As women move into positions of more financial responsibility and become even more financially literate, there is a pressing need to address risk aversion. Often looked at as a detriment to the financial planning process for women, risk aversion should be seen as an asset to allow more educated and informed financial decisions. Although women have become increasingly more involved in the management of finances, there is still a high likelihood that women feel more risk-averse when making financial decisions compared to men. It will be key to use risk aversion as an asset to guide decisions, rather than an obstacle when building a financial strategy with a financial advisor.
Women should view risk aversion as a way to guide them as they make educated financial decisions. Rather than making rash financial decisions that often yield a higher amount of uncertainty, women have the opportunity to properly conduct research and gather as much data to help support their financial strategies. Working with a trusted advisor can help women in this process and give them the tools and resources they need to plan a long-term investment strategy that’s the right fit for them.
As younger generations of women move into positions of financial control, millennials offer a unique viewpoint on risk aversion as a whole. As many millennials entered the workforce following the 2008 recession, their increased awareness influences their attitude of risk in a unique way. It’s becoming more frequent that millennial women are aware of risks, yet use that knowledge and experience in their financial decision making. Risk aversion can allow these women to plan a long-term strategy from the start that is reliable and provides confidence in their wealth management experience.
A financial advisor that can understand, educate, and use their experience to help guide and support their female clients is key to collaborating on a financial strategy that they can feel confident in. An advisor should understand their needs and answer questions without fear of judgment. Strong lines of open communication between an advisor and female clients will ensure that every decision is made with all of the proper knowledge required to eliminate the feeling of ambiguity. It is becoming increasingly more important for women to know that advisors have experience with clients similar to them, rather than working exclusively with individuals that may have a different perception of risk.
Get in touch with Michelle Taylor with Gambin Financial Group if you’re interested in learning more about our experience supporting women in their financial strategies.
Securities and investment advisory services offered through qualified registered representatives of MML Investors Services, LLC. Member SIPC (www.SIPC.org). Gambin Financial Group is not a subsidiary or affiliate of MML Investors Services, LLC or its affiliated companies. Supervisory Office 5001 Louise Drive, Suite 300 Mechanicsburg, PA 17055, 717-791-3300.