Women Investors Less Financially Prepared than Men

Women are less financially prepared than men, according to the fifth annual Advisor Authority study commissioned by Nationwide Advisory Solutions and conducted online by The Harris Poll. While women more commonly have an optimistic financial outlook for 2019 (56% versus 53%), they are less likely to be optimistic than men about the U.S. stock market this year (36% versus 50%) and the U.S. economy (35% versus 48%).

“There is a disconnect between a woman’s degree of concern and her level of preparation—regardless of her access to an adviser—and the tension is clearly highlighted in Nationwide Advisory Solutions’ Advisor Authority study,” says Kristi Rodriguez, leader of the Nationwide Retirement Institute. “It’s clear that women are highly attuned to the uncertainty in the market and the economy, and that they need more help to protect against these potential risks.”

Women are also more concerned than men about a bear market (57% versus 51%) and a recession in the next 12 months (60% versus 57%). Sixty-six percent of women think that market volatility will increase in the next 12 months. However, women and men agree that protecting assets is among their top financial concerns. At the same time, women are far less likely than men to have a strategy to protect their assets against market risk (56% versus 71%).

According to the survey, women are more likely to say that outliving assets is a top financial concern but are less likely to have a plan to help protect against this happening (62% versus 76%). Women are more likely than men to say they will rely on Social Security (78% versus 66%) to protect themselves against outliving their savings. They are also less likely to say they would turn to deferred income annuities (6% versus 18%), qualified longevity annuity contracts (5% versus 14%) or single premium immediate annuities (10% versus 14%).

Whereas 44% of women were working with a financial adviser in 2016, this has risen to 58% this year. However, in 2019, 64% of men are working with a financial adviser.

The findings are based on a survey of 1,021 financial advisers and 824 investors conducted this past February and March.

Nationwide’s findings echo those of a recent survey on women’s and men’s views on financial matters that LIMRA-SRI issued this past spring. Thirty-one percent of women in that survey fear they will outlive their assets, 35% expect to face significant health care costs in retirement, and 31% think they will incur long-term care costs. By comparison, the figures for men, respectively, are 25%, 27% and 28%.

Similarly, Lincoln Financial’s Love and Responsibility Survey found that 90% of women are planning for their retirement, and 84% are planning for their family’s future, but more than seven out of 10 say they are not doing a very good job with either. Seventy percent are worried they will run out of money in retirement, and among them, only 20% have a plan to mitigate this fear. Asked what is keeping them from saving for the future, 58% say current expenses, 44% say lack of time for financial planning, 52% say feeling less educated about retirement planning than men, and 44% say feeling less educated about personal financial planning.