New Research Reveals Women as Primary Financial Decision-Makers in Most Households
In recent years, women have emerged as significant financial contributors within their households, playing an increasingly influential role in decision-making. According to the CFP Board’s latest research report, Building Wealth: Insights on Women’s Aspirations & Growing Financial Power, a substantial number of women are actively shaping the landscape by taking charge of investment decisions, wealth management, and long-term financial planning.
Women Taking the Lead in Financial Decision-Making
One of the most striking findings from the CFP Board’s research is that more than two-thirds (69%) of women report being the primary decision-makers in their households when it comes toinvestment choices. This trend is especially noteworthy among married women, where 60% state that they are the main investment decision-makers in their households.
Women are not just overseeing household budgets but are also making critical choices regarding investment strategies, retirement planning, and wealth accumulation. As their roles expand, institutions and professionals must recognize the growing impact women have on financial markets and tailor their services accordingly.
The Role of Financial Planners in Supporting Women’s Financial Goals
More than half of women (56%) believe that professional planners are best suited to help them achieve their objectives, surpassing the perceived usefulness of online tools and other resources. This preference highlights the need for personalized financial guidance and strategic planning.
Liz Miller, CFP®, CFA®, Chair of the CFP Board of Directors, emphasized the importance of increasing female representation in the financial planning industry. “While the number of women CFP® professionals has grown by half in the last decade, we must continue to expand this representation to meet the needs of future clients,” Miller stated. Despite the growing influence of women indecision-making, only 24% of CFP® professionals are women. This statistic underscores the immense opportunity for more women to enter the field and serve the increasing demand for planning services tailored to women’s unique circumstances.
Women’s Growing Wealth and the Impact of the “Great Wealth Transfer”
It is widely recognized that women control a significant and increasing share of wealth in the United States. This trend is expected to continue due to a variety of factors, including the “Great Wealth Transfer” — the movement of wealth from older generations to younger ones, with women set to inherit a substantial portion of these assets. CFP Board’s research corroborates this shift, revealing that most partnered and employed women are the primary income earners or earn nearly as much as their spouses or partners.
Kevin R. Keller, CAE, CEO of the CFP Board, highlighted the importance of understanding women’saspirations and challenges. “Understanding women’s goals, challenges, and financial planning interests enables CFP® professionals to provide tailored advice,” Keller noted. “A trusting relationship with a personalized perspective is the foundation of ethical, competent planning.”
Key Financial Priorities for Women
Women’s financial priorities are largely centered around security, longevity, and caregiving responsibilities. The top three financial concerns among women include:
- Ensuring a Comfortable Retirement
- A significant 83% of women prioritize living comfortably in retirement and not outliving their financial resources. With increased life expectancy, women are more likely to experience longer retirements than men, making long-term financial planning essential.
- Building Emergency Savings
- Nearly 68% of women emphasize the importance of having a sufficient emergency fund. Given their often higher caregiving responsibilities and potential career interruptions, emergency savings play a crucial role in ensuring tability.
- Providing Caregiving for Loved Ones
- Many women prioritize caregiving, whether for children, aging parents, or other family members. This responsibility can significantly impact their decisions, from choosing flexible work arrangements to allocating funds for healthcare and long-term care services.
Unique Financial Challenges Faced by Women
Women often face unique challenges compared to men, including longer life expectancies, wage gaps, and career interruptions due to caregiving responsibilities. As a result, planners must take these factors into account when crafting personalized financial strategies.
1. Retirement Savings and Longevity Risk
Since women generally live longer than men, they are more likely to outlive their retirement savings. This makes strategic retirement planning crucial, including investments in annuities, Social Security optimization, and sustainable withdrawal strategies.
2. Career Interruptions and the Gender Pay Gap
Many women experience career interruptions due to caregiving, which can reduce their lifetime earnings and retirement savings.planners should help women navigate these challenges by exploring flexible investment options, catch-up contributions for retirement accounts, and income diversification strategies.
3. Higher Healthcare Costs
Women often incur higher healthcare costs in retirement, including expenses related to long-term care. Planning for these costs through health savings accounts (HSAs), long-term care insurance, and other tools is essential.
4. Estate Planning and Wealth Transfer
With the “Great Wealth Transfer” on the horizon, women are set to inherit and manage a significant portion of assets. Estate planning, philanthropic giving, and tax-efficient wealth transfer strategies should be integral to their plans.
How Financial Planners Can Best Serve Women
Given these unique financial concerns,planners must tailor their services to meet the specific needs of women. The CFP Board’s research highlights several factors that women consider essential when selecting a financial planner:
- Empathy and Personalized Solutions
- Women valueplanners who take the time to understand their unique challenges and craft tailored solutions rather than offering generic financial advice.
- A Proven Track Record of Success
- Trust is a crucial factor for women when selecting a planner. They seek professionals with a strong reputation, positive client testimonials, and a history of helping clients achieve financial security.
- Clear and Simple Communication
- Many women prefer planners who can explain complex concepts in an easy-to-understand manner, making financial planning more accessible and empowering.
- Professional Certifications and Credibility
- Certifications, such as CFP® certification, play a significant role in building trust and credibility. Women are more likely to work with planners who hold recognized industry credentials.
The Path Forward: Encouraging More Women in Financial Planning
With only 24% of CFP® professionals being women, there is a tremendous opportunity to increase female representation in the planning industry. Encouraging more women to pursue careers in financial services can create a more inclusive and diverse profession that better serves the needs of female clients.
Industry leaders and firms must actively support mentorship programs, professional development initiatives, and flexible career pathways to attract and retain more women in planning roles.
