As has been widely documented, women are increasingly financial forces to be reckoned with. By some estimates, women currently control about a third of U.S. household wealth, or $10 trillion, but that figure could triple to $30 trillion by 2030 with the great wealth transfer playing a big role.
Clearly, advisors must acknowledge that significant capital flow as it relates to female clients and prospects and tailor services accordingly, but there’s more to the story. Women, particularly those in younger demographics, aren’t waiting around for inheritances. They’re actively charting their financial courses and they’re willing to invest in education and quality advice to reach their goals.
One of the big steps advisors can take towards improving connections with female clients and converting more female prospects to the client camp is understanding that women’s financial goals and tolerance for risk often differ materially from their male counterparts.
Indeed, establishing financial goals for women goes a long way toward improving confidence and empowerment and that leads to happier clients. Here are few financial goals for women advisors and clients can partner on right away.
Establish the ‘ATD’ Acronym
Taking some liberties here because “ATD” isn’t one of the scores readily acceptable financial acronyms, but in this case, it represents attendance, tracking and documentation – all of which can put women on solid paths to reaching their financial goals. The “A” is as it implies – attending meetings with your financial advisor or your family’s advisor. Documenting is also easily to implement.
“Clarify what matters most—family, travel, security—and set goals around these values,” notes Leila Evans, regional vice president at MAI Capital Management. “Consider both near-term objectives, like buying a home or funding education, and long-term goals, including retirement. Focus on goals that are meaningful and attainable; small-steady wins may lead to long-term success.”
Tracking expenses shouldn’t be interpreted in a negative light. It’s not that women are more profligate spenders than men. They’re not, but tracking expenses and cash flow is an integral part of helping women realize their financial goals.
“When you know how your money is being used each month, it’s easier to identify areas that don’t match your priorities and get ahead of lifestyle creep,” adds Evans. “By creating a budget -you can align your spending with your saving and investing plans to help meet short and long term goals. Budget wisely but remember that life is meant to be lived too.”
Focus on Preparedness and Retirement
Two more tentpole issues that can help women reach their financial goals include simply being prepared and focusing on retirement. To the former point, financial preparedness is realized in many ways, including establishing emergency savings, bolstering budgeting skills and planning for the unexpected.
As for retirement, it’s undoubtedly one of the top financial goals for women. It includes strategizing around Social Security claiming age and striving toward saving 15% of income for retirement, if possible.
“If there is a primary earner in your household or if only one spouse has a workplace plan, for example, it may make sense for much of the responsibility for retirement saving to fall to one spouse,” according to T. Rowe Price. “You may also be able to supplement workplace savings with individual retirement accounts and taxable accounts. Even though retirement accounts are individualized by nature, they should still be viewed as a shared financial objective.”
Bottom line: The top financial goals for women are within reach, particularly if they’re getting quality advice along the way.
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