There are over two million households in America headed by a single woman with an income more than $100,000 a year1. Whether they are divorced, widowed, or never married, one thing they need (besides a good night's sleep and more hours in the day) is a financial advisor who really understands them. Is that you? Are you someone who understands what they're faced with, what they're afraid of? Are you sensitive to the relentless pressures on them to be "everybody's everything" every day?
These women need someone who understands that managing the family finances on top of everything else can seem utterly overwhelming; someone who can guide their financial decisions so that at least money-wise, it's under control and everything's okay.
In recent weeks, I've talked with some sensitive and enlightened financial advisors who focus on single women. Let me share their advice to other advisors.
To start with, they tell me that single women, whether or not children are present, tend to need more "hand-holding" than married women or women in a committed relationship. One told me "single women want constant care and reassurance, even when it's just a quick phone call."
Like many clients these days, single women are extremely concerned that they'll outlive their savings and won't be able to maintain their lifestyles. When it comes to investing, they tend to be conservative and need clear explanations and gentle persuasion to make investments that might involve even a small degree of risk.
Of course, there are single women who aren't particularly concerned about outliving their money. They want someone to talk with about their investing, in addition to watching over their portfolios. Unlike many men, who think they can do it all on their own, single women are more likely to want to work with an advisor for continuous guidance and planning.
One advisor told me, "Balancing the role of breadwinner, mother, or caregiver is a tough, ongoing challenge, whether one is single or married. And while it's true that women are usually good at multi-tasking, it's also true that they're much more likely to need and ask for help and guidance."
Here are three quick, true stories from advisors working with single women:
"I work with an 80-year-old female client who never married, has no children, and is extremely cautious about investing. She doesn't trust the markets and is scared that she could, in her words, lose everything, regardless of the fact that she is only 20% invested in equities and 80% in fixed income and CD's. She doesn't care about planning because she has enough money to last her another 80 years and she doesn't spend much. What she really wants is someone to listen to her concerns, not to tell her what to do."
"I advise a 45-year-old, divorced woman with three children, who received a large settlement from her husband but doesn't pay any attention to her finances. She trusts that we will monitor her investments and doesn't worry about outliving her money (although we've suggested that she return to the workforce because at her rate of spending she won't be able to sustain her lifestyle indefinitely). She's too busy with her children to discuss her accounts; she just wants to know that her investments are made prudently. They are. And she's satisfied."
"One of my clients is 54 and has never married, has no children and is busy with her career so she doesn't need constant hand-holding. Her biggest fear is that she won't have enough money to fund her retirement. She wants to update her financial plan with tremendous frequency to be constantly reassured that she's on track with her savings. She's conservative but willing to trust our investment recommendations because she knows that we put her interests, not ours, first."
The bottom line is that single female investors do require some special handling, but in truth they most likely don't differ too much from your married clients. Just like you don't do one-size-fits-all planning for couples, you have to handle each single woman individually. Each has her own needs, desires, and risk profiles.
Most advisors agree that it's vital to start with a plan with single female clients, because it's the most foolproof way to lay the foundation on which to build her financial house. Agree to the plan, implement it, and then review it regularly (at a frequency rate and the amount of detail your client prefers), and her trust in you will build exponentially.
And speaking of building trust, look for tools you can use to do just that. One advisor recommended an interesting program for families called "Financially Fit," from Morgan Stanley. It is a game-like application that helps households with children acquire a love of working with — and talking about — money. "Financially Fit" has four separate programs that make financial concepts simple. The easiest program is designed for fourth graders and their moms to "play" together. The kids actually learn to make a budget.
Whether you use it or devise your own way to engage your single female clients (and their children), the idea is intriguing. Helping a single woman teach her kids about money and finances would strengthen your relationship with them as clients.
- Single women are an important segment of the investing public today, and respond well to more "hand-holding" than perhaps your couple clients. Take time to provide clear explanations and guidance on your recommendations.
- Be mindful that some are concerned about outliving their money given it's the only source of income for the family. Be sensitive and responsible in your recommendation s to help minimize their concerns.
- Not all single female clients have the same goals, so customize your recommendations based on their needs and expectations. It's always best to start with an agreed-upon financial plan and investing strategy and to make adjustments as needed.
1Current Population Survey, 2018, U.S. Census Bureau. https://www.census.gov/cps/data/cpstablecreator.html, sorting by "female-headed primary families, no spouse present," and "household income."(Most recent Data Available)
Morgan Stanley is not an affiliate or subsidiary of Hartford Funds.
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