if there's gaps, start to fill them. Talk about the importance.

If it's just the male that always comes to meetings, say things like, "You know, it's important to me, I don't feel like I can do my job to the best of my ability if I'm not meeting with both of you. I need to understand both of your needs and desires and concerns in retirement."

So, foster up and shore up those relationships with female clients that you already have as part of a couple. If she's coming to you and you haven't been with them as a couple, and you're her new advisor, take the time to make this personal, asking questions. I'm so sorry, I never knew your spouse. Can you tell me about them? Can you tell a story that was really meaningful?

How did they feel about making sure you were taken care of? You need that connection, and it is so important. And again, I see advisors shy away from such emotional issues. And we can't, because these are, again, as I said before, the crux of where women need the most advice.

And so, get comfortable with that, have Kleenex in your office when we can all meet again, invite those conversations, ask her to talk. And then, again, break the process down into manageable steps. And one of the things I think is so important. It's so overwhelming, when you have a spouse that passes.

Aside from dealing with the emotional aspect and funeral arrangements, then there's financial decisions that need to be made immediately. And then, there's midterm decisions. And then, there could be longer term. Make sure, chunk those out for her because it's so much, and finances are just one piece of what she's dealing with.

And the most successful advisors that work with widows understand that. They say, "You know what, I am here to help, I'm here to answer your questions. I'm not saying I'm taking control of everything, and you don't have to worry about a thing. I'm saying I'm going to be your partner in this." And let's break that down into manageable decisions and help them set that timeline.

And again, it's back to that traffic director working with that state attorney, working with all of those people that are involved in the process when someone passes away, to help her, to feel she has one source and a second pair of ears that can help coordinate all that's going on in her life. And so, I think it's just such an instrumental time for women and for our industry.

I don't want to hear this statistic anymore, the 70% leap. There's no reason for that. And I also think that such an opportunity to build their business. And I've worked with advisors where that's their core specialty. And what they've done is they've created widow workshops. And they've done half day seminars, again, back when the world was open, but you can certainly do these virtual ones.

And what they would do is they would provide the financial peace. That they would bring in a counselor to talk about the different emotions around in the grief cycle. They would bring in a nutritionist, all these different aspects to treat the whole woman and the whole crux of what was happening to her. It's wildly successful because you're showing you care and you understand that this is impacting every facet of their lives.

And I will never forget there's a financial advisor that I respect so much in Dallas and she brands her practice. She says, "My practice is built on women and the men who love them. And I want to make sure they're taken care of." And again, she's very successful, but she's taken the time to understand all the dynamics that go into it.

And I go back to the fact that you don't have to be a female advisor to serve widows. But you have to open up your practice. And you have to get comfortable with dealing with these difficult emotional issues. And really, the business is there.

But partnering with others, building your professional network makes it so much easier to add this value proposition to women, making sure, again, that you take the time to understand them. To build that relationship of trust and not just assume that they know nothing or they want you to take care of everything. They often want to voice and they want to be educated.

Suzanne Siracuse: Yeah. Ann, that was great. Thank you so much. That's some great insight and advice to the advisors listening. So, Pui, sometimes we learn better from our mistakes. What are some of the most common challenges advisors face trying to best work with widows? And what suggestions do you have for them to avoid some of those common mistakes?

Pui Kalyanamitra: Yeah. I think it's a lot of what Ann had mentioned. And I think the first one is establishing that relationship, making sure that a relationship is established from the get go, because by the time you get that phone call, and if you've only spoken to the wife once, twice, even in a year or maybe in three years, those assets are probably going to be part of the 70% that leave.

So again, it's establishing that relationship and engaging often. I would say that one of the best advisors that I talked to, and he was a very, very successful advisor in one of the states that I covered. I remember asking him, "Now, what makes you so successful? I hear your name all the time and you just keep coming up, what is it that you really attribute to this?"

And it wasn't time in the industry. It wasn't in his investment acumen. He said, "It is my on-boarding process and my engagement process." He goes, "My on-boarding process, specifically, I make sure that unless the husband and wife can meet together, I will not meet with them. And I tell them that from the get go and establish that from the get go.

And then, after that, I make sure that they sign off on how many meetings are required to come with me together. So, it's not that I meet with the wife once, we have some pleasantries, and then I don't see her again for three years. So, I make sure that we engage with her quite often." And then, I said, "Wow, why is that?" Obviously I know the answer because of that 70% I'm sure.

And that's exactly what he said. He goes, "Statistically, why would I put all the work and effort into a financial plan into getting the assets over, into moving everything over, and creating this relationship, when statistically, if I don't have both the spouses on board, those assets are going to leave me anyway."

So, I think that is the number one mistake that advisors tend to make is it's easy to say, oh, she doesn't want to meet, this isn't her, she doesn't have the time, she's dealing with the kids, this isn't her area of expertise. You have to force that situation. You have to force that engagement, because if you don't, again, those assets will leave the door.

So, I would say that's number one, is establishing that relationship, and then really engaging and finding different ways to engage. Again, as Ann had mentioned, I think that as you go through the process, and again I've witnessed my mom go through this once my dad passed away. But it is, there's several stages of that grief.

There's several stages of when you are willing to listen to what needs to be done. And that's not very early on. And I think as financial professionals, as advisors, primarily with males, just characteristically it's about solving a problem, right? Okay, the problem is your spouse passed away, now we have to do all these changes to our beneficiary forms, and we have to do X, Y, Z, so on and so forth.

And really, at that point, maybe all they need is a sounding board, right, so not necessarily for you to solve their problems immediately, but make sure to be a sounding board for them through all those different stages that they're going to go through. And eventually you can get to that stage of, okay, what are we going to do in terms of transferring the assets? What are we going to do in terms of getting the children involved?

So, I think that's important, because I have seen so many assets leave the door when the female finds that, oh, gosh, he was just too pushy. He never even called me. I always dealt with the secretary. I was dealt with the junior advisor. And again, I'm not saying that the advisor was doing that out of malice at all.

What it was probably, he had this great relationship with the husband, everything was established, he thought it was all good and the wife never really wanted to come in, or that's how he perceived it. And then, now, immediately, he wants the assets to get rolled over. He wants to talk about what to do. Again, it seems, what I've found is that it seems off-putting to the female, right?

So, I think that those are the things that advisors can do, is again, make sure that they require the establishment of the relationship, and then engage often in the social aspect before this happens of what you're doing to create a relationship with the spouse, with the female, outside of her husband even.

Be at the educational events. I always say for my guy advisors, I say, "Man, it's the easiest thing, think about it. Women don't go to the bathroom by themselves. You want to build a practice? This is a great way to engage women, have their friends come over.

And then, also, do events where they want to be a part of because they will bring friends." And as long as you establish that relationship, I think that it goes a long way once they do go through this tragic life event.

Suzanne Siracuse: Yeah, that's great. I especially love that one advisor who says, "I'm meeting with both of you. And that's the way that I work." I think that's fantastic. And if more advisors did that, I think that you wouldn't have that statistic as you alluded to. So, I cannot believe it. This has been such an amazing discussion. But we are almost at the end of our webinar.

And so, I'd like to ask each of you to share with the audience, if there's one key takeaway that you'd like to leave our audience with, what would it be? Now again, we only have a few minutes left, so just quickly. And let's start with you, Pui. What is your key takeaway for our audience today?

Pui Kalyanamitra: I think my key takeaway is very simple. Ask for help. There's so much help out there. There's help from your partners, your wholesaling partners. There's help from, I'm sure, your company. But even Transamerica, the resources that we have in terms of getting on our website and understanding that we have a dedicated white paper for this topic, women and investing in general.

We have checklists, divorce checklists, estate planning checklists. We have resources for social security and dementia, but just understanding that there are people out there to help. And there are resources that can help you through this discussion.

Suzanne Siracuse: Great. And you can go get the resources, ask for help. And where can they find all those resources?

Pui Kalyanamitra: Yes, you could find-

Suzanne Siracuse: On the Transamerica website?

Pui Kalyanamitra: On the Transamerica website, exactly.

Suzanne Siracuse: Great. Candice, what is your key takeaway for our audience?

Candice Tse: Well, Suzanne, you had a great start at the beginning of this panel. You mentioned that female investors control about $22 trillion in investable assets. And many of them are in need of financial advice, but simply don't know where to turn. So, this is a huge addressable market for many advisors. So, if you're an advisor and you're not addressing it, just remember, someone else will.

And the way you can address it, as we mentioned before, is with the EMPOWER framework. So, should you require or want to partner and take a look at our materials, the EMPOWER framework is available for you to utilize.

Suzanne Siracuse: Great. Wonderful. And Ann, what is your key takeaway for the audience?

Ann Hughes: Thank you. And I echo both of the comments that you just heard. And I would encourage advisors, particularly when we know 80% of advisors are male, to challenge yourself, to leave your comfort zone. It is human nature to surround ourselves with people like us. It's comfortable. It's easy. And we find the same with the client base.

And so, challenge yourself, break out of that mold. Again, just as Candice said, "The opportunity is huge. And if you're not doing it, another advisor will." So, look at your book of business, as I said before, look at the amount of female clients you have. What are you doing to prospect more as you know the wealth transference to women is unbelievable and the largest growth opportunity for our industry?

So, my takeaway is, really, get out of your comfort zone. If you haven't worked in this area, again, so many resources are available to you to help you start in this area. And you'll see the results. Your practice will grow through women. And again, I think don't avoid those emotional issues. Do not be afraid to have those emotional conversations with all of the three categories we talked about today.

Suzanne Siracuse: Wonderful. And yeah, get out of your comfort zone. It'll increase your business, essentially, right?

Ann Hughes: Yes.

Suzanne Siracuse: Those were fantastic takeaways. I want to thank our panelists so much for providing their insight and best practices for the audience listening today. And I want to thank the audience for taking the time to want to learn how to best serve female investors. I'm Suzanne Siracuse, thank you so much for joining us today.