Financial Planning for Women can Present Complex Challenges
by NCA Financial Planners on Jul 8, 2020
Financial planning for women can present complex challenges. How should the strategizing begin? With a relationship.
Crain's Sponsored Content Studio, with:
Mary Durra, CFP®, Vice President and Senior Financial Advisor
Jasmina Tadic CFP®, CDFA®, Senior Financial Advisor
Regardless of the client, the goal is usually the same for a financial advisor: To ensure their clients achieve a comfortable retirement while maintaining the ability to live and enjoy the present.
“For most of our clients, the ultimate goal is to retire comfortably, which can be difficult due to challenges such as raising a family, buying a house, putting kids through college and life-altering events like changing jobs,” says Jasmina Tadic, senior financial advisor for NCA Financial Planners in Mayfield Heights. “We define financial success as being able to continue your working lifestyle throughout retirement. We know it is difficult to enjoy retirement if you are unable to spend what you and your family have grown accustomed to.”
But talking to female clients typically presents a different set of circumstances — and potentially alternative ways to reach those goals. “Women live longer,” says Mary Durra, vice president and senior financial advisor for NCA. “They have more to plan for.”
“Women are typically caregivers: for children, parents, themselves and their husbands. Because of that, they often put financial planning further down on the to-do list than their male counterparts. But if you’re going to take care of everybody else, it is vital that you take care of yourself first.” As female financial advisors, Tadic and Durra can relate.
When should financial planning start? “Yesterday,” according to Durra.“A lot of women are afraid of the stock market,” Durra says. “And because of that, women may err on the side of caution, putting their money into the bank instead of a diversified retirement portfolio that includes stocks. It may seem like a cautious move, but it could have long-term adverse effects. Savings accounts most often do not keep pace with inflation. This can impair a retiree’s ability to continue their lifestyle throughout retirement. If you don’t do the proper financial planning, you might run out of money before you run out of time.”
“All things being equal, more men than women invest in the stock market, but the irony is that women who do invest typically outperform men,” Durra says. “They’re more willing to ride out market cycles.”
Tadic says that about half of her clients are married, and only 20% of those couples share financial decisions. The wife is the decision- maker about 30% of the time, with the husband making the decisions 50% of the time. This means women, much more often than men, may suddenly find themselves divorced or widowed and inexperienced in the area of personal finances. By working with an advisor, if you are married or single, you start to build that foundation of knowledge and open communication.
“Financial planning isn’t just about building a nest egg,” Tadic says. “It’s about building a relationship. We serve as a sounding board to many of our female clients who find themselves getting back into the workforce, buying a new house, and/or making sure their estate plan matches their wishes. Since women typically outlive their spouses, it’s important to discuss what will happen when she passes away.”
Typical conversations include: “How do you want to split your belongings among your children and family? Do you have charitable inclinations? Can you afford to gift while you’re living? What are your plans if you need care?” Tadic says.
“We align ourselves with client values, using a customized and goal-based approach. This approach is reliant on candid communication, that our clients really appreciate, resulting in a sound financial strategy that can weather all stock market environments,” she says.
BY VINCE GUERRIERI, CRAIN’S CONTENT STUDIO-CLEVELAND This advertising-supported section/feature is produced by Crain’s Content Studio-Cleveland, the marketing storytelling arm of Crain’s Cleveland Business. The Crain’s Cleveland Business newsroom is not involved in creating Crain’s Content Studio content.
NCA Financial Planners has helped clients retire for over 35 years. NCA Financial Planners, 6095 Parkland Blvd., Suite 210 Mayfield Heights, OH 44124, 440-473-1115; 440-473-0186 (fax); www.ncafinancial.com. Securities offered through Royal Alliance Associates, Inc. (RAA), Member FINRA/SIPC. RAA is separately owned and other entities and/or marketing names, products or services referenced here are independent of RAA. RAA does not provide tax or legal advice. Investment advisory services offered through NCA Financial Planners.