Money on Venus: High Net Worth Women and Personal Finance

Empowering high net worth women with personal finance know-how- by Rachel Wong

The Fairer Sex

Being a woman certainly has its privileges and benefits, especially in this 21st century. Even as women today find more responsibilities heaped on their platter and have to juggle the roles of wife, mother, sister and employee of an organisation, it is interesting to note that they nevertheless can have it all and contribute to their family and society in more ways than they might have thought possible.

There was a time when women were not considered as belonging wholly to themselves; they were the property of others throughout their lives.  Their physical well being, security and bodily integrity were often outside of their own control. Nowadays, however, it is easy to see many empowered women with earning capability matching that of their male counterpart, sometimes even surpassing the latter’s. With the increasing numbers of high net worth women today, it has become essential to have a good platform to educate women on their personal financial plans.

Unique Outlook

It is not unusual these days to find women wearing many hats to meet the demands of career, family and a preferred lifestyle. Many a time these different responsibilities influence how the woman views her financial situation and her decision-making.

So, what are the factors that influence how women today make their investment and financial decisions? In an interview with Carol Yip, founder of Abacus for Money and author of Smart Money User and Money Rules, Yip says, “Women are generally more careful and do not take so much risk when it comes to investment or shares. When they look into an investment, they tend to look into the long term.”

She adds, “The types of women who fall into the category that knows how to invest are different. We have to look at the overall picture – there are women of lower income, middle income and higher income.”

High net worth women with big incomes are an educated group of investors for whom it is even more imperative to seek out the best resources of financial knowledge to make better informed decisions on their investment. In this day and age of global economic and political uncertainties, investing scenarios come with many challenges that would be folly to ignore.

Overcoming Hurdles

Almost 90% of all women become entirely responsible for their own financial welfare at some point in their lives, yet women lagged far behind men when it comes to financial planning and investing. The attitude of many women that someone will be there to take care of their financial needs keeps them from becoming involved in their own financial future, often until death, divorce, job loss, illness or other events thrust them into financial disaster.

Based on research conducted in 2011 by the Family Wealth Advisors Council – a network of the US-based, independent fee-only wealth management firms – there are hurdles that wealthy women need to overcome in terms of a wealth and finance perspective. The research looked at the trends that were worrying wealthy women:

Nearly 86% of working women consider obsolete careers and eroding earning power as threats to their financial success;

Married women believe health challenges present a greater risk to their financial security than the death of a spouse;

Almost 96% of women want their unique circumstances and their entire life picture understood by their financial adviser;

Nearly 80% of women (married or divorced) believe that they will be called on at some point to help one or more of their children in a crisis;

81% of retirees see a potential decline in the economy as a major risk as compared to 45% of full-time working women; and,

Nearly 57% of married women feel that divorce poses a significant risk to their financial well being.

“There are other related matters other than money that may affect high net worth women as challenges, for example, relationship, marriage, children and health,” Yip says. “However, there are many financial services that can help high net worth women structure their wealth and make sure that their wealth is being distributed evenly and managed properly.”

Beating the Odds

With these challenges inadvertently blocking the pathway to financial success, high net worth women must be savvy enough to seek out financial resources that can remove such “roadblocks” so as to achieve financial freedom.

“There is a target potential for women in products, but there is never a product that can cater to all needs of women. For high net worth women, they need to be intelligent enough to pick products that can grow and manage their money and bargain with products. There are also financial products that can create products based on high net worth women’s needs. There is even insurance that caters for kidnapping. So there is a need to educate high net worth women on personal financial planning,” Yip stresses.

Recognising that high net worth women have unique needs that would require a diverse financial portfolio, Abacus Advisory in association with Confexhub Sdn Bhd organised the inaugural Women and Money Asia Convention 2012 at a hotel in Kuala Lumpur on May 15-16, 2012 with the aim of addressing financial issues of relevance to women.

The convention, which invited regional and international industry experts and gurus to talk about wealth management and financial planning, targeted specific audience groups representative of different stages in a woman’s life. On top of being a high-powered conference, there were special invited guests and renowned speakers such as Tan Sri Rafidah Aziz to discuss current topics relating to investment and investment products and services during the panel discussion, dialogues and debate sessions organised into consecutive forums over the two days. Events like the conference go some way towards empowering women in their financial planning process by helping them hone their financial acumen to navigate the changing tides of today’s money landscape.