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ISSUE 32: 2017

Insights

Financial Empowerment: It’s a Woman Thing

U.S. Trust seminars show that women can bolster their financial acumen by tapping a powerful but underutilized resource — each other.

Photograph by Jeffery Salter

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Knowledge is power, the adage goes, but according to one study of women’s financial challenges and goals, it does not translate into confidence. Conducted by the Center for Talent Innovation (CTI), Harnessing the Power of the Purse: Female Investors and Opportunities for Global Growth found that while the financial literacy scores of women and men tested by CTI were virtually the same, women were 44% less likely than men to describe themselves as financially knowledgeable. 

To address the confidence gap, U.S. Trust organized three events in 2016 that focused on financial topics deemed important by U.S. Trust’s female clients: estate planning, investing and charitable giving. The sessions — limited to 20 female executives and business owners in the Los Angeles area — provided the attendees an opportunity to discuss their financial challenges and learn from each other’s experiences.

The sessions sparked real excitement not only about learning more about managing wealth, but also about learning from successful, like-minded women. The sessions were so well received, U.S. Trust may expand the program beyond the West Coast and to women who are not business owners or executives.

The sessions sparked
real excitement not only about learning more about managing wealth, but also about learning from successful
like-minded women.

What the women wanted to learn varied with their circumstances. Younger attendees tended to focus on their careers and building wealth, while older participants were more interested in transferring wealth to future generations and being able to manage their finances if their spouses became incapacitated. The consensus among the attendees was that while they did not need to be experts on any of the subjects discussed, they needed enough knowledge to have intelligent conversations with their financial advisors.

Unique financial challenges

The sessions were geared to female executives and business owners because working women carry financial burdens men typically don’t. A prime example: caring for an infirm spouse or parent, which can take women out of the workforce and increase their financial obligations. To the latter point, the 2014 U.S. Trust Insights on Wealth and Worth® survey of high- and ultra-high-net-worth individuals revealed that 65% of female executives surveyed had provided financial assistance to an adult family member, and 50% of them said providing that support had a negative impact on their finances.

The women at the events were well aware of the challenges presented by the societal expectation that women will care for aging parents or a failing spouse. Several noted that assuming the caretaker role deprives them of the time, focus and, in some cases, money necessary to secure their financial futures.

This raises an important point. When it comes to finances, women need to put themselves first because if they don’t take care of themselves, they won’t be able to take care of anyone else. It is very much analogous to the rule that in the event of an emergency, air travelers put on their oxygen masks first before attending to loved ones. 

Photo credit: Getty Images

IMPORTANT INFORMATION

Any information presented about tax considerations affecting client financial transactions or arrangements is not intended as tax advice and should not be relied upon for the purpose of avoiding any tax penalties. Neither U.S. Trust and its representatives nor its advisors provide tax, accounting or legal advice. Clients should review any planned financial transactions or arrangements that may have tax, accounting or legal implications with their personal professional advisors.

Always consult with your independent attorney, tax advisor, investment manager and insurance agent for final recommendations and before changing or implementing any financial, tax or estate planning strategy.

OTHER IMPORTANT INFORMATION

The 2014 U.S. Trust Insights on Wealth and Worth® survey is based on a nationwide survey of 680 high-net-worth and ultra-high net-worth adults with at least $3 million in investible assets, not including the value of their primary residence. Respondents were equally divided among those who have between $3 million and $5 million, $5 million and $10 million, and $10 million or more in investable assets. The survey was conducted online by the independent research firm Phoenix Marketing International in February and March of 2014. Asset information was self-reported by the respondent. Verification or respondent qualification occurred at the panel company, using algorithms in place to ensure consistency of information provided, and was confirmed with questions from the survey itself. All data have been tested for statistical significance at the 95% confidence level.

Knowledge is power, the adage goes, but according to one study of women’s financial challenges and goals, it does not translate into confidence. Conducted by the Center for Talent Innovation (CTI), Harnessing the Power of the Purse: Female Investors and Opportunities for Global Growth found that while the financial literacy scores of women and men tested by CTI were virtually the same, women were 44% less likely than men to describe themselves as financially knowledgeable. 

To address the confidence gap, U.S. Trust organized three events in 2016 that focused on financial topics deemed important by U.S. Trust’s female clients: estate planning, investing and charitable giving. The sessions — limited to 20 female executives and business owners in the Los Angeles area — provided the attendees an opportunity to discuss their financial challenges and learn from each other’s experiences.

The sessions sparked real excitement not only about learning more about managing wealth, but also about learning from successful, like-minded women. The sessions were so well received, U.S. Trust may expand the program beyond the West Coast and to women who are not business owners or executives.

The sessions sparked
real excitement not only about learning more about managing wealth, but also about learning from successful
like-minded women.

What the women wanted to learn varied with their circumstances. Younger attendees tended to focus on their careers and building wealth, while older participants were more interested in transferring wealth to future generations and being able to manage their finances if their spouses became incapacitated. The consensus among the attendees was that while they did not need to be experts on any of the subjects discussed, they needed enough knowledge to have intelligent conversations with their financial advisors.

Unique financial challenges

The sessions were geared to female executives and business owners because working women carry financial burdens men typically don’t. A prime example: caring for an infirm spouse or parent, which can take women out of the workforce and increase their financial obligations. To the latter point, the 2014 U.S. Trust Insights on Wealth and Worth® survey of high- and ultra-high-net-worth individuals revealed that 65% of female executives surveyed had provided financial assistance to an adult family member, and 50% of them said providing that support had a negative impact on their finances.

The women at the events were well aware of the challenges presented by the societal expectation that women will care for aging parents or a failing spouse. Several noted that assuming the caretaker role deprives them of the time, focus and, in some cases, money necessary to secure their financial futures.

This raises an important point. When it comes to finances, women need to put themselves first because if they don’t take care of themselves, they won’t be able to take care of anyone else. It is very much analogous to the rule that in the event of an emergency, air travelers put on their oxygen masks first before attending to loved ones. 

Photo credit: Getty Images

IMPORTANT INFORMATION

Any information presented about tax considerations affecting client financial transactions or arrangements is not intended as tax advice and should not be relied upon for the purpose of avoiding any tax penalties. Neither U.S. Trust and its representatives nor its advisors provide tax, accounting or legal advice. Clients should review any planned financial transactions or arrangements that may have tax, accounting or legal implications with their personal professional advisors.

Always consult with your independent attorney, tax advisor, investment manager and insurance agent for final recommendations and before changing or implementing any financial, tax or estate planning strategy.

OTHER IMPORTANT INFORMATION

The 2014 U.S. Trust Insights on Wealth and Worth® survey is based on a nationwide survey of 680 high-net-worth and ultra-high net-worth adults with at least $3 million in investible assets, not including the value of their primary residence. Respondents were equally divided among those who have between $3 million and $5 million, $5 million and $10 million, and $10 million or more in investable assets. The survey was conducted online by the independent research firm Phoenix Marketing International in February and March of 2014. Asset information was self-reported by the respondent. Verification or respondent qualification occurred at the panel company, using algorithms in place to ensure consistency of information provided, and was confirmed with questions from the survey itself. All data have been tested for statistical significance at the 95% confidence level.