Affluent Women Cite Comfort with Investment Risks

While they are younger on average than the general population of affluent investors, high-income women do not lack financial expertise. A report released by Spectrem Group finds more than six in 10 high-income women feel they are fairly knowledgeable about financial products and investments, but most also feel they still have more to learn.

When it comes to selecting investments, high-income women report risk and diversification as the two most important factors they consider, with 93% considering the diversity of the investments and 86% considering the reputation of the companies where the investments are made. Additionally, a majority (54%) are willing to take a significant investment risk on a portion of their investments in order to potentially earn a higher return, compared to 32% of all other affluent investors.

The survey revealed that more than 93% of high-income women have a college degree, and 63% have an advanced degree beyond undergraduate work. Almost all (90%) credit education as one of the most significant contributing factors to their wealth creation. High-income women report the financial situation of their children or grandchildren as one of their most important personal concerns, and more in this group are focused on financing the education of their children compared with the overall affluent population (47% versus 25%, respectively).

Given their sophistication as investors, the Spectrem report encourages advisory firms to be prepared to provide the appropriate analysis and in-depth information needed when servicing high-income women. Their personal concerns drive many of their financial decisions, and many of these women are business owners, meaning a holistic financial approach combining business and personal goals can be appealing. Additionally, 43% of women say they enjoy investing and it is something they do not want to give up, while another 43% say they like to be actively involved in the day-to-day management of their investments. 

Opportunity presents itself for advisers specifically with estate planning, Spectrem finds. Less than 20% of high-income women own long-term care insurance, for example, which is well below the percentage for all affluent investors.

Other findings reveal that high-income women are more likely to use a financial adviser compared to all other affluent investors, with 81% using an adviser, compared to 74% of others. However, these women are more likely to be dissatisfied with their adviser. Research revealed the following statistics regarding high income women and their adviser relationships:

• When rating their adviser, 59% of high-income women report overall satisfaction; 67% report satisfaction with the adviser’s knowledge and expertise; 74% are satisfied with responsiveness to requests; and 60% say they are satisfied with performance.
• More than half (53%) say they rely and trust their adviser for the vast majority of financial needs. With certain types of investments, such as real estate or alternative investments, 51% rely on an adviser, compared to 33% of all other affluent investors.
• Over half (54%) want a same-day response to a telephone call, and 58% expect a same-day e-mail response from their adviser.
• High-income women are more frequent users of all social media platforms, with 70% using Facebook, 66% using LinkedIn, and 30% accessing Twitter.

The “High Income Women” report was compiled from an online survey of high income women conducted by Spectrem Group. For the study, high-income women are defined as those whose annual household income exceeds $200,000.