The financial industry continues to direct most of its advice to high net-worth male clients. But the world is changing and women are taking a much more active role in family finances. As the father of two grown daughters, I see the value in increasing their financial literacy. This issue was raised recently in an interesting article for financial advisors.
The blog points out how much the financial landscape is tilting in the direction of women who are increasingly becoming major influencers in financial decisions. Women are much more likely to be caregivers to their aging parents, requiring a solid overall knowledge of managing finances and investments. But perhaps the key insight in the piece is the fact that bulk of wealth transfer is going to women. And as the article says: “wealth transfer… is the single most important demographic trend around finance and investing in history.”
So how do we approach a conversation about finance with daughters any differently than anyone else? I believe the principles should be the same. And for Barbara and me that means getting to know the client and what makes them tick. It means making sure you talk in terms your client understands. You have to assess their knowledge level and help fill in the gaps, just as you would with any client, and then lay out strategies to map out their preferences.
These are simply good practices. But what’s most important in talking to our daughters is to keep the conversation going. Different ages and stages require different knowledge and judgement.
We actually enjoy some straight talk with our daughters about finance. It raises lots of issues and makes them confront the realities involved in managing their own finances. In other words, it helps build their independence. The questions will change, but the conversation will continue.
Do you need some tips on how to talk to your daughters about investments – how to bring them into your discussions? Barbara and I like to look at investments as a subject that includes the whole family. We have many multiple generation clients and would be eager to help you manage your family relationships, not just your money.
Thanks as always for reading,